Looking to start trading Forex as a beginner? To get there, a lot of hard work and patience is required, but it isn’t impossible – anyone can do it! Find below an introductory guide that encompasses all the steps you need to follow in order to learn how to start trading Forex as a beginner.
1. Choose a licensed broker that meets your needs
Success begins with the online company you choose to trade with since you will execute your trades through its services. When looking for a broker, check what platform it offers and if the tools are suitable for the strategy you want to approach; test the quality and response rate of the support team; and most importantly, verify if the broker transparently states it is licensed.
2. Settle for one financial instrument
If you are a beginner, don’t waste your money by joggling with two or more financial markets. It will never pay off! Settle for one financial instrument and try to ‘master’ it. You can start by opening a demo account and testing different strategies. Eventually, when you feel ready, go on confidently and diversify your portfolio with another asset.
3. Use leverage
Leverage works as a loan lent to you by your broker. The purpose is to increase your chances of scoring big returns while investing a sum of money you can afford. The amount of leverage you receive depends on the volume of your open position and on the broker you are trading with. As tempting as it sounds, leverage trading can be very risky too, in case the trade goes wrong. You can minimize these chances by using risk management techniques.
4. Pick the most feasible account type
Typically, online brokers design two or more account types that address to traders with different needs and different levels of experience. Although VIP and Premium accounts have much more attractive features, don’t climb the ladder by missing important steps! Standards and Classic accounts are addressed to beginners and they are geared with exactly what you need to grow as an investor.
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5. Learn, learn and learn some more!
You’ll never hear a successful trader say “Oh, that’s it! I finally know everything there is to know.” Whether you are trading forex, stocks, or any other financial instrument – there will always be something more left to learn! Knowledge is a stepping stone you can’t overlook if succeeding is your goal.
TradeFW is one of the brokers that know education forms great traders, therefore, puts at your disposal a plethora of educational materials, including webinars, videos, as well as a trained Account Manager. Moreover, there are thousands of informative books and eBooks available on Amazon, thousands of tutorials on YouTube and pretty much any form of information.
6. Plan ahead and track your results
Success is your destination and in order to get there, you need to know-how. Creating a trading plan will help you stay organized and grounded. Try to incorporate objectives that are applicable to every trade you open, like analyzing the markets, choosing the strategy and so on. Tracking your results and activity is equally important. This practice is known among traders as a trading journal because you need to describe every aspect of every trade you make, feelings included. Overall, both the trading plan and journal are crucial to your success on the long haul, a thing that you’ll come to realize later.
7. Use risk management techniques
However you look at it, trading is enclosed with a feeling of distress and fear of failing. While it holds a risk you can’t neglect, there are certain techniques that could minimize it. Firstly, you can place orders with your broker, such as stop-loss or take profit, to exit a trade at the most convenient time and avoid major losses. Another technique focuses on the way you manage your capital. In certain markets, such as forex, the possibility to make quick profits is enormous, which can determine you to overtrade. To avoid this from happening, allow a particular sum of money for each trade and limit your number of trades per day.
Ready to start trading Forex?
This forex for beginners guide is just a start, but the next steps require your full dedication and desire to succeed. Keep in mind that hard work always pays off, even in trading; so you owe yourself to not give up even when things get a bit harder.