What should beginner forex investors invest in? A newbie’s guidelines

With the global economic landscape in a constant state of unrest, experienced traders often turn to safe-haven assets like gold to mitigate risks and preserve wealth during times of uncertainty.

For beginner investors, gold represents a reliable entry point into the forex market due to its historically stable value and the perception of it as a hedge against inflation and geopolitical turmoil.

“It is important for investors to position themselves for a healthy correction and diversify their portfolios. Gold has always been used as a safe haven and will always remain,” said Tariq Qaqish, CEO of Salt Fund Placement, to Gulf News when asked about his opinion on trading gold.

“With skyrocketing US debt of $34.7 trillion as we speak, any shakedown of the principles will create turbulence in the FX market [in the US]. In such times, gold emerges as a crucial asset for investors seeking to hedge their portfolios.”

(On a side note, what you need to know as a newbie forex trader is that any impact in a dominant market like the US are more or less mirrored worldwide and impacts investor sentiments everywhere.)

As Qaqish mentioned, having a diverse investment portfolio is crucial to mitigate risks when it comes to trading on the foreign exchange market. Instead of exploiting all resources, in this case money, in one category, its best to diversify to experience the lowest risk and highest returns possible.

Similarly, oil presents an attractive option for novice traders seeking exposure to commodity markets. As one of the world's most heavily traded commodities, oil exhibits relatively predictable price movements influenced by a combination of supply and demand dynamics, geopolitical tensions, and macroeconomic factors.

In addition to commodities, currency pairs such as GBP/USD (British Pound/US Dollar) and EUR/USD (Euro/US Dollar) offer beginner traders plenty of opportunities for profit generation. These currency pairs are among the most actively traded in the forex market, characterised by high liquidity and relatively stable price movements.

Trading currency pairs like GBP/USD and EUR/USD allow beginners to capitalise on the economic policies and macroeconomic indicators of two of the world's largest economies — the US and the European Union. By staying informed about interest rate decisions, employment reports, and geopolitical developments, traders can develop a comprehensive understanding of the factors driving these currency pairs' price movements.

Despite the allure of high-risk, high-reward trading strategies, experts caution beginner investors against overextending themselves in pursuit of short-term gains. Instead, they advocate for a disciplined approach centred on risk management, proper education, and a diversified trading portfolio.

In an industry notorious for its complexity and volatility, the guidance to focus on stable assets like gold, oil, and major currency pairs offers a beacon of clarity for beginner investors embarking on their forex trading journey.

By adhering to sound trading principles and leveraging the expertise of professionals, traders can navigate the intricacies of the forex market with confidence and competence, ultimately realizing their financial goals and aspirations.

To know more, here are some more detailed guides on how you can go about trading currencies, gold, and oil.