Forex trading can be a highly lucrative career path or way to make money quickly but it can be difficult to find your way around at first. There’s a relatively steep learning curve involved if you want to get into forex trading as well as a lot of decisions that carry a lot of weight.
For instance, you have to decide on a reliable broker, which currency pairs you want to trade, and how much you want to deposit. Through this article, we’ll help you make a checklist for starting your forex trading career right.
How to Get into Forex Trading
1. Decide on your currency pairs.
Your first decision as a trader is what pairs you want to trade.
This decision influences the broker and market you choose, as not all brokers offer the same currency pairs. This decision should be based on accessibility and profitability.
2. Decide how much you want to deposit.
What will help determine your broker and account is the amount of money you’re willing to deposit. Certain accounts require higher minimum deposits, while others don’t.
Don’t pick an account or firm that requires a minimum deposit that’s outside your budget. See this guide for more details on this matter.
3. Research brokers.
While they’re a lot of brokers from which to choose, they’re not all created equal.
Do your research before settling on a firm if you want to know how to get into forex trading this year.
You don’t want to get scammed and not be able to access your money or, worse, get in trouble legally. Verify that it’s a quality company before you sign anything.
Try out the demo account to get a feel for their platform, risk-free.
4. Pick the ideal broker.
Once you’ve done your research and have developed a list of legitimate brokers from which to choose, it’s time to pick the right broker for you. This decision should be based on how close they match your requirements and expectations.
The broker you go with should have mobile accessibility, a low deposit, a user-friendly platform, and a demo account to let you get used to it.
5. Pick the account that’s right for you.
The last step after choosing your ideal broker is picking the perfect account for you out of the many available.
Your account choice should be based on their minimum deposit requirement, what sort of benefits they offer, and the quality of those benefits. You should also make sure that the account fits all your requirements. Keep in mind there are trading fees involved.
6. Know how the China-US Trade War affects you.
Trade wars have been around from way back as history can take you. In a simple definition, a trade war occurs erupts when one country decides to impose trade bans or imposes tariffs on certain imports from another country.
In retaliation, the other country also imposes bans or high tariffs on goods as well. Such trade wars hurt international trade and while this move may have good motives such as protecting the domestic industry in a bid to create jobs, the effects may be negative in the long run.
Within a short time, domestic producers will sell their products at a reduced price, thus receiving increased orders from clients. This will, in turn, create more jobs. However, the long shot will cost these same jobs created during the initial stages of a trade war.
China-US Trade War
This is a perfect example of an ongoing trade war which started way before President Trump took office when he questioned China’s trades in 2016.
The following year, the US cracked down on Chinese trading policies which resulted in imposed tariffs worth billions of dollars.
China didn’t take this lying down and retaliated with its own tariffs. The hostilities went on for months before the two parties agreed to stop implementation of new tariffs for 3 months in December.
At the moment, Chinese goods worth over $250bn is under new tariffs imposed in three rounds. These duties affect railway equipment, handbags, consumer and industrial items among others and range between 10 and 25%.
That’s not all, President Trump also threatened to impose another round of tariffs on goods totaling $267bn.
In addition, the US went ahead to impose tariffs on worldwide importation of washing machines and steel which directly affect China’s products.
Soon after, Beijing responded with tariffs which affected US goods worth $110bn and on top of it blamed the US for starting the biggest trade war in economic history.
In its tariffs, China focused on chemicals, medical equipment, and coal with similar duties as those imposed by the US – 5 to 25%.
In addition, China uniquely identified products produced by Republican districts. This includes soybeans, which they can get elsewhere.
How It Affects the Common Man
With tariffs imposed on steel importation, aluminum and steel process have soared, thus increasing the prices of consumer goods. This is then transferred to the consumer since the cost of production increases.
While this may promote local purchases, the long-haul effects presented by this trade war are devastating both to the local and global economy.
According to the Alliance of Automobile Manufacturers, the rise in steel prices translates to an increase in car prices for consumers. This means a reduction in sales and profits and thus layoffs will be inevitable.
Not only will does the trade war affect local and global economies but also rocks investors in the stock markets.
In fact, the IMF has issued a warning saying that a full-blown trade war could rattle the global economy but it’ll be interesting to see which direction this particular trade war will take.
Where can you find more information?
So, we’ve given you the steps on how to get into forex trading, but you might want a little more information before jumping in.
If you click here, you can find a lot of valuable information on trading and particular foreign trading markets, so you can make a more informed decision.
Forex trading can be highly lucrative, but it’s also a fair bit difficult to figure out when you’re just getting started.
If you follow this basic checklist we’ve put together, it’ll be easier for you to navigate through all the information, options, and opportunities forex trading has to offer.