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Is forex difficult to pick up as a beginner?

26th July 2022 Print

These are uncertain economic times we live in. And with the cost of living in the UK on the rise, the average man or woman is finding it increasingly difficult to cut their cloth accordingly and make ends meet. If you have a head for numbers and you’re looking for ways to supplement your income, forex trading could be an avenue worth exploring. 

But what exactly is it, what makes it an appealing option to many and how difficult is it to get started? Read on to find out more. 

What is forex trading? 

The basic idea of foreign currency exchange trading – also known as forex trading or FX trading – is to exchange one currency into another. These currencies are traded in pairs – for example the British pound against the US dollar (commonly written as GBP/USD or vice-versa). The forex markets offer high levels of liquidity and operate on a global scale, with traders able to get online and execute deals all over the world, from San Francisco to Sydney and everywhere in between. 

Why has forex trading become increasingly popular? 

Many see forex trading as an extremely complex practice, and one that requires an economics degree to have any hope of understanding. But the reality is quite different and the barrier to entry is low, with plenty of online resources aimed at beginners. 

And because of the various time zones across which the markets operate, it’s something that you can fit in around the rest of your schedule, so it doesn’t have to take over your life. Furthermore, it does present opportunities to make a profit – although these must always be balanced out against the ever-present risk of losing money. 

Is it difficult to get started? 

Forex trading is certainly not something you should enter into on a whim. Without at least a fundamental understanding of how it works and the factors that determine the movements in the market, you could stand to lose a lot of money quickly. Instead, you should take the time to do your research into these matters so that you are well prepared when the time comes to start executing trades. 

There are plenty of guides, explainers and how-tos available online so that you can learn quickly. Meanwhile, a lot of forex brokers offer free demo accounts before you sign up. These allow you to get a feel for the real-life trading experience, without exposing yourself to potential financial losses before you are ready.