5 Things You Must Know When Starting to Trade Forex
Friday, January 26, 2018, 6:00 PM | Leave Comment
When talking about online trading, many people think stock market. However, more and more online traders decide to turn to forex trading.
The forex market, also referred to as FX, allows users to trade with foreign currencies.
Right now, it’s estimated that FX excels about $5 million in volume. And since forex trading has proven to be such a good option for many online traders, chances are you’re thinking about giving it a go.
And to help you, we’ve come up with 5 things you must know when starting to trade forex.
-
Working on your own is recommended
When starting out, you might be thinking about the idea of working with someone else. After all, having two people observe the market may seem like a great idea. Still, most of the online traders enjoy working as lone wolves. That way, they have absolutely no one to answer to, except, of course, the market.
Being a forex trader includes making a lot of risky decisions, and unless you’re willing to risk a friendship, working on your own is recommended. Needless to say, this means you’ll have to come up with your own forex trading plan and strategy.
-
You have to restrain your emotions
The more emotional a forex trader is, the more difficult trading becomes. That said, you’ll have to restrain yourself from using phrases such as beginner’s luck and winning streak. After all, these phrases are supposed to be used in gambling, not in business.
Instead, what you need to do is do a thorough research before making an investment. The more precise and professional you are, the more successful you’ll be. It’s also a good idea to set clearly defined rules when starting out and stick to them your entire trading career.
-
You should try not to risk more than you can afford to lose
Obviously, when entering the world of forex trading, you’ll lack the experience and analytical skills necessary to make a perfect trade. Therefore, your trading efforts will be more of a gamble than actual trading. What this means is that you should restrain from risking more than you actually afford to lose.
Start with what you believe are safe bets and don’t invest more than 1% of your total net worth unless you get a hang of it. And the more trading you do, the better you’ll become at trading and only than should you think about investing more.
-
You need a good platform to trade on
In order to make good trades, you’re also going to need adequate tools. Most importantly, you’ll need to find a good forex trading platform to trade on. Latency and high-quality execution are what you should look for in a platform you’ll be trading on.
Moreover, you should choose a platform that allows you to trade through various devices, such as your smartphone, tablet and laptop. This is something you’ll have to pay some extra attention to, since more and more traders seem to be online 24/7.
-
There are beginner-friendly currency pairs
If you’ve already taken a look at all the currencies you can trade with, you’ll probably end up being confused. That’s why it’s always a good idea to start with a single currency pair and stick to it until you gain some experience.
On top of this, you should try to choose a currency pair that is as beginner-friendly as possible. EUR to USD pair is always going to be your safest bet, with SUD to GBP and AUD to USD serving as splendid alternatives.
Have these 5 things in mind when starting your forex trading career and you’ll be off to a great start. And of course, the more trading you do, the more chance you’ll have to make some serious money.
Throw us a like at Facebook.com/doable.financeAuthor BIO
Dan Radak is a marketing professional with ten years of experience. He is a coauthor on several websites and regular contributor to BizzMark Blog. Currently, he is working with a number of companies in the field of digital marketing, closely collaborating with a couple of e-commerce companies.
