How Do I Start Trading Forex?

What even is it?

Forex Trading is a business of Buying and Selling of Currencies and Commodities. Foreign Exchange rates of Currencies and Commodities are determined by forex market. It includes all aspects of trading currencies at current or determined prices. This market works through financial institutes like Banks and Financial brokers.

In this article, I will cover the basic framework of the forex market that helps you to become a successful forex day trader with little money. I will also point out the best trading practices for professional day traders.

Different Trading Sessions

Forex Market works almost 22 hours a day from Monday to Friday, and cover the following trading sessions.

Sydney, Australian session

Tokyo, Asian session

London, European session

New York, USA session

None of these types of trading are limited to buying. With certain types of instruments, the trader can also short (or short-sell) the stock. This means that profits can be made in both rising and falling markets.

When choosing a trading type to suit your needs, here are some questions to ask:

    • Am I short-term- or long-term-orientated?

    • How much time do I have during the day to trade?

    • Do I work full-time?

    • Am I patient, or do I need to see results quickly?

The Major movement of the Forex Market starts in the European session and the peak time of the market is a joint session of the U.S.A and Europe. As a beginner Day trader, you must have a knowledge of these sessions.

Tradeable Lot Size for Day Traders with Little Money.

As a beginner Day trader, you open your real trading account with a reputed broker. But you do not know the accurate correlation of your account equity and your trading lot size. I will show you the formulation and if you follow this I assure you will never lose your investment.

If you follow the below mention formulation you will earn a 20% to 30% annual return on your investment without tacking a high level of risk.

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What do I need to learn first?

Understand Market volatility.

For a successful Day trader, understanding of the daily market movement of currencies and commodities is very important. If you correctly estimate the volatility of the market your entry and exit points will be accurate and your profit ratio also increases. The movement of currency pairs on daily basis is around 100 to 150 pips and commodities move around 200 pips on average.

Fundamental analysis

Fundamental analysis is one of the main ways of looking at the forex market by analyzing political, economic, and social events that may affect the currency pairs. These analyses make you a better trader and increase your profit forex market. Market volatility is dependent on major international or local political and economic events. For the checking of fundamental data, you have to follow the economic calendar of any website.

Technical analysis

Technical analysis is the study of historical price movement in order to identify the past patterns and predictions of future movement in the forex market. These analyses are very helpful for a Day trading to understand the trends of the forex market. Forex traders also gets an idea of support and resistance by using technical analyses and set their entry and exit points. For better decision making I recommend you must follow three technical indicators, like (Bollinger Band, RSI, Moving Average) instead of relying on any single one.

The combination of different technical indicators of different time periods (H1, H4, D1) will provide the help you as a beginner day trader with a little investment on making trading decisions.

Automating Trading (Get a Head-start) - Advantages and Process

The present day witnesses a technological boom which determines many changes at all the levels of human knowledge and being. Trading has not been left untouched. Everybody trades in one way or another. It has become a must for survival. You can cope with modern world only if you are open-minded, efficient and hard-working.

What do I have to do?

  • First before finding signals, research and learn everything you need to know to understand what your putting your money into. Make sure you have an idea of how to draw on a graph and make a bullish (up) or bearish (down) prediction. See more here.

  • To get these signals it is vital for you to have the right system, that particular software which was conceived for the purpose of Forex trading. You can find many systems on the Internet, but we have found one that has worked amazingly:

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These automatically generated signals can provide you with the so long wished for opportunity to hit the currency market. You can get them from any kind of media, be it television, newspapers, internet forums. However, there is a risk that the signals you get are sometimes distorted. To avoid it, you must be able to choose balanced unprejudiced automatic signals.

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