Forex trading or FX, Foreign Exchange Market is a global over-the-counter (OTC) trading market, and it is the biggest trading market in the world. With a daily trading volume to about $5 trillion. So comparing that to the crypto market which completely dwarfs both the stock market, which average about $200 billion per day, and the cryptocurrency daily trading volume which is in the lower billions, but the latter have reports of about 85% of that volume being fake.
So if you are looking for volume and trading options the Forex (FX) market is definitely worth your attention. It is today full of retail and institutional investors plying their trades, trying to make their fortunes on the market. And if you are an experienced crypto trader you can apply many of your honed in trading skills from the crypto trading markets directly to the Forex trading markets.
Popular Forex & Crypto Trading Platforms
The main reasons for entering the Forex market are
Trading volume & liqudity
As the biggest trading market in the world it has the biggest trading opportunities for new and experienced traders. With estimated trading volume of about $5 trillion per day it has several times higher volume than both stocks and cryptocurrencies combined. The most popular trading market pairs in the Forex market are: EUR/USD, USD/JPY, GBP/USD and AUD/USD.
The high trading volume brings many great benefits to traders, such as strong liquidity in the trading books, so it’s easy to get your orders much quicker executed. Making it much easier to enter and exit the market on your own terms. But you can also apply your own preferred trading methods, where both daily trading and swing trading is possible. What you need to be aware of are the different opening and closing times for the different markets. Where the UDS market is open from early in the morning around 08.00 – 09.00 am to evenings of 18.00 – 19.00 pm U.S time. Same with the GBP, EUR for European time, and AUD, JPY in their own daily time zones.
But if you can trade one market pair you can easily apply your own trading strategies and methods to another trading pair, so essentially there is always a market open for you.
24 / 7 markets
As an over-the-counter (OTC) market you can use any of the numerous online trading platforms and enter at your convenience. If you know how to trade one pair you can trade another. With the huge trading volume and liquidity and numerous of available trading pairs, it means that market never sleeps. There is always an active trading pair ready for you to go long on or short. It is a global market, with traders from around the world. All with different experience and you need to better them to be successful.
Practice with a demo account
The Forex trading works the same at pretty much every trading platform, the only difference is the look and feel and the fees that might differ. So try a few different ones until you find the one you really like to stay with in the long term. What’s great about most Forex trading platforms is you can create an account and play around with demo money. That means you can follow the real market, use your strategies and methods to try and see if you can make successful trades.
We recommend that you start out like this if you haven’t had any experienced trading before. If not only get you comfortable using the platform’s interface and features, but also to make sure you understand how the Forex trading market works.
Important tips to be a successful Forex trader
1 ) Keep your emotions out from it
Be smart about your money and be patient. That means controlling your emotions and controlling every single trade you make. It’s about meticulously applying your strategies and tactics and continously trying to improve on every single trade. And you can only do so if you control your emotions.
2 ) Risk management
Don’t use more money than you are able to lose on any trade. Every successful trader does the risk management perfectly. That means that for every trade they make they only trade with a percentage of their trading portfolio. Usually it’s recommended to maximum trade with 5% of the value of your entire trading portfolio. So if you wanted to trade with $1000, then you max trade with $50 dollars per trade. You don’t want to end up losing 50% of your trading portfolio in one trade gone wrong do you?
And of course a trading portfolio is different to your savings or rent money, that is a given. Never spend more than you are willing to lose. So with trading on the Forex market you need to enter with a sum that is big enough to handle at least 5-10 potential losses before you run out of your trading money. Depending on the platforms you use that sum varies.
And when you get more experienced trading with Forex, then you can start using leverage and trade with much higher sums for greater rewards.
3 ) Use stop losses and profit targets
Don’t be one of those traders that talks about all the money they almost made. Or don’t be that trader that lost everything after one big bad trade they made. So in order to avoid both scenarios you set stop losses. Meaning that you exit the trade after the price goes towards the opposite direction you traded on (short or long). So cut your losses in the right time will save you from losing a lot of money.
And the same goes for putting in your profit targets for when you exit on a successful trade. Lets say you want to go long on USD/EUR and your trade seems to go your way initially and then after a few hours the market sentiment changes completely and from going up several points it now drops. And you end up not only not making any profits, but you might actually risk losing money on that trade. So set your profit targets for when you want to exit that trade. Remember it’s better to take some profits than risk losing money.