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What is Forex Trading?
If you have travelled abroad on holiday or a business trip you may have needed to buy some foreign currency to use at your destination. More than likely you will have used your home currency to buy currency for your destination country. Foreign Currency exchange or Forex trading as it is more commonly known is based on this buying and selling of currency pairs, the currency pair being the two currencies that you wish to exchange. Through the buying and selling of currencies at opportune moments it is possible to make a profit. Fundamentally Forex trading is quite easy to understand but that does not mean it’s easy to do profitably.
If you want to start Forex trading the first step would be to find a reputable broker. This article lists the top 25 Forex brokers in the UK ranked by their trust score.
Is Forex Trading Hard?
The majority of Forex traders are not making a profit and this is because of a number of reasons including; a lack of understanding of the complexities of international currency markets, a reluctance to exit a bad trade in the hope that it turns around, poor risk assessment and management, allowing greed to take over and emotionally driven trading. If you are to avoid becoming another failed Forex trader, I recommend the following steps:
*Start trading with a practice account before using any real money.
*Keep a record of all yout trades as you build up your experience.
*Understand the importance of setting up stop loss orders and apply them to your trading procedures.
*When you start, pick currency pairs that are familiar to you.
Create a daily routine that is conducive to good trading practices, sleep, exercise and nutritious food are likely to lead to better trading decisions.
In answer to the question in this post’s title, Forex trading is not hard to do but it is hard to do well. Beware of ‘Fake Gurus’ oversimplifying Forex or offering you a foolproof trading system because it is likely that they are only being successful by selling their ‘system’ rather actual trading success in currency markets.
Next Steps
Are you interested in Trading Forex ? Have you started already? Let me know in the comments section below. Also, get in touch if you would like my help. My email address is mike@learnmoney.io
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My aim with each blog post is to help you move to a better financial future. I believe that there is not enough financial education in the national curriculum and I intend to share anything helpful that I have learned along the way. I am by no means a financial expert. None of the information on this website constitutes financial advice and is provided as general information only. This is my personal finance blog; my marketing blog is over here and I have been blogging there since 2010. I hope you have found this information useful. Thank you for reading.
Best regards,
Mike
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