Getting into Forex or being in it for quite some time? There is always more to learn or remind yourself of essential things, but you tend to overlook them because everyone mentions them all the time. Whatever the case is, it is good to know the top five things (we consider important) about Forex, so you can know where to start, what to do when you feel stuck or indecisive and where to draw a line. Here’s a brief overlook of five things you should know about the Forex industry.
You can easily avoid scams
Despite what people tell you, if they fell for a scam, it was in the heat of the moment, and they acted impulsively, instead of any logical thinking. Sounds harsh, but it is the truth. We are not trying to condemn these people, because everyone has their weaknesses, especially if you are low on money, or need to pay off debt. Naturally, as soon as you hear from someone you can earn thousands of dollars within a week, your mind will catch onto that as the last straw you can see and be sure you got it covered. People who had only heard about Forex without diving deeper before someone called them and offered to open a trading account with them, are most likely to fall for it. Why did they call you? Because you clicked on a flashy ad, where actors (not actual clients) spoke about how rich they became and how they didn’t have to work anymore. As you click on an ad or visit a website, it will automatically give your data such as name, surname, and phone number as you accept cookies. It benefits them, but it won’t help you if you fail to recognize that nobody will give you such an amount of money with barely any action and investment. You can quickly check if the company is a scam by checking regulator websites and see if they are on the list of licenced and certified companies. You have a full right to think about the offer. Don’t feel cornered. It’s your money, and only you can decide what to do with it. Respect what you’ve earned.
Everyone starts small
Another myth to bust is “invest everything; now is the right time”. The market is volatile. Hence there will always be opportunities to invest and gain from it. You will often hear this sentence from people who pick up pieces of information while talking to their friends randomly about Forex or reading another clickbait on the internet. It is recommendable to start small, and every good broker will tell you the same. Your risks are lower, and you won’t be under lots of pressure if you invest, for example, $50 and see what happens.
You need to get into the Forex market to learn
Starting small isn’t mentioned, “just because”. Its purpose is to put yourself in the role of an active Forex trader, the quicker you can. You will have the opportunity to play around with a demo account, but once you start trading live, it’s the real deal, and your eyes are wide open because you know you should pay attention and be careful. You will analyze charts more carefully, and dedicate yourself to learning more than you would have if you stayed in the comfort zone that a demo account offers. A demo account is not a bad thing, but if you use it for too long, you will lose a sense of what it means to invest your money and not go overboard. Naturally, you should not invest more than you can afford to lose, because even if the investment goes wrong, you won’t suffer a significant loss in that case. Always look at the bigger picture. Profitable traders are in Forex in the long-run.
Index funds are great when you are not investing too much, but you don’t want to put faith into one stock. Experts don’t recommend putting all your money into one asset, because if it goes down – your investment will. That’s why index funds are handy – you get to invest in a bunch of pieces of stocks, therefore having more chance of gaining profit. If one fails, others will probably rise, and you can mostly count on that. Bear in mind; it still doesn’t mean you should invest all the money you have in your forex trading account.
Trading with leverage, simply put, means trading Forex with money you borrowed from your broker (and he will charge fees for it). However, trading with leverage is important because it can allow you to raise your chances of gaining on the market. Keep in mind that leverage isn’t beneficial for crypto if you are interested in trading with Bitcoin, Ethereum, etc. However, if you are trading commodities, stocks, currencies or ETFs, it can be great for your trading journey. Just make sure to discuss it with your broker first. In the end, everything is your choice, but make sure you do proper research before you invest money in anything you don’t know enough about. And keep learning!