For working and earning from home, Forex trading is one of the best options.This article will be the answer for those who want to know ‘ How to Start Forex Trading From Home’.
With the advent and the ever-growing ‘internet’, the jobs available for work from home are on the rise.
Starting Forex trading from home needs no heavy investments other than a computer with the internet connection.
You have to start with some money. But knowing the Forex market and the basic things about trading are more important than the investment.
The reasons for recommending you the Forex trading are many.
Let’s go through this mini tutorial, which guides you to the forex market.
What is Forex?
The exchange of money between the nations of the world is a continuous and ever going process.
Forex is a short form of foreign exchange.
In Forex, you are buying one currency by selling another currency. There is no physical buying of any goods.
The value of the currency of one country differs from another one.
The country with the strong economy has more value for its money than the countries which underperform in the economy.
The values of the currencies change continuously and currencies are at war with each other for the betterment of values.
The value of exchange depends on the stronger or weaker values of the currencies at the time of purchase.
There is no need to watch currencies of all the countries and watching prize movement of the major currencies is enough.
When compared with the stock market, there is no need for continuous learning about the newly listed companies.
Picking the right currency pairs and watching it closely is enough in forex trading.
As there is no need to worry about the 1000s of companies as you do in the stock market, this is very much suitable for the people who want to start forex trading from home.
The Currency Market
As it is international, it is the biggest financial market in the world.
The largest banks, giant corporations, governments and central banks play the major role in the market. The big banks determine the exchange rate and speculators who look for money also play their part.
It’s 200 times bigger than the stock market and handles about $ 5 trillion per day.
Forex trading occurs not in a physical location and it is called as Over The Counter market.
It is a 24 hours market and works five days in a week.
London, Tokyo, New York and Singapore are important trading locations and the start and end of the trading hours are the important trading sessions.
Currencies of some major countries constitute more than 90% of the trade and the pairs of these countries are known as major pairs.
EUR/USD, GBP/USD, USD/JPY, USD/CHF, AUD/USD and USD/CAD are the major currency pairs.
Currency pairs that don’t contain US dollar are called ‘Crosses’.
‘Currency Pairs’ which include the currency of an emerging economy are known as exotic pairs.
As it is international and vast, no individual can influence the market as it happened many times in stock markets
The Forex Terminologies
Starting the forex trade by knowing the basic things of forex is essential, even though you opt to start forex trading from home.
In Forex, currencies are always quoted in pairs, like EUR/USD, CAD/USD.
It is known as the quote and the currency on the left side of the slash is the base currency and the one on the right side is the quote currency.
Pip is the basic unit of measurement in Forex.
The forex trader should know about pip as it is a basic unit of measurement.
In a trading session, if the value of EUR/USD moves from 1.2229to 1.2230, the rising of 0.0001 value USD is one PIP.
The bid is the price which is best for the brokers to buy the base currency in exchange for the quote currency.
The Ask price is the best available price to sell the base currency in the market in an exchange for the quote currency. Ask price is also known as Offer Price.
When the buyer waits to see the rise in the price of the base currency, he would buy it when the price starts to rise.
The buying of the base currency to sell it for a still higher price is known as going long.
Selling the base currency when the price starts to fall, in view of buying at a still lower price is known as going short.
Lot denotes a size of the unit in which currency trading occurs in forex. The standard size is 100,000 units and for the convenience of trading mini, micro and nano lots are available.
Setting aside a minimum amount as a deposit with the broker is known as margin. It varies with the currency pair you choose, its price and the lot size.
It is a facility offered by the brokers to trade a position of a larger amount with the certain amount taken as margin. It helps the trader to take risks if he is sure about the profits and wants to take a position.
(A detailed discussion of leverage is available here)
You have to know about market order, pending order, sell stop, buy stop, sell limit, buy limit, stop loss and take profit.
These are all real safeguards and when you use it properly, they guard you like airbags which open in milliseconds in case of accidents.
Though a lot of national and international factors affect the price movements of the forex market, a lot of analysis and tools are available to guide you.
The continuous and unexpected movements are the nature of the electrifying forex market and making profits by knowing the market is the real game.
Tons of materials and guides are available and it is perfectly all right to start forex trading from home.
You may use the free materials or the paid tutor service to acquire the basic knowledge. It’ll help you to start forex trading from home.
The Advantages of the forex trading
The market is enormous in size. The price movement is quick and the market is highly volatile. What makes the forex more attractive is this liquidity.
Initially, you can practice trading by using the demo account, which exactly resembles the actual trading. You won’t lose your money and will know the trading by yourself.
A lot of free stuff is available online to learn the trade.
As it is international and huge, no one can influence the market. It is free of manipulations.
It’s a 24-hour market and the market never sleeps. No need to wait for the starting bell as in stock trading.
The transaction cost is low and the retail transaction cost is less than 0.1% under normal market conditions.
No fixed lot size is required to start or do the trading. Very small amount of money is enough to start the trading.
The absence of commissions and middlemen in Forex Trading is a worthy factor to be appreciated.
Leverage helps the trader to keep the risk capital to a minimum level and at the same time, he can make nice profits also.
If you are confused whether to follow technical analysis or fundamental analysis, read this article.
Know the world-renowned traders
With the proper knowledge about forex and with the proper tools and techniques, you can earn a lot in the forex market and there is no limit for your earning.
Knowing the persons who took the world by storm in the forex market will boost your confidence and will reveal the human possibilities.
Here is the list of top 10 personalities.
‘The man who broke the bank of England’, was born on August 12th, 1930 in Budapest, Hungary. He founded the Soros Fund Management Company in 1969. The moment which earned him the name happened in 1992, when he short sold an amount of 10 billion pounds sterling. His bet against the UK currency earned him 1 billion dollars.
The well known American trader was born on June 14th, 1953 in Pittsburg, Pennsylvania, United States.
The opportune moment which earned him fame came when he sensed the under value of German Currency. He decided to buy the German Currency and subsequently earned one billion dollars by betting on the German Mark.
This trader focused his attention on the New Zealand currency known as Kiwi, when the world financial market was in disarray.
He rightly judged the overvalue of the Kiwi and used the opportunity for short selling. He earned 300 million dollars in the trade.
He was born in 1956 in Farmingdale, New York.
In 1982 he came to Salomon Brothers Investment Company for a training program. Then he worked for the company full time.
He made $300 million per year for the company until he left it in 1990.
Bruce Kovner, who was known as ‘an objective and sober trader’, was born on 1945 in Brooklyn, New York
In his first trade, he used his credit card to invest $3000 and got back $40,000. As the employee of Commodities Corporation he generated millions of dollars in revenue. Im 1983, he founded Caxton Corporation which generated over 14 billion dollars in revenue.
Michael Marcus started his trading career in 1972 and earned over $80 million by using his $30,000. He achieved this remarkable feat in less than 20 years.
He held positions in German Marks for 300 million dollars and used the value of a strong dollar in Ronald Reagan’s time to his advantage.
Then he was the biggest currency trader in the world along with banks.
PAUL TUDOR JONES
He was born on Seprember 28 in 1954.
He founded Tudor Investment Corporation in 1980 in Greenwich, Connecticut. His firm earned 14.3% returns which were mainly due to his position in Japanese Yen.
He was the 120th richest person on the Forbes 400( year 2017) list and his net worth was $4.7 billion.
He was born on February 5th, 1937 in Bow, London, United Kingdom
In 1992 he partnered with George Soros to reap from the fall of British Pound.
The rumor was, his earning exceeded the earnings of Soros’.
In 1994, he made a huge fortune by predicting the fall in Mexican currency.
He was born in September 17th, 1948 in Thalwil, Switzerland.
The Swiss trader started to work in a financial services company, Swiss Bank Corporation in 1968. In 1972, at the age of 24, he used 100,000 Swiss francs given by his father to earn his first million dollar.
In 1976, he founded his own company Intec Exchange and it was a success story.
He was born on December 7th, 1940.He was a hedge fund manager. He achieved a remarkable 24% compound annual growth rate for a period of 28 tears. It stands out as a record in Wall Street.
His worth is estimated to be over 1 billion dollars according to Forbes Magazine
( Image Source : knowleap.com )
You should accept the fact that Forex is not a ‘get rich quick’ scheme. Only patience and practice pave the way to success
Don’t meddle with your real currency and using one or two free demo accounts before involving real money is the right way to start trading.
Analyze the news feeds related to Forex. It would help in a better way.
You should develop a good trading practice. Patience and steadfast personality are the winning traits in the Forex market
Keep a record of all things as your own journal. It is a good trading practice, which many successful traders do.
Initially, it would be good for you to concentrate on one major pair only.
Read 10 Tips to Build An Effective Forex Trading Plan to know more.
Now let us conclude
Observation, learning, patience, practice and decision making are the inherent qualities which make good forex trader.
Acquiring these qualities doesn’t warrant any professional setup.
The passion with which you work definitely pays and there is no need to equivocate on the question ‘ How to start forex trading from home’.
It’s really simple and easy and for any queries like registration, brokerage etc wetalktrade is here to help you.
If you are confused on which blogs to follow for forex trading, go through our article 9 Best Forex Trading Blogs To Follow