Foreign Exchange Trading or Forex trading involves the systematic buying and selling of foreign currencies for profit making purpose. Forex trading used to be the exclusive reserve of the rich and financial institutions, but today with the advent of the internet and easy account funding services like e currencies and credit/debit cards, ordinary people with as little as $100 or even $1, are now making money trading forex online. The forex market is the largest financial market in the world worth over $4 trillion daily.
The number of Nigerians interested in making money online is growing by the day. Many of our youths (between the ages of 21 to 35 years) are willing to learn one or two online skills that can be used to make legit money online in Nigeria. In 2019, trading of foreign exchange (Forex) is one of the simplest ways to some quick cash online and this is due to the fact that anyone with a smartphone or laptop connected to the internet and little basic about currency trading and exchanges can become a Forex trader and start to make money online.
To trade forex online, you need a computer and internet access with reasonable speed. You also need the services of an online forex broker. Some forex brokers provide you with a software application to enable you trade forex online. With other forex brokers, you simply trade forex online at their website. You setup a forex trading account with a forex broker and fund it with supported e-payment methods. Payment methods and e-currencies accepted by online forex brokers include e-gold, c-gold, Wire Transfer, e-Bullion, PayPal, Liberty Reserve, Web Money, etc. Before choosing any online forex broker make sure they support payment methods you can use.
Step One: Learn About Forex Market and Terms:
Trading is a journey that can last a lifetime. Hence it is important to be equipped with the right knowledge of trading before venturing into it. There are several steps you should take before you start transacting in the forex market. You need to first learn about the financial market and basic keywords and terminologies used by Forex traders.
Forex is one of the largest trading markets, with a global daily turnover estimated to exceed US$5 trillion. Trading is conducted over the ‘inter-bank market’, an online channel through which currencies are traded 24 hours a day, five days a week. All transactions made on the forex market involve the simultaneous purchasing and selling of two currencies.
Step Two: Find A Good and Reliable Forex Broker:
If you’re just starting out as a Forex trader or even casually considering the idea of Forex trading, signing up with a reputable broker can be extremely helpful but choosing which forex broker to trade with can be a very overwhelming task especially if you don’t know what you should be looking for.
The forex market is so competitive that just thinking about having to sift through all the available brokers can give you a major headache. To get started, look around for Forex broker reviews on the internet most especially online broker services that operate in Nigeria. Make sure you conduct enough due diligence before deciding which broker offers values and services that best meet your needs.
Step Three: Start Trading With A Demo Account:
These days, a demo account is being offered by almost every forex broker. Demo accounts are virtual accounts with virtual money which is connected to a real trading platform, receiving real data on the market. That means you can open and close trades without a single penny.
A forex trading demo account is a trading account with monopoly money in it that is connected to the live market. Trades can be placed in real time and represent what would be true losses and gains if the money were real. Before you put any money on the line with trading, you will need some practice. A demo account will give you the ability to practice trading without the pressure.
Step Four: Learn To Analyze Currency Trends:
To be able to make the right prediction about currency trends, you need to be able to analyze current trends and movements in the Forex Market. Forex traders generally focus on two main types of analysis that which include fundamental and technical analysis. Fundamental analysis involves the study of macro events that will alter the course of a currency pair. Technical analysis is the study of price action, including looking at momentum, trends and reversal patterns.
Currencies are always traded in pairs, such as GBP/USD or USD/JPY. The reason they are quoted in pairs is that, in every foreign exchange transaction, you are simultaneously buying one currency and selling another. Remember, if you are able to trade one currency pair – you will be able to trade all of them. If you will be trying to trade all currencies at once, you will slow down your success process.
Step Five: Start trading with Real Money:
After perfecting the initial 4 steps highlighted above, its time to start trading with real money. While the idea of ‘buying low’ and ‘selling high’ might sound simple enough; in actuality, profitable trading is considerably more difficult than just buying when price moves down, or selling when price moves higher.
Many of the best currency traders have taken a highly technical approach in their trading strategies. Even if you don’t consider yourself a technical trader it would be foolish to ignore what the charts are saying before making a trade. Many brokers offer traders access to charting tools that gives historical price patterns indicating whether to buy or sell.
Forex trading can be learnt by following the steps mentioned above. But always learn to be patient before you start trading with real money amounts. Only when you have carried out enough free trades and you have developed a successful trading Forex trading strategy, you should consider trading with real money.
Also, remember that emotions are not good in the Forex trading world. Sell or buy at or near your price target you set in your head. Don’t let your emotions convince you that the stock is going to go a lot higher than reality. When you become greedy and don’t take your profits you’ll see them get swept up in the pullback and kick yourself for not sticking to your initial plan