Online forex trading is increasingly becoming a career, whether as a full-time job or a sideline. Sadly, as much as 90 percent of traders fail to make it in the industry. Some dry up their accounts in as short as 6 months while others manage to breakeven after years of trading. If you don’t want to end up like this, understanding online forex trading is imperative.
If you are going to take away anything from this post, let it be risk management and its importance. Acknowledging the possibility of loss is equivalent to understanding online forex trading in its rawest form. Managing risk will prove to be difficult in the early stages of a trader’s career. Overwriting the human nature of being correct will take self-awareness and ironclad discipline.
A technical approach to trading involves working with historical price data. If the idea of building software and algorithms to predict market direction appeal to you, then technical analysis should be your focus.
For price movements sparked by economic catalysts, this is considered under fundamental analysis. Debt crises, geopolitical turmoil, and central bank policy changes are all fundamental factors that govern supply and demand in a country’s currency.
Trading forex online involves a certain level of risk. Use the guidelines above to minimize the risk involved and consistently generate profits at the same time.