Mastering the Basics of Forex Trading

There aren’t too many modern investment vehicles as exciting as the world of Forex.

Constantly changing, ever evolving, and open 24/7 every single day of the year, Forex trading is a roller coaster ride that can be incredibly profitable – so long as you have the basics and fundamentals down before you jump right in.

Throughout the rest of this quick Forex trading guide we shine a light on all the things you need to know before you get started.

Master these core details and you’ll find Forex profitability a lot less elusive than most beginners, cranking out smart trades and making intelligent moves in the Forex market that help you build real wealth.

Shall we get started?

Let’s get to it!

Better Navigating the Forex Market

The first thing you need to do is fully familiarize yourself with the basics of the Forex market itself.

You’ll want to better understand how different currencies around the world are treated against one another, how you can take advantage of shortselling and Forex spreads to boost your profitability, and how to spot the right kind of signals that tell you different types of trades are most likely to succeed in real time.

Understanding the lay of the land, so to speak, is the most important piece of the puzzle behind Forex trading success.

If you don’t understand the composition of the market, how these trades are handled, or how basic moves are made your never going to be able to master the more involved strategies and tactics in Forex that can really start to add mounds of money to your bank account.

Getting Comfortable with Forex Fundamental Analysis

The next thing you’re going to want to do when learning the fundamentals of Forex trading is get comfortable with fundamental analysis.

This means learning how to read Forex economic calendars so you can more accurately track news and upcoming events, how to understand the impact GDP has on Forex currencies all over the world, the CPI (Consumer Price Index) and its impact, using PPI and ISM data to help make smarter moves, and so much more.

All of this goes well beyond learning a handful of signals, being able to read candle charts, and fooling around in the market with paper money accounts.

Not only do you to be able to find this information (most of it available from high quality trading platforms), but you also have to know how to make the most of that information as well. Fundamental analysis – and, later, technical analysis – are big pieces of the success puzzle as well.

Trading with Discipline

The last thing you need to master when you’re getting serious about Forex trading mastering yourself, your emotions, and your decision-making process.

Year after year the most successful Forex traders are always the ones that are able to trade with extreme discipline.

This means understanding your own psychology, recognizing when the fear of missing out is pushing you to make moves you wouldn’t have made otherwise, any how to take control of your decisions in a way that forces you to use logic and reason rather than just cave on emotional swings or “gut feelings”.

Work on all of these elements and you’ll be able to get down the basics of Forex trading a lot faster than most of your competition.

Trading Stocks Vs. Trading Currency

Trading stocks and currency are very different. Some people prefer to trade on the stock market, and others prefer to trade on the Forex Market. Which one is better? Well, consider these following points, and then make the decision for yourself:


The amount of leverage allowed on the two markets is quite different. When trading on the stock market, you can trade with leverage, but it will be very small, such as 2:1, and you have to qualify for it. When trading on the Forex Market, all you need to trade with leverage is to be able to open an account. If you can open a bank account, you can open a Forex account, so it is much easier. Also, you can leverage much higher in the Forex Market. In the US, you can’t leverage higher than 50:1, but in other places throughout the world, you can leverage 100:1 or more.

What You Need To Consider

Doing stock market analysis is important, and requires a lot of research about the companies you wish to invest in, but once you make a decision, you only need to worry about whether the company is going to continue along the path they are on, and hope they become more valuable. Forex analysis is also important, and can be more complicated. When trading currency, you have to consider the GDP and the economy of the country whose currency you are considering. You have to see what the political climate is, and if there are other circumstances on the horizon that might affect the currency. The Forex market can change much faster than the stock market.

Amount of Freedom

There are Forex brokers and stock brokers. You can consult a Stock EA and a Forex EA. You can use different stock programs and Forex programs, such as Stock Trade Copier and Forex Trade Copier. You can look at stock market trends and Forex signals. Even with all of this knowledge, you are still not guaranteed a win or a loss. Both of these trading options leave the trades up to the trader, but this is where the freedom aspects change. The stock market is not open as often as the Forex Markets. There is a lot more regulation in the stock market than in the Forex Market. The Forex Market is more volatile, but the stock market has more rules. Ultimately, the choice is yours.

Top Three Trading Secrets To Know Before Starting in Forex

Getting started in the Forex Market can sound wonderful and exciting at first, but as soon as the research begins, there are many people that get confused about what they are reading, what they are seeing, and how it works. Before getting started, a trader has to have a good grasp on the basics. Once an understanding of what Forex is and how it works is there, the trader is ready to look into how to do the trading itself. Here are the three most important topics to learn before getting a Forex broker and trading in the live Market.

Learn the Vocabulary

Before getting started in Forex, you have to know what everyone is talking about. If you are not sure what pips are, or what shorting is, you are not ready to get started. If you think a Forex EA is a person sitting on the other end of a phone, ready to give you some advice, you are not quite ready to get started. Getting to know the language of the business is extremely important. There are websites out there that have lists of words in alphabetical order that are worth looking at.

Know How to Obtain Useful Analysis

You don’t want to just jump into the currency trade. You want to do a complete Forex Analysis before developing your plan. If you are not sure how to obtain that information, or what information to get, you are not ready to trade in Forex. You want to find places that help you learn the economic, political, and social occurrences that are going on in the world, and which ones people suspect will affect the market. Getting Forex news is important to making good decisions. You might even be able to get advice on what Forex broker to use before you start with your actual trading.

Technical Analysis

You want to be able to read the charts and graphs that give the fluctuations and trading information. There are Forex signals to look at, charts to analyze, and graphs to use to help determine trends that might be of use.

Once you are able to grasp the basic understanding of these tools, you are well on your way to being a successful trader. It takes a lot of time and research before a person can enter into the Forex market fully prepared, but it is time worth taking.