Are you looking at getting into online forex trading but don’t know what to do at first? The forex market is the biggest financial market in the world, and more than $6 trillion is traded every single day. 

For beginners, this can be a daunting prospect, because it is hard to know what to prioritize when you want to get started.

Online forex trading guide

But becoming familiar with a couple of key trends, and finding out what to look at and what to look out for can be enough to provide you with a solid starting point. 

This is why this guide will provide the information you need to know about the top online forex trading trends you need to know, including the top currency pairs, what really makes the market tick (and it’s not just your economy), and the best forex trading practices that can really make a difference.

By the end of this post, you’ll be ready to make your decision.

Market Update – Online Forex Trading

As of September 2024, the forex market is largely still dictated by global economic policy and big geopolitical events.

One of the big stories this year has been the divergence of monetary policy between the US Federal Reserve and the European Central Bank (ECB). 

According to Reuters, USD-funded interest rate hikes by the Fed have bolstered the greenback, including on pairs like EUR/USD, which tend to become more volatile. 

By contrast, the ECB has been more cautious. And because of political instability and double-digit inflation, emerging markets such as the Turkish lira have become more erratic too. 

These examples also remind forex traders that central bank decisions, as well as global geopolitics, can move market prices.

Moreover, politics across the planet has led to extreme volatility, as with the ongoing war in Ukraine. 

This has caused serious headwinds against currencies such as the euro (with the corresponding increases in oil prices as a result of the conflict), while the US dollar was put into a safe-haven position, which has seen it rise in value against other currencies. 

Online Forex Trading – Risk and Reward

Travellers planning to use dollars or euros while abroad should check the forex market daily to find the most economical time to complete the purchases, especially if any political situations arise that could rapidly alter their value.

For traders on the forex market itself, it also presents a massive opportunity, yet one that comes with a fair amount of risk.

Step 1: Understanding Currency Pairs

One can buy or sell an online forex currency relative to another in online forex trading.

A quote for a forex pair will consist of a base currency and quote currency.

The most traded pairs can be considered ‘majors’: AUD/USD, CHF/JPY, EUR/AUD, EUR/CAD, EUR/CHF, EUR/GBP, EUR/JPY, EUR/USD, GBP/AUD, GBP/CAD, GBP/CHF, GBP/JPY, GBP/USD and USD/CAD.

 – EUR/USD (Euro/US Dollar): The most liquid currency pair out there.

 – USD/JPY (US Dollar/Japanese Yen): This one has the highest correlation to interest rate differentials in Japan versus the US.

 – GBP/USD (British Pound/US Dollar): Sensitive to politics and UK economic data but mainly to UK politics such as progress towards Brexit.

 – USD/CHF (US Dollar/Swiss Franc): The US dollar and Swiss franc are often referred to as safe-haven pairs and may act similarly during times of global economic tension.

– Implies that there is some circular reasoning when I say that the history of gold mirrors the history of the US dollar There’s also a tendency to forget the bigger picture. 

Here’s an excerpt from our New Zealand dollar guide: ‘In New Zealand, like Australia, commodity prices have a significant impact, particularly with regards to dairy and meat demand.’

It’s not just farmers who are affected, but the Australian dollar, the Canadian dollar, the Norwegian krone, the Chilean peso, and especially, the Russian ruble — countries rich in natural resources. 

The US dollar also has a strong correlation with global commodity prices, particularly metals and energy prices, as these are all priced in dollars. 

We can go down this rabbit hole all day: oil fell because of the Republican Senate candidate’s victory in Alabama.

Now let’s look at the AUD/USD pair, which is a highly commodity-dependent pairing, where the dominant effect is the global commodity price picture, particularly metal and energy prices.

 The reason these pairs are great for beginners is that they have high liquidity, and you can find plenty of analysis out there, which makes it easier to follow a trend and predict the next direction.

Step 2: Recognising Market Trends

Knowing when to recognize and maximize the value of online forex trading trends is the key to success. Vital trends to consider include: 

 – Inflation: In fact, this year, developments in inflation have been a big theme, including in Turkey, where inflation has rocketed, leading to a drastic depreciation of the lira. The impact is rippleing across a range of currencies.

 – Interest Rate Decisions: The Federal Reserve and the European Central Bank, among other central banks, use interest rates to control inflation and economic stability.

In 2024, the Fed has raised rates aggressively to combat rising inflation, driving the dollar up sharply against other major currencies.

 – Global Politics: Big political events are the driving factor behind swings in currencies. The conflict in Ukraine has lately caused huge fluctuations in the euro, while the looming US presidential election is already spooking moves in USD pairs.   

Keeping an eye on these trends allows you to make predictions regarding the market, so you can decide when to enter and exit the market online for forex trading. 

Step 3: Choose Your Trading Platform – Why Finxo Capital?

When you are about to start online forex trading, your platform should be the best because you are starting as a beginner.

Finxo Capital is a platform that is safe and user-friendly, where you can start and do your online forex trading without any difficulties.

 – Beginner-friendly interface: It was designed keeping first-time traders in mind, hence you would not get stuck up with the complexities of the application. The interface is quite user-friendly and one can easily execute a trade with just a single click.

 – Live market data: Be the first among your competitors to receive the daily news, trends, and price movements in real-time and be the first to make decisions!

 – Demo accounts: Become familiar with the platform and make trades on virtual money without putting your own money at risk to gain confidence.

 At Finxo Capital, you get better after-sales support, which makes certain that you get all the support required to ensure success in online forex trading.

Step 4: Start with a Small Budget

One of the most important rules in forex trading online is to begin with a low budget.

Do not jump into the market with a bankroll of thousands of dollars. Start by making small investments, and then increase your capital as your skills improve. 

The forex market is volatile, and big price swings in a short period of time can result in profit or loss.

When you start with a low budget, your initial risk is kept low while you learn the ropes.

Step 5: Master Technical and Fundamental Analysis

 In order to be successful with online forex trading, you need to know technical and fundamental analysis:

 1) Technical Analysis: all the charts and trendlines, which involve using technical indicators to predict future price movements;

Tools include: 

Moving Averages: Help to smooth out price data to identify long-term trends.

Relative Strength Index (RSI): If a currency pair is considered overbought or oversold, this technical indicator calculates the probability of a reversal.

Fibonacci Retracement – one of several ‘technical analysis’ tools used to predict when a currency pair’s price will ‘retrace’ (rise if previously falling, fall if previously rising) to one or more of five ‘support’ and ‘resistance’ levels.

 2. Fundamental Analysis: This is an analysis of economic data and news events to see how the economic situation will translate into currency moves. The key factors here are: 

   – GDP Reports: Strong economic growth typically strengthens a country’s currency.

   – Interest Rates: Higher interest rates usually lead to a stronger currency.

   – Inflation Rates: Rising inflation can devalue a currency, as seen recently in Turkey.

Both methods are essential for making informed decisions in online forex trading.

Step 6: Best Trading Practices and Risks Involved

 In forex trading online, one can mitigate the risk by adhering to the best practices such as:

 1. Keep Up on Global News: Forex is highly sensitive to global events. Make sure to read a well-reputed source such as Reuters to stay on top of major political and economic news. These include decisions by central banks, inflation figures released, and large geopolitical events, for example.

 2. Employ Stop-Loss Orders: Protect your trade by employing stop-loss orders that automatically close the trade when a certain point on the chart is reached.

Doing this will limit your exposure and protect you from significant losses in a volatile market.

 3. Avoid Leverage: Leverage can supercharge your earnings but amplify your losses as well. For a beginner, leverage should be used in a very conservative manner. Finxo Capital provides exceptional risk management to help you manage your exposure.

 4. Diversification: Avoid putting all your money in one currency pair. Instead, diversify your trades across multiple pairs so you won’t lose it all at once.

¿Por qué operar con Finxo Capital?

Finxo Capital is a great place for starters due to its transparent fee structure, educational resources, and the use of stop-loss orders to minimize risks.

Thus, the overall trading experience can be optimized by taking advantage of its intuitive platform, competitive fees, and educational resources. 

In other words, Finxo Capital is a great place to start your online forex trading journey.

Step 7: Follow Market Sentiment

Market sentiment refers to the mood of traders towards a particular currency pair. If most traders think a currency will appreciate, a positive sentiment can fuel further gains in a currency pair’s price. If the sentiment is negative, the price may slide. 

Sentiment analysis tools such as the ones available from Finxo Capital can tell you how other traders feel about a currency, so you can adjust your strategy accordingly.

Step 8: Take Advantage of Market Volatility

 The forex market is highly volatile, offering both threats and opportunities, especially following the outbreak of the conflict in Ukraine that created heightened volatility in the euro and other European currencies.

Understanding how to trade in such volatile conditions offers chances to profit, and learning how to do this is part of how you can learn to do online forex trade.

Step 9: Learn from Your Mistakes

Trading won’t make you an expert overnight. The most successful traders are constantly reviewing trades to see where they went wrong and how they can improve, from getting an edge in timing to detecting trends earlier on. 

Without admitting mistakes, learning from them, and correcting them, a professional in online forex trading will never achieve success.

Step 10: Stay Patient and Consistent

Online forex trading can be a frustrating process. When you first start, it’s tempting to keep flipping in and out of positions, trying to profit off every swing. But the best traders measure success in months and years, not days. 

True, you might earn a quick buck by making a lucky trade, but skilled traders trust their strategies and ignore emotions.

By remaining patient and disciplined, you’ll gradually improve your skills, and begin to see the rewards when online forex trading.

While forex trading online might seem intimidating, these steps will put you in a better place to enter the market.

Starting with an explanation of currency pairs and walking through how to master market trends, a discussion of Finxo Capital as a trading platform, and finally tips on how to take your first steps toward making your own trades, this guide helps you get started on the right foot. Are you ready to get started?

Let Finxo Capital guide you through the exciting world of forex trading.