An attempt has been made to give the new comer in Forex trading a bird's eye view of what the market is. The benefits and risks are explained in the coming blogs.
With a small capital to invest the first instrument that comes in mind is the Forex market, because forex trading can be started with a minimal amount of capital as low as $300 and the option to exit the market at short notice is another advantage.
Forex or the Foreign Currency Market has another advantage it is open 24 hrs a day, so even if you are busy with other activities you can keep an eye on your investments at a time comfortable to you. A $300 investment allows you to trade in lots of 10,000 units. One lot of 10,000 units is equal to one contract. Each pip or move up and down in the currency pair is worth a $1 gain or loss. A standard account gives you control over
1,00000 units of currency and a pip is worth $10.
Forex market is one of the most liquid markets; you have full control of your capital when you trade in forex. Most of the other investment requires you to hold your money for a period of time if that is not possible you might end up taking a loss. The capital required to enter the forex market is also very low.
The most important thing that one needs while trading in forex is discipline. You should follow a system while you trade greed or rumour should not be your guide. Good money management skills and a good system will make forex trading a relatively low risk investment.
An important thing to follow before you jump into forex trade is to practice with "paper money", or fake money. Most brokers have demo accounts where you can download their trading station and practice real time with fake money. Though this is no guarantee of your performance with real money practising can give you a hue advantage to become better prepared when you trade with your real hard earned money.
