What You Need to Know About Online Forex Currency Trading

The Internet has made it easier than ever for the average person to get involved in speculative forms of day trading, like Forex trading. Every year the attraction of online forex currency trading is fast increasing

In the past, Forex trades had to be carried out by calling up your broker's 'dealing desk'. Today, though, carrying out a trade is as simply as pointing and clicking from within your online trading account. Orders can be done within 1-2 seconds.

This is indeed a luxury but, as you may have guessed, there is both an upside and a downside to the technological ease of online forex currency trading.

One of the biggest problems is a phenomenon known as 'scalping'. Scalpers are traders who rely on the speed of electronic trading (and the ability to bypass the 'dealing desk') to 'scalp' Pips.

In other words, they trade currencies on the smallest fluctuations in exchange rate. A scalper might trade a pair when it moves from 1.3435 to 1.3436, for example.

There's technically nothing wrong with doing so, except that scalpers execute these types of trades hundreds of times daily. They may exit a trade before the broker even has time to deal with it, and this results in a loss...for the broker, that is.

Scalping is a risky strategy that is all to easy to perform online. So, the first thing you need to be sure of before you start Forex trading is that you know what you're doing. Scalping isn't something you want to do as a beginner, regardless of whether you're doing it intentionally or through sheer inexperience.


The second thing you'll want to do is develop a long-term investment strategy. Forex is fun to 'play' with, and online trading accounts make it easy to jump in the game just to try it out. It has almost become a fad.

However, what the sad statistics bear out is that over half of all new Forex traders lose their money within a year. The foreign exchange market is seeing a lot of hype right now, and too many people are signing on in the hopes of making a quick buck. Forex is simply not that easy, though, and it is certainly not a get rich quick scheme for the average person.


So, before you start online forex currency trading, make sure you take the time to educate yourself. There's plenty of free information online, as well as top-notch training courses provided by brokers and expert investors.

If you are pursuing an online forex trading career, here are some of the pointers that will keep you on the path of success. You can incorporate these pointers into your trading system.


Never add to a position that is losing. This is the main reason why small losses become larger ones that leads to traders who no longer trade.
Always be aware of the trends in the market. Base your trades on market information. This will help you prevent big losses on your investment.
Always be alert of the changes in the market as well. There are times when trading is not profitable. Anticipate every move in the market.
Trust your instincts. If you feel that you will be losing in a certain trade, do not make it. It is better to be stay out sometimes rather than lose money.
If everybody is now in, it is time for you to get out. You will not be able to pull some profit if the currency is overbought already. It is better that you exit that position and look for other trades.
Putting the necessary time up front into developing a long-range strategy, and educating yourself on the marketplace, will go a long way to assuring your success. In order to use your investment capital to the maximum, you should be wise enough to take advantage of online forex currency trading...