Forex trading (buying and selling foreign currency) in 2021 requires a lot of knowledge because it is seen as one of the riskiest types of investment . However, if successful the results are very big. Use both sides of a knife, if you make a wrong move you will definitely get hurt.
Becoming a trader can attract anyone’s interest, even beginners and housewives are not left behind. Investment is not exclusive to the rich class only. For beginner investors who are interested in trying to make money, here are tips on 7 ways to learn forex trading correctly:
1. First understand the science of trading
The old adage says don’t know, don’t expect to be loved. The initial process of learning to trade online forex or foreign exchange is by learning the science of forex itself. Among the methods that can be used is looking for information available on the official website of the Financial Services Authority (OJK) .
OJK offers public services in the form of complaints and also requests for information regarding financial products. The request is sent through the procedure on the OJK website. Searching for yourself on the internet is also recommended, provided you use information from primary sources, namely trusted financial websites and do not take it from blogs.
Another recommendation is to choose a mentor from those who have already been involved in the world of forex. The key is to look for tutorials about forex trading in detail before entering the market so you don’t get the wrong target.
2. Enter other investment instruments
To start learning forex trading for beginners, investors need to try almost the same type of investment as before. For example, go into mutual funds, stocks, or dollar savings accounts. So that novice investors will understand the investment flow involved, including the various risks faced.
Based on this trial, you will better understand the ins and outs of investing. That way, investors will know and experience profits and losses. Don’t just hope for profits, especially if you are still at the stage of finding the most suitable strategy. Because you are still at the learning stage, provide the minimum funds possible to reduce losses if they occur.
In Indonesia, many banks offer investment in the form of mutual funds. The funds needed to play mutual funds are cheap, some even start from Rp. 10,000 only. While studying at mutual funds, learn how to choose a profitable stock portfolio as a basis for your future forex trading business.
3. Provide Ideal Capital
Each broker certainly has its own requirements regarding the funds needed for forex trading. Because you’re still a newbie, it’s a good idea to invest a little first. Consider it capital to practice playing forex. When you are proficient, please add new funds.
Low funds when you are a beginner investor are also useful in reducing the level of losses. Apart from that, investors feel confident that they can achieve success and will gain profits from the investment. The budget for these investments must be separated and not just taken from other budgets.
Later, when forex trading is successful, don’t be rampant by pouring most of your capital into this one investment. It must be remembered that investment funds must be taken from the investment budget.
4. Choose the Right Broker
With the funds available, now novice investors must take steps to learn trading by looking for a broker who meets this amount of capital. For this reason, it must be emphasized that forex traders are recommended to choose brokers who come from within the country as well. The reason is, it is easier to check the legitimacy of the brokerage company.
Apart from that, if unexpected things happen, for example a broker goes bankrupt or other bad incidents, taking care of it will be easier. Find a broker who is registered with the Commodity Futures Trading Supervisory Agency (Bappebti) who can be guaranteed to be legal and quite credible. Considering that forex trading is included in commodity trading (currency is included in commodities).
Apart from that, prioritize choosing a broker that offers low commissions or spreads plus one that doesn’t charge any fees. You are lucky if you find a broker who offers a free consultation fee. Indeed, brokers are a type of business entity with the main aim of making a profit.
However, a good broker is one who is willing to seek profits with traders and not seek profits himself. You may find various offers from brokers, for example investors will get a bonus when registering as a trader or a certain amount of free capital. However, this cannot be used as a guarantee at all if the broker is worth choosing.
5. Have a qualified device
The main weapon when carrying out forex trading activities is a gadget plus a reliable Internet network. These devices can be in the form of PCs, laptops or smartphones. Remember that forex trading can be carried out 24 hours a day for up to 5 consecutive days.
This trading activity certainly requires an Internet network because everything is done online. So, a good connection must also be available so that transactions don’t have problems in the middle of the road.
It could be that the opportunity to make a profit that is right before your eyes disappears because of technical obstacles like that. In fact, you might lose up to millions.
The most ideal is of course a PC or laptop device with decent specifications that has a large display screen so that it is comfortable to observe price movements or charts of the currencies being traded.
6. The need to practice a demo account
Each brokerage company usually provides a demo account feature , namely an account that can be used to practice forex trading. Practicing on a demo account is necessary to understand the various stages of forex trading in the application provided by the broker.
Use the demo account well so that you don’t hesitate when you actually have to choose whether to sell or buy forex in real trading when you have to use real money. Once you start to get bored with the demo account, then prepare yourself by using real money. Start with small capital so you don’t lose too much.
There is no need to use sophisticated strategies, there are various simple but profitable trading methods available that you can apply. A strategy that is sophisticated but cannot be implemented is the same as lying.
7. Discipline Is Everything
The final process on how to trade forex to make big profits is to train discipline as a trader. Disciplined habits are needed to be able to decide the right time to sell or buy the chosen forex.
The forex trading formula is actually simple, sell when the price rises and buy when the price is cheap. It’s just that forex trading is dynamic. If they are not disciplined, of course investors will easily be tempted to find out that foreign exchange prices are falling without considering the further potential.
It must be known that when foreign exchange falls, it will not immediately rise. It may even continue to decline which will result in losses for traders. Technical analysis is a step that must be mastered adequately.
Traders who are skilled in technical analysis often fail, rather than those who don’t know anything at all who just buy. Giving up quickly is one of the mistakes that novice investors often make.
Every investor is certainly interested in making a profit. However, trading is not as simple as turning the palm of your hand, especially in forex. If you really plan to enter the forex trading investment option, first prepare the various things mentioned above. There is no exception mentally when experiencing losses which are very likely to occur when trading foreign exchange. Happy investing!
