Have you ever looked at fancy businessmen and financial experts in dapper suits and wondered what they do? Have you ever wanted to dabble in economic matters, but weren’t sure how to begin? Or have you looked at a “get rich quick at home” clickbait and thought it was a complete scam?
Most of us don’t know much about high-end money matters like trade or market economy or exchange. In fact, our preconceived notions tell us that these arenas can’t be explored without a college degree or professional license. But what if that wasn’t true? Let’s find out if you can do Forex trading all by yourself.
The Foreign Exchange Market and You
One of the greatest examples of amateur trading is trading on the forex market. People without degrees or even training can trade on this market. But what is forex exactly, and how does it let just anyone trade?
The foreign exchange market, of Forex or FX market for short, is a global market for the trade of currencies. It is just like currency exchange but on a much larger level! How large? Oh, just 5.1 trillion dollars a day!
The United States stock market is one of the largest stock exchanges and has a 257 billion daily turnover. So if the Forex was worth 5 dollars, the U.S. stock market would be worth just a quarter!
Alright, so forex is a big and grand marketplace on the global level. People trade with each other on a small or large scale, as per their choice.
Forex exchange may be straightforward in concept, but it’s still a large market system. The exchange itself is open for trade 24 hours a day, on five days of the week. Various institutions, banks, and independent traders partake in exchange throughout the world. The special thing about Forex is that it isn’t centrally controlled. There’s no boss-man or senior authority. So technically speaking, anyone can start trading at any time.
Now, you might be wondering, what’s stopping you from joining the “get rich quick at home” squad? Before you start trading on your own, however, there are a few things to take into consideration.
Can You Do Forex Trading by Yourself – The Short Answer
Quite simply put, yes, you can do forex trading by yourself. And if that’s the answer you were looking for, then there you have it!
Although forex trading by yourself is completely possible, it requires a bit of a kick-start. Like anything else, you will have to put in some time and some resources. Independent forex trading is very much a viable option. But you have to move beyond the short answer to get into it!
The only way you can really know is if you get down to it and just give it a shot! You can give it a shot by opening an account at IC Markets or XTB. Get started today!
Forex Trading by Yourself – The Starter Pack
Forex trading is a skill that anyone can access. You could start forex trading today if you wanted to! And here is what you’ll need to know.
Forex Trading – What is it and How it works?
While trading in Forex, traders use a different currency. So you might buy in Euros and sell in Dollars, and so on and so forth. These trades can take place in currencies from anywhere around the globe. So how do you actually make money?
Forex does not run on random guesses. In fact, traders make educated decisions to try to profit. This process is known as speculation. When you make an informed decision about the rise or fall of a currency, you’re speculating. This is different from guessing because you use the information you have to take a call on how to invest.
Speculation can be based on current affairs and politics, on past market patterns, or a multiplicity of different factors.
The ‘T’ Word – ‘Trade’
The word trade gets thrown around a lot. Basically, trade is what takes place in the foreign exchange market. It’s the process of buying and selling. But that still doesn’t tell you much and might still seem pretty abstract.
Let’s try to understand what trade entails. Trade is something we’ve all done at some point in our lives, at some level. As a kid, you might have traded five pieces of candy for a chocolate bar. In this case, the treats were like currencies. Their values defined the exchange rate.
While trading in forex, you are exchanging a lot of chocolate bars and candies and trying to make more while you’re at it. Naturally, there are some complexities involved. And that’s why some might prefer to use a broker to manage the trading process for them. But it is entirely possible to start trading on your own as long as you understand what it means.
Who Is A Forex Trader?
So now you know what trade means. Does that make you a trader? Not yet, but you’re getting closer.
A forex trader can be anyone, and anyone can be a forex trader. You might be a professional trader for a set of clients or a firm. Or you could be an amateur, independent trader too. Some amateurs do it as just a hobby, while some make a complete living out of it. Either way, you’re a trader if you participate in the exchange that occurs in the forex marketplace.
As we’ve already mentioned, you don’t require any qualifications to be a forex trader. Although, if you want to be successful, you will need to know about currency exchange rates and other basic information.
Trading Without a Broker
Now you know that you can trade on your own. But what does trading on your own really boil down to?
Forex trading by yourself means trading without a broker. Many prefer hiring a broker so that they don’t have to analyze markets themselves. Not to mention, trading with a broker gives you what is called leverage. Leverage refers to pooling in your resources with others through a broker and this gives you a better position in the trading market.
However, making it big through the help of a broker has its downsides. You might incur equally large losses. Moreover, you might not even know how or where your money is going!
It seems tough, but trading independently is entirely possible, and even beneficial in some cases. With a clearer picture of what forex trading is, you can always give it a go yourself!
How to Start Trading Forex by Yourself?
To start trading, you will have to follow a few steps.
You can trade in three ways. Currency exchange rates are either regulated by the U.S. Securities and Exchange Commission or the Commodity Futures Trading Commission. You can also take part in over-the-counter trades, which are knowns as off-exchange trades.
Choose the mode of exchange you want to get into. The first two are supervised, while the third is directly between two parties. Once you’ve decided the mode, open a forex account.
In between these necessary steps, first-timers should also polish up their skills with some additional practice. There is no end to what you should know before trading. Here are a few things to keep in mind.
- Learn the Know-how
Trading on your own is all fine and dandy, but as previously mentioned, it’s not guesswork! So you will have to do your homework.
Learn about forex markets and trade from online and offline sources. To begin trading smartly, know what you’re trading and why you’ve decided to trade in it. You should have relevant knowledge about currencies and exchange rates too.
- Start Slow – Try the Demo
If you’re a first-timer who’s read up on trading, a good option is a demo account. Some online platforms allow you to trade without any consequences. Of course, you won’t be using any real money in this form of trading. But it’ll give you an idea of what you’ve signed up for.
The only way you can really know is if you get down to it and just give it a shot! You can give it a shot by opening a demo account at IC Markets or XTB.
- Start Small
Acquainting yourself with a demo account is only one step. To get an idea of trading, you need to start putting some money out there. A micro forex account will let you start small without any major losses.
Although learning about trading is important, the best teacher is always an experience. No one makes it big in a day and sometimes it can even take quite long. So if you fail, assess your losses and try again. Remember, the failures will only add to your experience and skillset.
With a micro forex trading account, you can get the hang of trading without losing out on all your cash!
- Know the Risks
Once you start trading, it might seem less overwhelming. And once you start trading successfully, it might even seem like a piece of cake. But it’s best not to get carried away when it comes to money matters. Always know the risks when you’re trading, and don’t get reckless about it!
It’s not uncommon to lose a lot of money if you become careless with trading. Especially for independent and first-time traders, there may be plenty of unforeseen twists and turns. Everyone is out to make money, and that means someone loses every time someone else wins.
Lastly, plenty of fraudulent accounts may try to trick you. Remember those “get rich quick at home” schemes? Those are probably frauds that you should steer clear of. So always stay sharp, and trade cautiously!
In Summation
Forex trading can be easy or hard, depending on your experience and expertise. Anyone can start trading at any time, all by themselves. This is the kind of skill that doesn’t require a degree, and that’s what makes it so great!
Forex trading by yourself means that your money is entirely in your control. Your profits and losses are directly managed by you. Some might find this frightening, while some find it thrilling, and others find it pretty empowering.
Forex trading is a pretty flexible activity, as well. It’s hard to say whether it’s the right thing for you or not. The only way you can really know is if you get down to it and just give it a shot! You can give it a shot by opening an account at IC Markets or XTB. Get started today!