What do you need to know before investing in the Forex Market?
At this point, you must have been bombarded by many people around you who are trying to persuade you to invest in foreign exchange or teach you trading skills.
Forex trading refers to buying and selling currency pairs to generate profits. The objective is simple: to profit by trading in the constant volatility of the main currency pairs, yes, this is a totally legal way to make money. However, as long as someone can make money, they will lose part. They exist like any other investment risks.
If you want to be part of this global market, you must understand the following points before you start.
1- Basics of learning
You can trade without knowledge of foreign exchange, but it is not recommended to do so, because you will soon suffer big losses. It can be said that opening a demo account is the best way to control all aspects of foreign exchange transactions, because you are free to try and adopt new strategies without worrying about financial frustration. You can also watch video tutorials, participate in webinars and read blogs and articles about basic and advanced information.
2- Choosing the best Forex broker
A forex broker can effectively act as an intermediary between you and the foreign exchange market, so it is essential that the broker chosen is not only reliable and regulated, but also suitable to help you achieve your goals financial resources. Legitimate traders provide a secure trading platform that can be accessed with major counterparties and provide other tools and charts to support your decision making. Note that there are some scam brokers who try to trick innocent victims through various scams, such as Ponzi schemes and subscription vendor schemes.
3- The exchange rate is affected by external events
Several factors affect the exchange rate. In order to be able to successfully predict price trends, traders pay close attention to macroeconomic and political developments, such as central bank announcements, economic data releases such as GDP, trade rate, inflation rate, unemployment rate and manufacturing index. Political turmoil can also cause fluctuations in foreign exchange prices. The economic calendar can be a great way to keep up with the latest and most accurate global financial news.
4- Prepare for loss. This is normal
It takes a while to adapt to market trends and graphic patterns. Sometimes, you may experience some losses initially. In fact, even the best foreign exchange traders face losses from time to time. This is an integral part of the business journey. The secret is not to allow the loss to stop you. Use them to learn and improve your trading strategy.
5 – Practice, on a demo account
As mentioned earlier, opening a demo account allows you to practice trading freely, so that you understand better when to trade at the right time. This is also an excellent opportunity to try out new strategies and tactics. You should continue to practice for at least a few weeks, or until you can earn real money.
While foreign exchange transactions can be an important source of revenue, you should beware of scammers. Currency scams often offer “investment opportunities that are too good to be carried out” to convince you to give up money. When you have no business experience, crooks will try to take advantage of your optimism, fear and lack of knowledge.
And be smart with forex (FX) scams that are common on social media platforms like Facebook and guarantee extremely high returns on currency investments. Pay attention to the following warning signs:
1- Very promising:
Like all investments, foreign exchange transactions also present risks. If the possibility of making personal funds available to manage your money is minimized, or if you want a generous return, it should sound an alert. Likewise, if something looks too good to be accomplished, it is likely to be.
2 – No website history: See our history in the price menu
Always ask for the history of statistics verified in active trading accounts so that you can evaluate your skills yourself. If they refuse or offer to view the demo account statistics, they must be careful.
3- Pressure to save money
Any legitimate foreign exchange broker wants you to invest with them with complete confidence before transferring any funds. Therefore, they will never put pressure on you during their first conversation, nor will they try to tell you to act quickly on a limited time offer. If someone does, you should end your interaction immediately because they are more likely to be trying to convince you to participate in the fraud.
4- Escape – Be careful
Those who have nothing to hide have no reason to avoid, so keep paying attention if the person you are talking to answers your questions in advance, or is trying to divert your attention, talk about you or even argue .