From Beginner To Forex Trader

When you begin to investigate this business of day trading a plethora of information comes at you. Type in day trading, do a search and you get approximately million choices. That’s many info to sieve through. So where do we start?

There are some basic necessities that you must have before you will be able to begin. A fairly good computer is a must. The prices are coming down and the power is increasing day in and day out. So these days you will be able to apprehend afresh machine for about $800 that will do the job. A high end trading machine with all the bells whistles will set you back about $1500. One thing you must consider is how many monitors are needed. I recommend 2 because you can’t fail with screen real property in that business. Believe me it won’t attend waste. This will press-up the price a bit, but it’s well worth it. Be sure you patten flat panel LCD which comes standard when you buy a new machine. Remember your eyes. Don’t try and save a few bucks by purchasing an old fashion flickering monitor. Hours ahead of the screen can be a daily occurrence in that business. Computer auctions are a good option.

The second item is a fast internet connection. There are many options available here, but don’t go below ADSL. The speed of the information concerning your computer is very important.

Finally, on the hardware side, be sure your setup is comfortable. The desk should all in the right height and a swivel type reclining business chair is really nice.

Now you’re all set, so what do we trade? There are 3 basic categories to choose from. These are stocks and options, futures and commodities and foreign currencies.

Let us look at stocks. There are thousands of them. Then there are the exchanges such The New York stock market for the big boys then there’s the NASDAQ for the internet type younger companies. We also have pink sheets for stocks with low trading volume. How do you decide which stocks to trade. There are various software product that screen stocks for whatever parameters you input you will be able to screen for gapers, which are stocks that have approached or down by a fairly large amount when compared with the previous days close. Then there are lows and highs, unusual volume, income statement, other reports that affect the stocks price, sector performance and on and on that goes. It can be a daunting task deciding “how” if you would like to trade stocks. What about options? They’re too specialized for the beginner in my opinion. Learn something simple and so you will be able to graduate to options if you so desire.

Futures and commodities on the other hand offer the trader a much smaller basket of goods to choose from. I’d stay out of commodities if you’re just learning. Commodities such grains, orange juice, coffee and pork bellies etc. require the trader to acquire knowledge about the peculiarities of the commodity. For example, when is the end of the grain harvest? How has the weather affected the harvest, and a host of other variables. There’s an easier way!

When we take a close consider foreign currency trading we see some decided advantages compared to the other instruments already mentioned. Foreign currency trading, commonly called forex, involves the buying and selling of one currency against the other. Among the huge advantages of forex is its’ liquidity, which is the volume of transactions measured daily, weekly or annually. The liquidity in forex is second to none. This is important because it means when you trade you’ll almost always get your fills. Can you imagine buying a stock and it starts to dive and you can’t abolish it because of lack of liquidity! This wouldn’t happen in forex trading. Another advantage is its high daily range. This means every day the currencies increase and decrease in price enough to allow the trader to have opportunities for trades every day. The forex market also gives you flexible work hours. All-round the globe as is currencies are being traded from almost sunrise to sunrise. You will be able to literally choose when you prefer to trade. It’s ideal for learning and practice if you’ve a current job and would like to transition to trading over a time period, or if you would like to just trade on the side. One of the biggest advantages of trading foreign currencies is the leverage it gives the trader. This means you will be able to start with as little as US$2000 or sometimes less and start to trade right away. Another advantage is that you will be able to focus on one or two pairs of currencies and really learn to trade them all right because you’ll get to know them so well. You don’t have to wonder which stock should I attending trade today.

Finally the opportunity exists for you to be trained by experts on all aspects of forex trading for a very reasonable price. You don’t need to try and reinvent the wheel. It’s all been done for you already. Researched, experimented, tried, tested and proven to work.