Forex trading or the buying and selling of foreign currencies with the aim of making a profit, is very much a business like any other: to operate well and make a profit you need the tools of the trade. Let us have a brief look at what you need to begin forex trading and where to get it.

First and foremost you need accurate and timely information. The shorter the time frame in which you trade, the more crucial it becomes to have up to date information at your fingertips. A medium-term trader might, for example, be happy with end-of-day prices; a day trader will need live prices.

Whatever time frame you choose, you need accurate currency prices. Most forex trading platforms like Financial Spreadoffer free live prices, so finding this information should not be much of a problem for most traders.

When trading the forex markets, you also need software that provides you with the ability to open and close trades, set ‘stop loss’ levels and ‘take profit’ levels and to change these levels when you need to.

Most good trading software packages offer traders a host of additional features, for example built-in charting facilities. You can normally choose a range of major or minor currency pairs you want and immediately access a graph showing its current and historical price. On the same graph you might be able to draw a whole range of so-called technical indicators to help you make sense of what is happening in the marketplace.

Probably the simplest technical indicator out there is the moving average. However simple it may be, it is still used by many traders to help them decide whether the price of a currency is going to move up or down.

A good charting package will provide you with the opportunity to draw various other technical indicators, such as the Ichimoku Kinko Hyo, Bollinger Bands, Trend Lines and many more.

If you are a novice forex trader, you should take advantage of all the free training you can get your hands on, in fact forex trading can be very volatile and might not be for you. Many online brokers provide free training for forex trading. You will learn the difference between technical analysis and fundamental analysis, how to use charting software and how to manage your money – something that is crucial for success in the world of trading.

While much of the training will attempt to introduce the reader to forex in a manner that is easy to understand, if you do come across material that you find unclear then don’t be afraid to register at a good forex forum and ask questions; you may be surprised how often experienced traders will respond to beginners. Be warned, however: no matter how experienced a forum member may appear, you should consider all user posts to be opinion only. Always follow up any responses with further research before taking user-posted content as fact.

Margined FX and financial spread betting involve a high degree of risk to your investment capital, they are geared products so you can lose more than the investment capital which you initially committed. When investing with these products, ensure you only invest using capital you can afford to lose; before trading make sure that you fully recognise the risks involved.

Please be aware, Financial Spread Betting and Margined FX may not be suited to your trading requirements. Where appropriate, obtain independent investment guidance.