Before you try your hand at Forex trading, it’s important that you first understand what you’re getting into. I’ve lost count of the number of times I’ve met amateur traders who can’t even calculate the value of one ‘pip’… it’s no wonder there are so many losing traders in the market!
Do You Know What A ‘Pip’ Is?
The first step to understanding Forex trading is to know what a ‘pip’ is. Can you calculate the pip value in U.S. dollars for the EUR/USD currency pair? What about the EUR/JPY pair? If you can’t, it’s a good idea to learn more about the basics first.
Do You Fully Understand The Costs Of Trading?
Many people are fooled into thinking that Forex trading does not bear transaction costs. Even though most Forex brokers (or dealers) do not charge commissions from you, they will actually still charge you money whenever you trade with them. This cost of transaction is called the ‘bid/ask spread’. This spread can cost as much as $20 to $80 per trade that you make. If you’re serious about Forex trading, you must understand all the costs involved.
Where Can I Learn More About The Basics?
Forex trading basics are easy to pick up these days. You can find a variety of Forex trading books in almost any bookstore you come across. You can also find lots of freely-available information on the internet. However, be careful when choosing your online learning sources… there are many Forex websites that provide misleading information that could cause you to make bad trading decisions.
Don’t be afraid to invest in your trading education, the rewards will be more than worth it!
To learn more, download my free 26-page guide here:
"Forex Trading Traps!"
Harold Hsu is the owner of http://ForexSystemProfits.com where he provides premium Forex trading information and resources.
