What should I study to become a Forex Trader / What is currency trading?
The world of finance is an exciting one and earning profits by trading as a trader is always one more possibility you can consider, especially now that our world is fully digitalised. If you want to know more about one of the most interesting professions or occupations that are exclusively carried out digitally, this article will be of interest to you.
What is a Forex trader?
A Forex trader is a person who trades in foreign currencies, the anglicism comes from the words Foreign Exchange. As you should know, currencies fluctuate on a daily basis and this is conditioned by a multitude of factors, both economic factors and those derived from the political situation. To give just one example, the conflict in Ukraine has caused the value of the rouble, the currency used in Russia, to fall by 90%.
If you are a currency trader, you can take advantage of these fluctuations to your own advantage and earn a financial return that comes from the very fluctuation of the world’s currencies. As currencies are bought and sold, they are subject to the law of supply and demand.
Therefore, a trader who decides to trade Forex dedicates his time and knowledge to take advantage of these situations and thus make a capital gain.
What are the advantages of being a trader?
The physiology and philosophy of any forex trader is to buy low in order to sell higher. Obviously, this can be done with currencies. This profession has a number of advantages that make it very attractive to anyone interested in making a return.
Traders can be full-time professionals working for financial or banking institutions, or they can take up part or all of their time, but acting independently.
If we focus on the figure of the independent trader, it should be noted that you will be under the protection of a company that is behind you and that provides you with professional tools or any kind of help.
If you are a part-time or full-time independent trader, you have total freedom to trade without restrictions.
If as a freelance trader you use your knowledge to trade the markets, you can turn it into a profession and have full financial freedom, without any subjugation. Another of the advantages associated with currency trading is that you can trade 24 hours a day in any of the world’s markets.
In other words, you will not have to submit to a fixed timetable.
However, if being an independent trader is full of advantages, you must keep in mind that you have to be very disciplined in order not to fall into anarchic trading that can lead to losses.
Therefore, even with certain freedoms, you must set a schedule in which you are going to operate and you are going to make the most of your time. You should also consider that part of the time you do not spend on trading should be spent on training.
A trader must always be aware of the global economic situation, of the areas of interest and of the markets. Obviously and as has been demonstrated on many occasions, the geopolitical situation has a high impact on currency trading.
What do I need to learn to become a Forex trader?
The answer to this question can be applied to currency trading as well as trading other types of products.
First of all, you need to get rid of the idea that you are going to get rich in a very short space of time. Learning to trade foreign exchange involves a solid knowledge that has to be acquired little by little, without any pressure.
On the other hand, the desire to make your way in an interesting occupation should push you to read any information related to Forex that is of interest to you. That is to say, before trading you should be aware of everything that is happening in the field in which you are going to move. Be certain that you are never finished learning and that you should always be cautious, while making modest moves.
Fortunately, our digital world provides you with a wealth of tools with which you can acquire knowledge that will help you to trade currencies.
A free tip if you are trying to make money in the forex market in the short term: try to stay away from those gurus who promise you an immediate run of success. In order to profit from the forex market you have to be “chasing your tail” for a long time. As we will see below, demo accounts are an excellent learning tool.
How much does a home-based trader earn?
The answer to this question is determined by countless factors. Firstly, the initial investment you make. If it is a modest amount, the results will be modest too, but it may be enough to earn a supplement.
In the same way, the way you trade will also determine the size of your profits. If you execute trades that are short, highly leveraged and involve a lot of risk, your profit volume may be high, but you also run the risk of losing a lot of money.
Therefore, the best option once you have determined that you want to make a return on your trades is to be very clear about what your capital is going to be. How much you are willing to lose and how much time you are going to devote to it. Obviously, there are people making a living from Forex trading, but they are never newcomers who have had a stroke of fortune.
Keep in mind that it is indeed possible to make a living out of it, but it takes time and a lot of knowledge.
##Advantages of using a DEMO account in Trading
Demo accounts are an excellent trading instrument. They are generally suitable for people who do not yet have a solid knowledge of trading.
A demo account is nothing more than a space on a platform where you can freely trade all kinds of securities in real time. These values are the quotes as they are produced, but the money used for trading is fictitious.
Therefore, you are free to make investments and check how they have performed. Rather than risking your own capital, a demo account makes it possible to assess the extent of your investments and is a necessary learning space.
Currency trading can be a good place to start to build up your income in the beginning. Later on, if you are able to dedicate more time to it, it may become a way of life and allow you full financial freedom.
To put all your knowledge into practice, we recommend that you open a DEMO account with NAGA which will allow you to have a DEMO account with $10,000 so that you can make the trades you need without using real money. In addition, you will be able to discover the great benefits of Social Trading, and earn money while helping others to earn money.