How to start trading forex as a beginner

Telegraph Money explains the lucrative investment technique akin to gambling

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Foreign exchange trading, often referred to as forex or FX trading, is the buying and selling of currencies by investors with the aim of making a profit from international currency movements.
FX is not only the largest market in the world – with an average daily trading volume of over $5 trillion (£4 trillion) – it is also the most actively traded and it never closes.
It is essentially a round-the-clock market with four main trading hubs: London, New York, Tokyo and Sydney. International currency is also traded in Zurich, Frankfurt, Hong Kong, Singapore and Paris.
The US dollar is considered the most popular currency in the world. This kind of investing can be lucrative but it is very high-risk. Many people will find it is more akin to gambling.
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For ordinary investors, the Financial Conduct Authority, the city watchdog, limits leverage to 30:1 for major currency pairs. 
It can significantly increase the potential returns on an investment as gains are calculated on the full size of the position, not your initial outlay.
On the flip side, losses are amplified as they are calculated on the full size of the position, not your initial outlay.
Currency pairs enable traders to bet on how the value of two currencies will change over time against each other. Any two currencies can be traded against each other, yet selecting the right pair is an important task. You should consider several factors.
Imagine you had a bearish – negative – view on the pound and wanted to sell it against the US dollar.
Let’s say you decided to sell Monday morning and hold the trade until Friday evening when you closed the position.
You can do this by short-selling the pound-dollar currency pair using a CfD from one of the major providers mentioned above.
Analysis by eToro shows that if you open the position with $1,000, and you decide to leverage by a factor of 10 and the value of the pound fell 2.02pc against the dollar, your return would be $200 – giving you a 20pc return on your original investment.
Forex trading is complex and high-risk no matter what strategy you decide to adopt. Look out for providers that offer online tutorials or the option to have a go at trading on demonstration accounts with virtual money.
You might want to stick to less risky currencies and start with those such as the US dollar, the Japanese yen and the Swiss franc, rather than those from emerging markets
Being successful as a newcomer requires a good understanding of global events and the time to follow trends closely. Take all the help you can get using online guides and talking to experts you have access to.
As with any investment it is possible to make large sums quickly but often this will be down to luck rather than skill. Only invest what you can afford to lose. 
Long-term savings should be put into a mixture of saving accounts and more conventional investments.
Inexperienced beginners should tread with caution and make sure they understand the risks involved.
If you decide you need a little help, you could look to instead invest in a currency exchange-traded fund (ETF), providing exposure to the performance of a currency when compared to another or a broader basket of currencies. This means you do not have to choose the trades yourself.
As a full-time self-employed forex trader, you will pay tax on profits over the tax-free personal allowance. However, as a private investor, the rules are different. How you pay tax depends on the way you trade.
For instance, if you use spread betting, you do not own the assets you are betting on. But if you trade CfDs and make a profit, that money will be subject to capital gains tax over and above the annual £3,000 allowance.
Tax on forex trading can get complicated, so it is best to get advice to make sure you are clear on what tax you might owe.
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