Forex trading is becoming an increasingly popular way to earn some extra money, but there are some things you should know about it before you make your first move. Here’s a step-by-step guide that should help you get started in investing in forex and stocks!
Learn the basics of forex trading
If you don’t know the basic terminology, you’ll have a hard time doing anything on the forex market. Some of the most important concepts include base and quote currency, exchange rate, long and short position, bid and ask price, and spread. Once you’re familiar with all of them, try reading a forex quote – it should help you see what it’d be like to trade on this market!
Choose a currency you’ll be trading
Based on what you’ve learned about forex trading, try to make predictions for a couple of currencies. Weakening of a country’s economy usually leads in weakening of the currency as well. If you believe you’ve found a currency that will only get stronger, consider choosing it for your trading venture. It might make you a profit in the months to come!
Register for a forex brokerage account
Once you’ve done all that, you’ll need to find the right brokerage for yourself. While researching different agencies, make sure to check how long they’ve been in the business. Try to find one that’s been active for at least ten years. Also, it would be best to decide on one that’s being overseen by a major government body, such as the NFA!
Analyze the forex market
Once you’ve activated your account, make all the necessary trading preparations by analyzing the market. There are three methods you can use for this specific purpose – technical, fundamental and sentiment analysis. They all have their advantages, so make sure to read up on them so you can make the right decision for yourself! One of the greatest option to invest in is during IPOs: as a good example we can take into consideration the recent Pirelli IPO, which has been defined as “the IPO of the year”. Basically, during an IPO, usually stock prices tend to increase, what likely will happen to Pirelli stocks during the IPO. Same happened during Facebook IPO and during Snapchat IPO.
Place an order
Now that all the preparation steps have been completed, you can finally start trading your currency. This is done by placing an order, but here you have three options as well – market, limit and stop orders. Take your pick, place your order and good luck!