Currency Trading and Forex : A Beginner’s Guide

You would like to trade currencies and know how this works ? But you are not a professional trader like, for instance, Nathaniel Glas… Here are a few definitions and basic tips for you to understand how Forex and currency trading could get you to make money.

What is FOREX?

FOREX is the acronym used to designate the Foreign Exchange, the currency market. It is the place where foreign currencies are being bought and sold. You can use FOREX when you work in International Trade Relations for instance or even for personal purpose, when you travel. The actual currency policy has been set up in 1971 by the Bretton Woods agreement. This agreement allowed currencies to fluctuate. The trading CFD (Contract For Difference) FOREX for individuals was created in the years 2000  with the internet democratization. It made the FOREX accessible to everyone.

Currency trading is a fickle market that sometimes allow you to make huge profits. Of course, this kind of profit come with a substantial potential loss.

How to trade FOREX?

There are numerous ways to trade FOREX :

  • Scalping : This term describes a trading style that usually consists on holding an asset during a few seconds, a few minutes at the most. Traders find scalping opportunities when they look for extreme prices in the market.
  • Leverage trading : Leverage is defined as the ability to control a large sum of money using very little of your own money, or sometimes even none at all. As such leverage trading allows traders to open positions in the market that are much larger than their available capital.
  • Hedging : Hedging your FOREX allows you to offset the risk of price fluctuations and to reduce unwanted exposure to currencies from other positions.

5 tips to trade FOREX

If you are a trading beginner, here are a few tips to help you manage currency trading and the FOREX :

Know yourself

To make trades, you need to know risky and safe areas of the market. For this, you have to acknowledge yourself and your skills and knowledge. How much money do you have to invest? How keen are you to take risks ? What is your temper ? Trading psychology is very important to make investment decisions.

Invest only what you can lose

Currency trading, like every other type of trading represents a certain amount of risk taking. You can’t expect to make some profit without acknowledging the fact that you lose it all.

Start with just one pair of currencies

There are so many pairs of currencies on the currency trading market. At first you should trade only one pair of currencies, so that you can learn how it works. Diversification is important if you want to make an interesting profit, but you must take the long road to avoid big mistakes. After that, you could diversify.

Control your emotions

People wondering how to trade the FOREX know that online trading is a stressful activity, partly because it can generate losses. Be careful about the state of stress or excitement you are in when you trade. You need to be focus, reasonable and focused to make the right calls.

Keep a trading journal

We always learn from our mistakes, in life, but in currency trading too. Keep record of your past actions whether they are mistakes or good moves. 

Don’t forget that currency trading and FOREX, like any other kind of trading, is a risky business. If you don’t feel comfortable with going at it yourself, at least at the beginning, you should definitely ask for help or advice from a professional trader like Nathaniel Glas, this could help you avoid losses due to being a beginner in a wild world.


  • Editorial Director of the The Fintech Times

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