Anyone can get started as a foreign exchange (Forex) trader with just a computer and an internet connection. Setting up an account with a broker can be done with as little as $250. To be successful, a trader needs more than just an account with a broker. There are many Forex trading tools available to help a trader to make the right decisions and profit from their trading.
Before a potential new Forex trader starts investing, the best tool available from most brokers is a “practice” account where you trade without risking any real money. These practice accounts should mimic a trading account allowing a potential new trader the opportunity to get a feel for the market. They also enable the new trader to test out possible strategies.
All major brokers use one of the main trading platforms and these will offer a number of different charts that allow the historic tracking of a currency. Most charts will allow traders to look at the historic movements over a variety of time periods. Whilst these charts will not provide a forecast, they can help in formulating a strategy. These charts will use different methods of presenting the results so an understanding of them is required before they become a useful tool.
As Forex markets work around the world on a 24 hour basis with a break at weekends, the trader may wish to keep track of exchange rate movements on their mobile phone. Most brokers will have an application that can be downloaded to a mobile phone allowing the trader to monitor their investments and even conduct trades.
Important influences on the Forex rates are the various financial statistics for each individual country. For instance if there was a sudden unexpected large increase in the unemployed in say the USA, the US Dollar could weaken significantly. An experienced trader will often have a feed of the headlines of all the major financial indicators so that they can make quick decisions to trade. These quick decisions can make the difference between significant profits and losses.
For new traders, gaining and understanding the information available is one of the most important factors in determining whether they are successful. There are numerous internet based forums available and new traders should join at least one of them. These forums allow new traders to interact with more experienced people and gain valuable knowledge.
The most important tool for anybody in any occupation is the one most overlooked- the human brain. This organ of the body is able to process complex information as quickly as any computer. Just like a computer, if the information supplied to the brain is not accurate, then the output (i.e. decisions made) will not be accurate. This means study and practice to hone the most important tool available into a valuable resource. Therefore, it is essential that the trader properly understands the information available to them so that profitable decisions can be made.
Chris Dibbs is a novice Forex trader who is looking to connect with like minded people. He recommends using Forex Trading Tools to keep up to date with the current financial market.