Forex trading today is well known as a lucrative way to make money online. It became an essential part of the investors portfolio as you can simply earn thousands of dollars in minutes by trading forex at home. For those who are new to trading, Forex stands for Foreign Exchange Market where it is all about buying and selling the different currencies of the world. Profits are made through the difference between the bid and ask price: you win when you buy low and sell high, while you lose when you buy high and sell low.

Forex is a true 24-hour market. Trading begins each day in Sydney and moves around the world to Tokyo, London and then to New York. Unlike any other financial market, investors can respond to fluctuations in the value of money caused by economic, social and political events as they happen, day or night. The main currencies that are traded today are US dollars, Australian dollars, Japanese yen, British pounds, Swiss francs, Canadian dollars and euros.

In the past, small speculators were not allowed to trade Forex freely like they are now. The minimum required trade sizes are large and the financial requirements for forex trading are strict. Only the big multinational cooperation and banks can fit into the business. In fact, the big international banks are still the main players in the foreign exchange market. Deutsche Bank is one of the leading foreign exchange traders; along with other major banks such as UBS, Citi Group, HSBC, Barclays, JP Morgan Chase, Coldman Sachs, ABN Amro, Morgan Stanley, and Merrill Lynch; These banks are said to be responsible for more than 70% of the transactions in the foreign exchange market. Forex trading is not open to the public until 1998, when the large interbank units are cut into smaller pieces and offered to individual traders.

Starting to trade Forex is simple, a funded Forex account and a computer connected to the Internet are more than enough to get started. However, starting to trade and earning on trades is different. Trading Forex is a high risk game and traders should always follow certain principles, listed below are some that you should do when trading the Forex market.

1. Educate yourself before trading in the Forex market

As in any trading market, developing your trading skills and knowledge is the first step you need to take. The Forex website http://www.golearnforex.net might be a good place to start for Forex beginners. To further your learning in Forex trading, seminars, workshops, video tutorials, online learning or even books are useful to help us learn from the professional. Learn how to implement technical charts in your trading; learn how to use indicators to determine the right time to enter/exit the market; refresh your experience trading with a demo account…all of this is effective in ensuring you get off to a smooth start and will definitely reduce your chances of losing money.

2. Have a business plan

A good trading plan is highly necessary no matter you are a beginner or an expert in Forex trading. The Forex market itself is just a vehicle, to go to your desired destination, which is to make a profit and achieve financial freedom, in our case, you need to drive your vehicle with maps and navigations. How much do you want to earn from trading? How much can you afford to lose if things go wrong? What is the amount of capital you are putting up? Answer the questions yourself when setting up your trading plan. If you fail to plan, you are in fact planning to fail.

3. Mature mindset and disciplined trading

Trading Forex with discipline is important. Success in forex trading cannot be achieved by just laying out the best trading plan. It also depends on the implementation of the business plan. Be disciplined, trade according to your plan and never trade on your emotion no matter if you are losing money or winning. Greed will prevent you from profiting at a predetermined level; while fear will prevent you from making the good prey in the market.

Without a doubt, Forex is becoming more and more popular. There are no restrictions in the FOREX market. No limited market access, no liquidity issues: after market hours, no commissions, low capital requirements and no restrictions on short selling. However, the risks in forex trading should not be taken for granted. Since you can always trade on margin, you could lose much more than you can afford if you don’t plan your investment wisely. Seminars, e-books, the Internet, papers, and video courses are all you need first before you get involved in the market.