Many investors want to reap the benefits of online forex trading immediately, even when they have limited knowledge and understanding of the basics and intricacies of online trading.
A good number of traders who join forex trading do so due to enticing advertisements on social media websites which promise super high returns.
They want to put in money, and get immediate returns within the shortest possible time. They are driven by immediate self-gratification and are easily lured, and as such do not take time to understand the do’s and don’ts of the trade, or even do due diligence on the companies promising them high returns.
Unfortunately, there are no shortcuts if you want to benefit from online forex trading. You must be prepared to invest in forex education and training if you ultimately want to be a successful trader.
Investing in knowledge of the volatility of financial markets, micro and macro-economic factors, geopolitics, technical analysis, and the trading platform is crucial to profitable trading, and will ultimately pay dividends.
A savvy investor will also need to understand the stock market, its cycles, its rotations, its sectors and industries, individual stocks, and the general economic environment where the stocks are offered.
Invest in education
By investing in forex education, traders are able to navigate the many hurdles and challenges that come with the trading, which are only recognisable by investors who have the proper knowledge and experience.
It is worth noting that online trading is similar to other investment business where you get good returns after investing in professional investment practice, and exercising patience.
Investors need to stop viewing forex trading as a get-rich pyramid scheme of where you put in money and get high returns with minimal sweat. Traders who go ahead overlook the basics of trading often.
Some investors have experience working with other financial assets, such as stocks, commodities and indices. However, they need to know that forex trading is a different market that incorporates its own terms, principles, and concepts. Investors must know more about forex international markets, primarily the major currency pairs like the EUR/USD and the GBP/USD currency pair.
Investors also need to have the right skills for assessing currency price movements to enjoy a lengthy and successful career in forex international trade. The good news is that it’s something people can quickly learn, thanks to the forex learning material incorporated in online broker platforms.
Investors should do due diligence on the companies offering trading platforms, and also scrutinise the onboarding process. They should avoid trading with unlicensed brokers who have filled the online space, duping gullible investors and traders. In Kenya, it is advisable to only trade with companies that are registered and licensed by the Capital Markets Authority.
As said earlier, forex is similar to any other business. It means investors should have the same business approach which includes a clear business plan and objectives in place before deciding to invest. It is also important to remember that one can only design a plan that fits personal goals and personality.
For example, global currencies are exceptional investment tools for well-informed traders. Nonetheless, learning a single investing technique will make one vulnerable, hence the need to have excellent knowledge about Algorithmic pricing, trade flows and price action. It is also essential to have current information about the interbank market.
Invent a strategy
Well informed traders also know that counters which have high profitability are also prone to big losses. As an individual trader, forex education helps in learning that high leverage incorporates high failure chances.
In such a case, one needs to invent a strategy with practical leverage as it goes a long way in helping one to have a proper risk management plan, lower risk tolerance, the best risk management tools and fundamental analysis features. By investing in a forex education course, an investor can enjoy profitable trades while mitigating possible failure.
Licensed brokers, such as Scope Markets, offer free beginner trading workshops every week, where investors get all the insights needed to get started in global online trading. Registration for the training is free through the company’s website.
Mr Karanja is the CEO, Scopes Markets. E mail: [email protected]