Intro
Forex is one of the financial markets where you can invest your own capital for its growth. You can invest money in a PAMM account and entrust it to another trader, or you can trade on your own. For this, you need to have specific knowledge, which you can get in different ways. In this article, we will look at some of the ways to study Forex in Latin America.
What is Forex Trading and How Does It Work in Latin America?
The Forex market is a foreign currency market. Traders trade currency, and the currency is traded in pairs, so when traders choose a currency pair, they exchange one currency for another. Traders make money from currency fluctuations. They buy the currency when it starts to rise and sell when it falls. In order to determine the moments of entry and exit to the market, you need to know how the indicators work. Therefore, it is necessary to acquire relevant knowledge.
Market fluctuations depend on a certain list of factors:
- Interest rate. When the central bank raises the interest rate, the percentage of payments for deposits increases, which leads to an investment inflow into the country, which in turn leads to a strengthening of the national currency.
- Prices on the resource market. Countries trade their own valuable resources, which can be coal, wood, oil, etc. When the price of a certain natural resource falls, the income of the country that trades this resource decreases accordingly. A decrease in income affects the weakening of the national currency.
- Export. Each country produces products not only for the domestic market but also for the foreign market. We can also include a foreign policy in this factor because if they do not want to cooperate with a country due to a series of certain actions, this negatively affects its national currency. The volume of exports affects the volume of inflow of money into the country, i.e., the increase in the volume of exports strengthens the national currency.
- Inflation rate. An increase in the inflation rate means a decrease in the products you could buy for the same amount of money. So it reduces the exchange rate.
- Activities of financial organizations. When the rate of a certain currency begins to fall, large financial organizations, in order to avoid losses, begin to sell this currency, which further accelerates the fall in its rate.
In order to predict the movement of the exchange rate, you need to know what to rely on, and this is exactly why you need to study.
Ways to learn Forex trading basics In Latin America
You can choose both paid and free ways of obtaining knowledge to study Forex. You can use paid or free forex courses, watch educational videos on YouTube and read materials on related sites. Let's consider the advantages and disadvantages of the above ways.
Learn on free courses
On the Internet, you can find a huge number of free Forex courses. The biggest advantage, of course, is that they are free, so even if the course is not useful enough for you, the only thing you will spend is your time. Also, the course offers you a curriculum, meaning you have a structured study plan, which is really helpful when you're new and don't know where to start. A good course for a beginner should contain a wide range of information. In order for a beginner to understand how the market works, there should be topics such as fundamental and technical market analysis, technical indicators, leverage, trading platforms, order types, trading strategies, and risk management.
When taking a free course, you decide for yourself what period of time you are ready to take it, and you will not have a clear schedule, so you will need to create it yourself. Free courses do not offer you mentorship, so you have to figure out all the questions yourself.
Learn on paid courses
Unlike free courses, paid courses may have a schedule or a deadline by which you must complete the course in order to be able to contact a mentor. Mentoring can be really useful because, just like when learning any discipline, when learning Forex you will have questions and, accordingly, explanations from the mentor.
The selection of paid Forex courses is wider than the selection of free courses, so you will definitely be able to find the one that suits you. But you will need to be careful because for a paid Forex course you will spend not only your time but also money. Therefore, we recommend that you study in detail the reviews of the courses on the platforms that offer these courses, as well as on the thematic forums.
Learn with youtube channels and Forex websites
Another way to learn Forex in Latin America is to learn Forex through YouTube channels and websites. The main advantage of studying in this way is that you can learn in detail about the smallest topics and nuances that interest you. YouTube is a platform on which there are over hundreds of thousands of videos about Forex. On popular channels, you can find thematic playlists, such as playlists for beginners, about technical indicators, trading strategies, and the like. You can find answers to almost all your questions on thematic sites. You can get all this knowledge for free. It does not require any resources from you except time.
The disadvantage of using Forex sites is that you will have to find topics to study on your own, you will not have any plan, and therefore it will be very easy for you to miss something important.
Then we can recommend using YouTube and thematic sites as an additional source of information, for example, in combination with free courses.
Using a Micro Forex Account to learn Trading in Latin America
A micro Forex account is an account with a minimum deposit, usually only a few dollars.
A micro account differs from a demo account because with a micro account, you really enter the market and therefore have the opportunity to analyze and gain experience from real market conditions. Trading with a micro account can teach you how to manage risk and how to allocate your capital between trades. You will also be able to better understand market mechanisms, how to place orders, how leverage works, and the like.
How to Place a Forex Order
There are different types of orders, a market order is an order that is executed instantly at the current price of an asset, but you can use a pending order. Pending order means that you can define the conditions under which your order should become marketable and therefore executed.
Stop order
A stop order can help you avoid losses because you can determine the price at which the asset you own will be sold. If the price of the asset you own starts to fall, you can determine the critical price at which your sell order will become marketable.
Limit order
A limit order means that you specify the price at which you want to buy or sell a particular asset. The sale price is determined as higher than the market price, and the purchase price is correspondingly lower than the market price.
FAQs:
- What is stop loss in Forex trading?
- What should you study in college to learn Forex trading?
- How much money do you need to start Forex Trading in Latin America?
- How long does it take to learn Forex Trading in Latin America?
Stop loss is a type of pending order that can help the trader avoid costs. The trader determines the asset's price (in the case of the price falling), and after reaching one, the sell orders become market orders.
You don't have to go to college to learn how to trade Forex, but if you study finance, business, or statistics in college, it can help you in the future.
You don't need a lot of capital to start trading on the Forex market in Latin America, $100 will be enough. However, you can open an account with 10 dollars.
You can learn the basics of the Forex market in a few weeks if you spend enough time studying and doing it methodically, but you will also gain knowledge as you trade.