The presented article is intended for those who just turned their eyes toward Forex. Beginning traders who are still learning the basics of the foreign exchange market may also find something of interest here. Experienced traders will not gain anything worthy of their time by reading this article.
Basically there are four steps which can be defined as must do for those who wish to start trading Forex. Though, their order is not particularly important, a more important part is their content, to which the great attention and responsibility must be paid:
- The first step is finding a right Forex broker, which will be your main tool in trading. You can have a great strategy, good technical analysis skills, or outstanding intuition, but you will eventually fail if you choose a bad broker. A good FX broker is the one that will not steal your money, will be doing real trading with your positions, supports your preferred deposit/withdraw methods, and has fast and helpful user support service. It is nice if a broker is registered with some sort of government-affiliated financial authority. One of the most important aspects of a broker is its trading platform — but for a new trader this part is not so important as for expert traders. Still, you will probably want to trade with some powerful and informative platform, such as a MetaTrader or cTrader. For new traders, the more important is a demo account, which can be used to trade virtual money while you are training your Forex skills. If you are new trader, start only with the demo account! Do not lose your money on your first mistakes!
- The second step is learning the basics of foreign exchange trading. If you have already found your broker, you will easily get all information from its website or user support. There are many articles and websites dedicated to currency trading basics on the World Wide Web. All you need to do is google for "Forex trading basics" and you will find everything you wanted and even more. This step should not be underestimated because trying to trade without a solid understanding of how the market works is not only very risky, it will also become boring very soon.
- The third step is about education. Forex trading education is not similar to any other education you have probably got in your life. The foreign exchange market is very chaotic, such is the education — there are no fixed rules and all-time laws, it is unstable and dynamic. So to be on the top, you must learn new things about Forex regularly and constantly. Try to read as many books, articles, and opinions of other traders as you can. The more you learn, the more educated you will be. And with adequate FX education you will be able to create very sophisticated and effective trading strategies.
- The fourth step is the final one; at least I consider it to be the final one. To achieve successful results in the Forex market you need to develop your own strategies. While you are learning you will be satisfied with known strategies and, probably, even with some free Forex signal services. However, the true goal, which leads to successful Forex trading, is to develop your own strategies. Not just one strategy, but to follow the market day-by-day, developing new strategies and improving those that began to fail. And this goes not only with the trading strategy (this part is obvious), but also with the money management strategy (this part is often underestimated). While you gain experience in trading, you will inevitably build such strategies that will fit your trading style, you character, and your lifestyle as best as they can. And after that, trading will become a real pleasure, which will eventually lead to your financial freedom.
by Andriy Moraru