The forex market is one of the biggest markets out there. There are 5 trillion dollars traded every single day. Most money is traded by big corporations and banks.
That said, there are hundreds of individual traders (retail traders) who make a very lucrative side income or a full-time income trading forex. In this article, we will go over how to make money with forex.
There are a lot of advantages to trading forex. These include 24-hour markets Monday to Friday which you give the ability to trade anytime you want. Low transaction costs and high liquidity are a few of the other advantages of trading forex.
If you want to learn how to make money with forex you have to follow several steps that we will be going through in this article.
Start by Learning the Forex Basics
First, before you start trading forex, you should learn the basics of forex. These include the basic forex trading lingo and platforms that you will be able to trade forex with. Also, you need to learn about different forex trading strategies.
Following are a few of the basic forex terms that you need to know.
- Pips – A pip is the smallest unit of the price of a currency. Most of the forex currency pairs contain 5 or 6 significant digits. A pip is the smallest change which is a change of 0.0001. A pipette on the other hand is one-tenth of a pip. But, as a beginner or even an experienced trader, you don’t really need to worry about a pipette.
- Quote Currency – Quote currency is the second currency in a currency pair.
- Base Currency – Base currency is the first currency in a currency pair
- Ask Price – It is simply the price that the market would sell that currency at a given time.
- Bid Price – It is simply the price that the market would buy that currency at a given time.
- Spread – Spread is the difference between the asking price and the bid price.
- Short – Going short means you are entering a trade where you sell by the market.
- Long – Going long means you are entering a trade where you buy by the market.
There are 100s of other forex terms which we won’t be going through in this article because you really don’t need to know all the terms. Just knowing the terms above is more than enough for you to get started with forex trading and make money with forex. The next thing you need to know is what trading platform to use.
Learn about Forex Trading Platforms
There are several forex trading platforms out there. But, we personally use only 2 of them. Those are MetaTrader 5 platform and the trading view platform. Both of these platforms are amazing platforms.
Both of them have their own advantages and disadvantages. We personally use the MetaTrader 5 platform on windows and on android. That is what we personally recommend. There are several benefits to using the MetaTrader 5 trading platform. The number one reason is that almost all forex brokers support this platform. Also, this platform is used by 1000’s of other successful trades. Metatrader 5 is highly customizable as well.
Tradingview is another great platform that is completely online. It has a very nice and modern-looking interface as well. If you are interested in learning more about these platforms check out this article where we discuss in detail the MetaTrader 5 platform.
Learn about Forex Trading Strategies
This is where the money-making part comes in and we go through a few strategies that will help you make money with forex. Learning about profitable trading strategies is a crucial step if you want to make money with trading. If you search in google for a forex trading strategy you will find hundreds of different strategies. But, only a few of them will be profitable over time.
When choosing a strategy that will work, you need to make sure a few things such as:
- Is the strategy being tested and proven to be profitable?
- Do you understand how the strategy works?
- Will the strategy be able to generate consistent profits throughout?
There are several forex trading strategies that we use that are proven to be profitable. A few of these strategies are the breakout method and trading using different candlestick patterns
The picture to the right shows 3 great beginner-friendly strategies that you can use to make money in the forex market.
If you are further interested in learning about these strategies we recommend you check out this article.
Choose a Broker and Get Started
One of the most important steps in becoming a profitable trader is to choose the right broker. There are 100s of different brokers out there but only some have proven to be very reliable. There are several things that you need to consider when choosing the right broker for you.
Some brokers don’t support certain countries so you need to make sure that your broker supports the country that you are living in. Also, the broker has to be regulated. If the broker is not regulated it cannot simply be trusted. The broker should provide good customer service as well. If you are interested in learning more about how to choose a good broker make sure to check out this article.
Also, to find a broker click here. These are the brokers we use and recommend.
Final Thoughts
Forex trading is indeed one of the best ways to make money from anywhere in the world. If you master the skill of forex trading you will be able to make a great living out of it. If you are interested in learning more about trading forex we recommend you check out our trading guide. Also, make sure to check out other articles on this website for more knowledge about forex trading.
