If you’re a fresher to the forex markets and think there’s huge potential to earn profits, then it’s time for you to start learning about the markets since there’s quite a bit to comprehend before you actually get into analysis and the trading part. Unlike financial instruments such as equities where all the information you need about a particular security including the key fundamentals can be quickly accessed, understanding forex markets could be a little more complicated and time consuming. That’s because the principles governing FX markets are slightly different from those overriding equities or the other asset classes although at times they may have a high degree of correlation and react in sync.
Forex trading broadly comprises of FX pairs pitted against one another and the strength or weakness in one currency may not translate to the other pairs having the same underlying currency since the fundamental factors of a country or region are different from the other and are constantly changing.
For instance, the Brexit referendum on June 23rd 2016 has not only altered the political landscape of the United Kingdom and the Eurozone, it has also drastically altered the correlation in the forex rates of Pound Sterling and the Euro. While the Sterling is still down about 14 percent to the US dollar and the Euro individually since the referendum until the mid of January 2019, the Euro is mostly unchanged versus the greenback during a similar period. However, versus the Japanese yen, the Euro is up about 8 percent and the Sterling higher by more than 3 percent correspondingly.
There are quite a few options to choose from when it comes to gaining knowledge about the forex markets. Although there are no specific guidelines on how you go about acquiring the desired knowhow, you can start by understanding all the key terms related to the forex industry from a forexpedia or a forex vocabulary. Once you’re familiar with the forex jargon, it would be a great idea to get into a little more detail about the industry, participants, types of forex brokers, margins & leverage, trading platforms, regulation, trading risk, security of your funds and all other info that can help you master your skills and eventually prepare you for the big day when you’re all set to begin trading in LIVE markets.
Gaining forex knowledge is extremely important before you begin investing and there are a number of websites and free online forex tutorials for beginners which cater exclusively to retail investors who wish to learn everything there is to know about these markets. Once you’ve gained sufficient theoretical knowledge, you can start analysing the forex markets using a demo account to get a feel of the volatility and risk associated with the 24/5 forex trading before you dive in with real cash. Demo or practise accounts are extremely useful since you trade with virtual money in real-time markets and are generally used by beginners to check out the quality of the trading platform, experiment with the large number of trading instruments, build their skills and develop trading strategies.
JustForex has a state of the art retail forex demo platform with investors having the option to test more than 90 trading instruments at their disposal. The platform supports both desktop and mobile devices and is programmed to run on all operating systems.