Forex Training: The Best Ways to Learn to Trade Forex • Benzinga - Benzinga

If you’re looking to learn how to trade foreign exchange or forex, then you will want to get started on the right foot by taking some decent forex training from experts in the field. Appropriate types of forex training can involve getting specialized instruction in a course environment or being mentored by a successful professional currency trader.

If you plan on taking part in a forex training exercise as part of your preparation for becoming a forex trader, then look for an educational path that will give you the skills and information you need. For example, you’ll probably want to learn about trading strategies, market analysis and sound money management principles just to get you started.

Read on for more information about forex training and for Benzinga’s take on how you can best learn to trade currencies.

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What is Forex Trading?

At its most basic, a foreign exchange or forex transaction entails buying one national currency and selling another at the prevailing market exchange rate. Forex trading is a strategic, speculative activity that involves engaging in forex transactions with the goal of profiting from forecasted exchange rate movements.

Keep in mind that if you are used to investing in the stock market with the goal of increasing your net worth over time, for example, then you should know that trading forex has much more in common with strategic gambling than with any type of prudent investing.

For non-professionals who can now trade currencies in the retail forex market, getting set up to trade forex generally involves opening and funding a margin account with an online forex broker and executing forex trades via a forex trading platform. Many retail forex traders use MetaTrader 4 or 5 to get started since the platform is available as a free download from its developer.

Why is Learning Forex Trading Important?

Many people might want to profit from forex trading, but only a few of those starting out in the field seem to want to prepare themselves properly to become successful currency traders. Although the mechanics of trading forex are very easy to master, learning how to trade forex profitably can take a lifetime to achieve.

The sobering fact is that most retail forex traders lose money, and they do so for a variety of reasons. Some may have failed to familiarize themselves thoroughly with the market and its driving factors. Others may have started operating without having sufficient trading capital to survive a virtually inevitable string of losses. Then there are those novices who do not develop and test a decent trading plan that includes practical money management principles to help preserve their trading capital.

With that noted, just about anyone willing to put in the time and effort to learn and understand how forex trading works has a shot at becoming a profitable forex trader. The retail forex market has opened wide in the past few decades to accept new participants from any background, and that includes you.

Five Ways to Learn How to Trade Forex

No matter whether you want to learn how to become a day trader or a scalper, if you’re looking to learn about forex trading for beginners, then Benzinga has compiled a list of five ways below that you can get started with that important task.

Self Education

Before online forex trading arose a few decades ago, very few avenues existed for retail traders who wanted to learn how to operate in the forex market. No formal forex trading educational process existed, and pretty much the only way to learn how to trade forex was by working as an apprentice to a professional forex trader working at a financial institution or on an exchange where currency futures were traded.

With the advent of online forex brokers and the almost unlimited educational resources available via the Internet today, teaching yourself how to trade in the forex market is much easier, more readily available and less complicated. For example, you can read numerous expertly written articles and books, as well as view webinars and educational videos on the subject of forex trading.

The fastest and probably the best way to learn how to trade currencies is with hands-on experience that you can easily get for free by opening up a demo account with an online broker. A demo account lets you practice trading the forex market in real time using an online trading platform and virtual money so you are not exposing your funds to risk while you learn the ropes. Practicing in a demo account gives you an excellent feel for the forex market and a great framework for self-educating yourself in forex trading.

Social trading is another increasingly popular avenue for learning how to trade by watching and copying a successful trader's transactions in your own account. You may also have the option of following another trader’s transactions without making the same trades in your account. This practice lets you observe how that trader’s trading plan operates and uses signals for their position initiation and exit trades.

Perhaps the most obvious benefit of self-education remains the low cost. Teaching yourself can be much less expensive than a mentoring program or costly online forex trading courses. Nevertheless, self-education does have its advantages and disadvantages.

Pros:

Work and learn at your own pace
Develop your own trading strategy
Simple to begin
Low start-up costs
Focused education based on your interests
Can open a free demo account to practice in

Cons:

Steep learning curve
High risk when learning in a live account because of market volatility
Possible lack of structure

Forex Trading Courses

A variety of forex trading courses are now available. They largely exist online these days, although some are still taught in person. Some forex courses might be offered free of charge, while others have a substantial fee associated with them.

In addition to a basic introductory forex course, you can also take courses that cover specific topics related to forex trading techniques and forex strategies that you feel you need to learn more about. This process can help you fill in and direct your educational process.

Pros:

Learn through a structured program
Access to a variety of different trading strategies
Specific courses for different aspects of trading

Cons:

Can be costly
May not address specific trading strategies or concepts of interest

One-on-One Training

You can get personal training or mentoring from a professional forex trader. Many of those new to forex trading find this more personal approach effective once they have mastered the basics.

Most mentors charge on an hourly basis for general training and more specific consultations. Since some personal trainers and mentors are definitely better than others, it makes sense to get a referral from another forex trader who was satisfied with the training service they received.

Pros:

Personal attention to your trading goals and issues
Useful for fine-tuning your trading strategy
Can be done remotely
Take advantage of an expert’s wisdom

Cons:

Quite costly since you are paying for the time of an experienced trading professional
Not all trading experts are equally good mentors

Video Tutorials

Watching online videos can augment your existing knowledge base on various forex trading topics. Make sure you are watching videos from people who actually know what they are talking about since just about anyone can make a YouTube video. Most online brokers offer video tutorials to their clients, so visiting your broker's website would be a decent place to start looking for videos from good sources.

Pros:

Progress at your own pace
Learn from home, while commuting or during spare time at work
Low or no cost
Good for filling in or furthering your trading education with specific topics

Cons:

Does not accurately reflect real-time market conditions
May not apply to your particular trading style

Forex Trading Schools

A forex trading school can offer online coursework or in-person workshops that can help you get a more interactive forex training session. The best type of forex trading school for your needs will depend in part on whether you can personally attend classes and how you prefer to learn.

Pros:

More structured educational process
Testing and milestones to gauge your progress
Introductory courses for a general overview of the topic

Cons:

Might require personal attendance
Extra travel and accommodation costs for in-person schools
Expensive tuition

Best Forex Brokers for Beginners

Some online brokers that offer retail forex trading are definitely better than others for beginners. For example, you will probably benefit from opening an account with a broker that offers good resources for forex trading novices like free educational materials, ebooks, webinars and video tutorials.
You will also generally want to select a well-regulated and reputable broker that offers a high-quality forex trading service to residents of your country. Finding an online forex broker can be especially challenging if you live in the United States since many do not accept U.S.-based clients.

Benzinga has simplified the process of finding a good forex broker for novices by compiling the following table of suitable brokers.

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Account Minimum
$50 USD
Pairs Offered
55
securely through CedarFX's website
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CedarFX is not regulated by any major financial agency. The brokerage is owned by Cedar LLC and based in St. Vincent and the Grenadines.
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Account Minimum
$250
Pairs Offered
87
securely through IG Markets's website
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Account Minimum
$100
Pairs Offered
80+
securely through Forex.com's website
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Account Minimum
100 EURO
Pairs Offered
50+
securely through AvaTrade's website
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Frequently Asked Questions

Can I learn forex myself?

Yes, you can learn how to trade forex from books, videos and other self-directed learning materials, although you may need expert mentoring if you fail to become profitable and wish to keep trading.

Can I learn forex for free?

Yes, many online forex brokers offer an extensive array of educational materials aimed at novice forex traders that can teach you how to get started trading forex. Keep in mind that learning to trade forex is not that hard, but learning how to do so profitably can take a lifetime.

How long does it take to learn forex?

It should take less than an hour to learn how to enter a forex trade. It should take a few months to learn what drives exchange rate movements and how to analyze the forex market so that you can take a strategic position in a currency pair. Still, it can take a lifetime to learn how to trade forex successfully, and many novice traders fail before doing so.

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