How to Start Forex Trading
What this article aims to do is teach someone who may still be starting with his or her career in trading to be efficient and watchful with the practice. This delineates the best trading measures for beginners. The tips within this feature are not limited to novice traders—even the most seasoned ones will be able to pick valuable information from it.
Of course, the question that you should be asking when starting to trade Forex is: what do I want to achieve in trading?
For starters, one has to be realistic. Goals should be grounded, quantifiable and therefore feasible. For instance, you might want to consider only a 15% annual return of investment, earn $4000 of profit, get 100 pips a month, and so on. These might prove realizable as these can easily be measured.
Also advisable is a goal that you can keep for the long term. Annual goals are always healthy to pursue instead of monthly ones.
After goal setting, you should already be geared towards working to achieve it. You should be able to identify the resources you could avail like the size of initial deposit, the amount of time you are amenable to spend, and the money that you could expend for trading logistics.
After all these preliminary necessities have been determined, we can move on to devising an action plan. Here, you would need to ascertain which currency pairs you would be trading and how many trades you are willing to do. But of course, this would be extra challenging should you have no clear strategy to employ.
Forex Trading Tips
But before we delve into strategies and game plans, it must be registered that being educated and disciplined in Forex takes precedence. Being educated, in this context, means being able to understand that there is no formula or set of rules that will assure you of trading success. Simply put, there are ups and downs. It is a combination of many elements and for a trader to be “successful” he or she should be able to muster all of these through patience and mindfulness.
Part of your education should be an understanding of concepts such as ratios, charts, and indexes. You should also regard trading as a skill that you can be disciplined to possess. So, what you need to do now is take a step back and try to understand the many aspects integral to Forex trading.
Step 1: Keep Working
Being in the Forex trading industry is a battle. As this is the case, one should always be on guard. To delay something that you can do today is simply a no-no. A trader has to seize every opportunity that would come his or her way so that trading targets may be achieved. So how would this be done? Just keep trading! While easier said than done, it is the only way to not lose momentum. You might do well in the beginning by enlisting the help of a Demo account just to be on the safe side.
Step 2: Practice with a Demo Account
Practicing with a Demo account does not necessarily guarantee success, but it sure does train one to be disciplined. A demo account would prove helpful if you would want to learn the ropes around the trading platform you are planning to avail. It would actually do you best to go around the trading community and ask about their experiences with the platform that they use. Read reviews. Assess.
Step 3: Research and Learn
As stated above, it would be recommendable for a beginner to do research; study different platforms and get acquainted with trading terms. A lot of sites by different Brokerage companies offer resources and materials which the trader can make use to train himself. It will take time and a great deal of effort. But if one has the passion, doing the legwork would not be a bother.
Step 4: Acknowledge Risks and Determine Safe Zones
Earning maximum profit means one has to acknowledge the risks that come with trading. Equally important is knowing the safety zones within the market. As such, one must be self-aware. Being self-aware in trading entails making sure that you have the right levels of the capital invested and the risk tolerance to Forex trading. This simply means you should be able to efficiently analyse your objectives to trade accordingly.
Step 5: Maximize Your Investment, Minimize Your Losses
The wisest thing that can be advised to beginners is to start with small amounts. One should only increase what he or she puts out there once steady profit starts coming in. You need not invest a large amount to start earning; trade smart by maximizing your investment, no matter how small. This, in effect, minimizes the risk of overwhelming losses.
Step 6: Start With a Single Currency Pair
Needless to say, the trading world is complicated. As such, one will do well by focusing on only one currency pair—one you are familiar with as this will make it convenient for you to be updated about it. In the beginning, it would be recommendable to go for the currency of your country or something that is already widely traded. This establishes familiarity, thus making it easy for you to penetrate the Forex market.
Step 7: Control Your Emotions
Don’t get us wrong, you need to be concerned with the trades that you do. But worrying excessively, being panicked, being overly-excited, or simply feeling greedy to the point of over-confidence are not healthy manifestation of your high regard for trading; these will only lead to bad decisions. To give in to these useless emotions is to sabotage your career altogether. Emotions will simply not help your cause. One has to remain logical and practical.
Step 8: Keep a Record
Keeping tabs of your progress and pitfalls is a healthy practice. Mistakes, when remembered and learned from will lead you to positive steps towards your desired goals.