Forex Guide - An Introduction to Forex Trading

Welcome to this site! This site was designed to provide information for traders and investors who want to learn about the forex market and what it can offer. To help you navigate the site better, choose from one of the following three categories below as to what level of knowledge and experience you have of the forex market:

See also Forex Broker Guide

Choose A Category:

  1. I Have No Experience of Trading:

    If you have absolutely no experience of the forex market or trading, there are two options:
  2. I am a Self-Trader:

    If you have some knowledge or experience of the forex market, there are three options:
  3. I am a Professional Trader, Hedge Fund, Broker or Investor:

    If you are a professional trader, hedge fund, broker or investor, you may be interested in advanced forex software, managed accounts, custom programming and the like. All other products and services can be found in the menu to the left.

Getting Started: Self-Traders

Your first step should be to educate yourself about the market and trading in general. Read books, take a course, learn strategies, and practice, practice, practice! Most brokers offer demo accounts which will allow you to practice trading without risking real money. The downside of that is that you often don't trade the same way that you would if you were trading with real cash! For a general background on the foreign exchange market, see the Forex Market Snapshot.

Trading Tips

Rule #1. Learn or Develop a Profitable Trading Strategy
This is rule #1. Without it, you are not going to go anywhere! For strategies and system ideas, please visit forex ebooks, forex courses, forex books and manual forex systems sections.

Rule #2. Use Low Leverage
Using excessive leverage may be the most common reason why many traders blow out their accounts. A good rule of thumb is not to leverage your account more than ten times its value. For example, if you had a trading account of $1,000, you would not open trades worth more than $10,000. For a more detailed explanation of leverage, see forex basics.

Rule #3. Only Use Risk Capital
What this means is that you should only use money that if lost, would not affect your lifestyle in any way. Though it has been said many times before, this is a simple rule that can avoid any harsh lessons being learned further down the track if learnt now.

Choosing a Broker

Surprisingly, this may be one of the most important decisions you make outside of developing or learning a profitable strategy and not over-leveraging your account. You need to find an ethical broker who will not play tricks with their pricing and stop you out of your trades in order to fatten their wallet. This is typical behaviour of unethical market makers who have an economic incentive for you to lose when they are on the opposite side of your trade. Not all market makers behave in this way, so it is a good idea to do your research on all market makers and brokers before opening an account with them. Visit the Forex Broker Ratings section of this site for some useful assistance!

Managed & Semi-Managed Investments

Some market participants may prefer not to take the self-trading route but instead opt for a managed forex account, automated trading system, auto-trading platform or trading signal provider. Each one of these approaches doesn't require much input from you, as most of the decision making process of when to open and close trades is left up to others. Your decision making rests with choosing a system, adjusting your leverage, placing trades, or determining which trading signals to take. If you choose to open a managed account, find out how much leverage they use when they trade your account. Excessive leverage could lead to large drawdowns that could wipe out your account.

If you decide to use an automated system, autotrading platform or forex trading signal provider where you set the level of leverage, be sure to keep it to a manageable level. See rule #2 above for more information.

It is a good idea to diversify your investments amongst several managed account providers and/or systems to even out your returns - When one account is up, the other may be down, and vice versa.

There are of course many other factors and questions to consider when opening a managed forex account or choosing an automated system or signal provider, however, these ones should hopefully help you avoid any unforeseen circumstances!

With those ideas in mind, this site has been arranged in a way to take you through many aspects of the retail spot forex market so you can learn at your own pace and visit the sections that interest you most.

Site Structure

This site is categorised into five main sections:

Good Luck and Happy Trading!

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Forex Guide