How to Begin With Forex
The Forex market offers many advantages to investors, but knowing how to begin is more than half the battle. This guide will give a rundown of the steps it takes to get started.
Forex is not easy! You MUST have your knowledge or the knowledge of experts to make money on your investments! It is easy to get started trading, but knowing the trades to take--that is the difficult part!
Step 1: LEARN! Learn as much as you can about Forex. Read Forums, blogs, guides, books...anything you can get your hands on! The more you know, the more knowledge you will have when it comes time to make decisions about a trade or a trading service!
Step 2: A broker is required to handle your trades. Do a LOT of research! Find a broker with NO DEALING DESK, as these broker have a human watching the trades that come in an out of the brokerage...often trading against you in order to make money on your trades (in which case you lose!) Once you have done your research and chosen a broker, open a demo account. This will allow you to learn how to place a trade, look at charts, watch the speed of the market, and test out a strategy. Once you have had a demo account and feel comfortable with Forex, you can fund a live account with the broker and begin trading for money.
A mini account is an option for those with less than $5,000. This allows you to trade with very small lots and manage the amount of money you are risking.
An honest broker makes its money on the spread: this is the difference between the price you pay for the currency and the actual price. On most major currencies, this runs between 2 -5 pips. Few brokers charge commission, which means that you can make small trades without the worry that profits will get eaten up by commissions and fees.
Step 3: Strategy. You MUST have a strategy of some kind before you begin trading! Whether this is your own strategy or one you pay a monthly subscription fee for, FOLLOW IT! The biggest mistake traders make is discontinuing a strategy because of a bad day, week, or month.
Step 4: Repeat, repeat, repeat. KEEP LEARNING! The more you know, the better! Continue your strategy! Join blogs and forums to discuss the market with other traders. Be consistent, and you will make money in the Forex market!