The foreign exchange (Forex) market is trending as the best way to get into trading. After all, it’s accessible to everyone anywhere in the world, 24 hours a day. You don’t need much money to get started, and the basics are relatively easy. The Forex market fluctuates based on world events, as much as economic events, and as long as you’re perceptive, you have the potential to make some really good trades.
Unfortunately, for many people this means going in completely blind. Unlike any other field, beginners believe they need to learn nothing about the Forex market before they start trading. But, it’s not difficult to find an online Forex trading academy, and there are many reasons to make use of them before starting trading.
These are 3 of the most pertinent.
1. It’s quick and free
While this isn’t exactly a reason to do anything, it does make it unforgivable to skip this step of your Forex career. The allure of Forex is that it’s available to beginners, and anyone can become an expert. Now, if Forex trading academies cost money and took years to get through, there’d be good reason to give it a miss. However, getting a Forex education will not take you long, and most brokers offer it completely free. So, if you go in blind and you lose everything fast, that’s on you.
The best part is that not only can you learn the theoretical part, but also practice the acquired skill risk free. This can be done by opening a forex demo account which most of the brokers provide for free to new clients. This way you can familiarize yourself with the trading platform, test trading strategies and benchmark your trading performance without risking your capital.
2. It’s not all about intuition
We like to think that good trading decisions come down to intuition. If you have a good grasp on the political world and tend to see what’s coming before others do, you’ll make money in the Forex market, right?
Not quite. It’s easy to look from the outside and assign cause-and-effect rationale to movements in currency pairings. But, firstly, correlation does not imply causation. Often, there are far more factors at play, and only seeing the “biggest” mover will cause you to make decisions that are simplistic and naive.
Secondly, trading Forex relies on a lot of subtlety. It’s a market that fluctuates all the time, but in small increments. Simply having a good grasp on the major factors that affect a currency is not enough. You need to know how micro factors impact pairings, and how to take advantage of the smallest, subtlest movements.
3. Trading psychology is crucial
Many very perceptive and intelligent traders end up losing it all. And for one simple reason. They make decisions based on emotion without realising it. We all like to think that our decisions are perfectly rational, based only on the facts. But trading psychology, which is a major part of a good Forex trading education, exposes the lie.
All traders, especially beginners, are swayed by their emotions. This is unavoidable. What you can do, however, is learn to recognise when your emotions are a factor. That way, you can account for their influence. Then, when you see a trade that seems perfect, you can ask yourself all the right questions. Once you’re aware of what role your emotions are playing, you can make an informed decision regardless.
Conclusion
Online Forex trading is very appealing to beginners around the world. However, it’s easy to make the mistake of believing you can go in blind. With online Forex trading academies freely available, there’s no excuse for not getting a good education and giving yourself the best chance of success.
