How to Make Money Trading Forex Online for Free

Forex (or “foreign exchange” trading) is considered by many as the world’s smartest and most lucrative market to trade. As the world’s major currency trading platform, FXCM (formerly FXCHF) notes, Forex is “widely considered to be the most liquid and sophisticated market in the world, with exceptional trading volumes and wide geographical coverage.”

Withdrawals and deposits are generally available all hours, so you can place orders whenever you want. Plus, the 24-hour trading coverage provided by dedicated specialists is always available to assist you.

What is Forex?

Practically anyone can become a Forex trader, as long as they have the money and desire to lose. Essentially, Forex is the currency market, where you can buy and sell virtually all world currencies, including USD, Euro and other major fiat currencies, as well as gold and other commodities.

Why should you try trading Forex?

The main reason you should try Forex is because it is one of the most lucrative markets out there. The second you become a proficient Forex trader, you will be able to generate significant earnings, even if you make just a few trades per day. Additionally, the world’s major currency trading platforms, such as FXCM, consider Forex to be one of the safest and most reliable markets available. Furthermore, Forex offers some of the simplest entry requirements out there – all you need is enough money to cover your initial equity stake in the company, plus a tiny margin to trade with.

How to Make Money Trading Forex Online for Free

Now that you’re interested in trying out Forex, how can you make money trading this market? There are several different ways, but perhaps the most effective one is to do it for free. As long as you have the desire and the know-how, you can gain some real experience and build up a small portfolio to see how the market works and whether or not you enjoy it. Then, when you are ready, you can decide whether or not you want to continue playing in the market. However, as long as you continue enjoying yourself, there is no reason not to continue playing. In this article, we will discuss some of the ways you can make money as a casual Forex trader, as well as some of the things you need to keep in mind.

The Basics Of Forex Trading

Before we get started investing in cryptocurrencies or anything else for that matter, it is important that you become familiar with a few of the basics of Forex trading. These are some of the most important things you should know before you begin investing in any way, shape, or form:

  • The most important thing to keep in mind when trading Forex is: the market always wins
  • When trading any market, each individual trade carries a certain amount of risk
  • The higher the leverage (i.e., the amount of money you are wagering per transaction), the greater the risk
  • Risk can be reduced by using proper money management techniques
  • The second most important thing to keep in mind when trading Forex is: keep your emotions in check
  • When you lose money in Forex, you are likely to become disappointed, especially if you have invested a large sum of money. You must learn to remain calm and collected and understand that losing money is part of the game
  • It is always better to stay away from markets when they are falling, as they are most likely to continue falling
  • Learn how to read market reports and follow important news stories about the market so that you can stay informed of any important changes that might affect your trading

Register With A Leading Forex Broker

One of the simplest ways to make money as a casual Forex trader is to register with a leading Forex brokerage. By doing so, you will be able to open a demo account, which will allow you to trade for free (or almost for free). Through these accounts, you can gain valuable experience, build a portfolio, and track your investments. When you are ready to begin making real money, simply transfer your funds to a registered account. Alternatively, if you choose to keep your account with the demo provider, you can use their learning platform to set up automatic buy and sell orders for you.

Try Out A Top-Notch Algorithm

Depending on your experience, you may decide that you want to give algorithmic trading a try. Algorithmic trading is a form of computer-based (i.e., automated) trading in which sophisticated computer programs are used to analyze buying and selling trends, analyze past market performance, and perform the same functions as professional Forex traders. There are various top-notch algoritms available that can be used to take advantage of every trend and pattern that comes up in the market. Using these algorithms can significantly reduce your risk when trading, as your bet size (i.e., the amount you are wagering per trade) is predetermined. Plus, since your trades are guided by a set of computer-generated instructions, learning curve is practically eliminated – setting up the algorithm is all you need to do to begin making money. But if you aren’t comfortable using computers for financial decisions, then don’t worry – you don’t need to. Many brokers offer traditional Forex trading as well, so you can choose the best option for you.

Diversify Your Investment Portfolio

An extremely important thing to do when trading is to diversify your investment portfolio. This is because a major risk that you take when trading is that one or more of your investments might lose value. When this happens, it is likely that your overall portfolio will take a significant hit, and this is something you want to avoid. When investing in stocks, you should make sure that you have a broad range of stocks in your portfolio. This way, if one company performs exceptionally well while the rest languish, you will still come out ahead. Even if you stake out a large position in one stock, you might lose a significant amount of money as the market fluctuates. By spreading your investment portfolio out among different industries and market segments, you can minimize the chance of losing a large amount of money from one stock

Start Small

While it is certainly beneficial to trade with a considerable amount of money to minimize your risk, you should not rush into investing large sums of money in one or two stocks. Instead, you should start small and work your way up. When you begin making money, simply keep it in a low-risk investment (i.e., something that doesn’t plummet in value as soon as you put money in it). As you gain experience and become more confident in your abilities as a trader, you can gradually increase your stake, until you are taking significant positions in a few highly-profitable stocks.

Monitor The News

Keeping abreast of current affairs is extremely important when trading. In particular, you should focus on international news stories that have a direct impact on the markets. Additionally, you should pay close attention to political developments that could potentially affect one of the major currencies in trade (i.e., USD, EUR, or CHF). There is a wealth of information online, and you can use various newswires, like Business Day, Bloomberg, and Reuters, to keep track of important stories that might affect the markets. When you are aware of a major global event that could have an impact on the markets, you can use this information to your advantage by placing an order in advance of the news reporting, which will likely result in a profit. In the long term, the potential for significant growth is very high in the foreign exchange market, and anyone who is looking to make money in the coming years should consider investing in this market. The more you know, the better your chances of successful investment.

Stay Organized

Keeping organized is extremely important when trading. You should create a systematic plan, and using an Excel or similar spreadsheet, you can break down your investing strategy into specific steps. This will help you stay focused and ensure that you follow up on every aspect of your plan. Additionally, you should have a backup plan in case something goes wrong. Having a fallback position, either in a different currency or an alternative investment, will help you avoid extreme market swings that could potentially wipe out all of your profits. Finally, you should always try to be as efficient as possible, which will help you minimize the amount of money you lose.