Investors looking to enter the world of foreign exchange can find themselves frustrated and quickly spiraling downward, losing capital fast and optimism even faster. Investing inforexwhether in futures, options, or spot contractsoffers great opportunity, but it is a vastly different atmosphere than the equities market.
Even the most successful stock traders can fail miserably in forex by treating the markets similarly. Equity markets involve the transfer of ownership, while thecurrencymarket is run by pure speculation. But there are solutions to help investors get over the learning curve: trading courses.
As an individual trader, its never been easier to get access to forex markets from several online and mobile providers.
With easy access, beginners may find it in their best interest to read up on how the forex market works and to hone their skills and knowledge with a forex-specific trading course.
Courses are offered both online and in-person.
Keep a look out for the course providers reputation, feedback from past students, and if the course has professional accreditation or certification.
When it comes to forex trading courses, there are two main categories:
Online courses can be compared to distance learning in a college-level class. An instructor provides PowerPoint presentations, eBooks, trading simulations and so on. A student will move through the beginner, intermediate and advanced levels that most online courses offer. For atraderwith limited foreign exchange knowledge, a course like this can be invaluable. These courses can range from $50 to well into the hundreds of dollars.
[Note: InvestopediasForex Trading for Beginners Courseoffers an in-depth introduction to forex trading developed by John Jagerson, a CFA and CMT charter holder and founder of Learning Markets. With over five hours of on-demand video, exercises, and interactive content, youll learn how the forex market works, how to analyze currency pairs, how to build strategies, and much more. The self-paced online course includes lifetime access and a money-back guarantee.]
Individual training is much more specific, and it is advised that a trader have basicforex trainingbefore taking up this option. An assigned mentor, typically a successful trader, will go throughstrategiesandrisk managementwith the student but will spend the bulk of the time teaching through placing actual trades. Individual training runs between $1,000 and $10,000.
No matter which type of training a trader selects, there are several criteria to consider before signing up.
A simple Google search shows roughly two million results for forex trading courses. To narrow the search, focus on the courses that have solid reputations. There are many scams promising giantreturnsand instant profits (more on this later). Dont believe the hype. A solid training program wont promise anything but useful information and proven strategies.
The reputation of a course is best gauged by talking with other traders and participating in online forums. The more information you can gather from people who have taken these courses, the more confident you can be that you will make the right choice.
Good trading courses are certified through a regulatory body or financial institution. In the United States, the most popular regulatory boards that watch overforex brokersand certify courses are:
Not all trading course or system promoters are required to be members of the National Futures Association or registered with the CFTC, but most of the reputable ones are, and they adhere to these bodies code of ethics.
For those thinking globally, be aware that each country has its own regulatory boards, and international courses may be certified by different organizations.
Trading courses can require a solid commitment (if individual mentoring is involved) or can be as flexible as online podcast classes (for internet-based learning). Before choosing a course, carefully examine the time and cost commitments as they vary widely.
If you dont have several thousand dollars budgeted for one-on-one training, you are probably better off taking an online course. However, if you plan on quitting your job to trade full-time, it would be beneficial to seek professional adviceeven at the higher cost.
Make 400% returns in a day! . . . Guaranteed profits! . . . No way to lose!
These and other catchphrases litter the internet, promising the perfect trading course leading to success. While these sites may be tempting, beginningday tradersshould steer clear, because absolute financial guarantees in the world of foreign exchange just dont exist.
Unfortunately, the rise of online trading, electronic platforms, and open-access marketplaces have fueled a parallel rise in scams. The Commodity Futures Trading Commission (CFTC) has long been concerned about dubious courses designed to prey on the unsuspecting. The CFTC has witnessed increasing numbers, and growing complexity, of financial investment opportunities in recent years, including a sharp rise in foreign currency (forex) trading scams, it warned in a release, as far back as May 2008.
To ensure a trading course is honest, read its terms and conditions carefully, determine whether it promises anything unreasonable, and double-check its credentials and certification for authenticity. In particular, beware of sites that prominently display hypothetical returns, or that show actual returns without the stipulation to the effect that past performance is no guarantee of future results.
If you think youve been defrauded, contact the CFTC.TheCommodity Futures Modernization Actof 2000(CFMA) made clear that the CFTC has jurisdiction and authority to investigate and take legal action to close down a wide assortment of unregulated firms offering or selling foreign currency futures and options contracts to the general public.
While trading courses offer a structured way of learning foreign exchange, they arent the only option for a beginning trader.
Those who are talented self-learners can take advantage of free options online, such as trading books, free articles, professional strategies, andfundamental and technical analysis. Again, even though the information is free, make sure it is from a credible source that has no bias in how or where you trade.
This can be a difficult way to learn, as good information is scattered, but for a trader starting out on a tight budget, it can be well worth the time invested.
Before jumping in with the sharks, getting trading advice in the highlyvolatileforex marketplace should be a top priority. Success in dealing with stocks and bonds does not necessarily breed success in currency. Forex classes and trading courseseither through individual mentoring or online learningcan provide a trader with all the tools for a profitable experience.
Forex training is a guide for retail forex traders, offering them insight into successful strategies, signals and systems.
Authorized Forex Dealer Definition and Regulation
An authorized forex dealer is a regulated company to transact forex through. In the United States, the dealers are overseen by the National Futures Association.
A forex broker is a service firm that offers clients the ability to trade currencies, whether for speculating or hedging or other purposes.
Retail Foreign Exchange Dealer (RFED) Definition
A retail foreign exchange dealer (RFED) acts as the counterparty to an off-exchange, over-the-counter foreign currency transaction.
E-Micro Forex Futures are a type of currency contract, traded on CME Globex. They are unique in that theyre one-tenth the size of standard forex futures.
A futures exchange is a central marketplace, physical or electronic, where futures contracts and options on futures contracts are traded.
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