If you are already familiar with the world of Forex and know how it can make you profit here, we pass through some tips on how to embark on the trading wagon.
Arm yourself with knowledge
Most people try to trade without even knowing the difference between CFD and invest or between the trading platform and trading account. So you guess the first thing to do is to arm you with the knowledge. Grab that free ebook offered by your broker and follow tutorials of professional traders. That’s the best you can do at the beginning. After you get heated for the trading, open a demo account and start trading for yourself and you will feel the market without needing to deposit any money.
Dedicate a sufficient amount of time
To make a living from Forex is possible. But that should be your ultimate goal. First, if you want to make it a second source of income, you need specific time in a day or week dedicated only for that activity. Nevertheless, it’s not entirely business in a proper sense, and you must approach it as it might be soon.
Make sure you have enough money to start.
When we say to start, we mean strat strategically and with a trading plan at hand. Forex is good because you don’t need to have a bunch of money to start. Many brokers take only $200 for a minimum deposit. But for a strategic kick-off, you will need at least $1000. These funds should only be used for trading on Forex and nothing else. Don’t tap into the funds dedicated to your dream holiday in Hawaii or your children’s education.
Pick the strategy that matches your needs.
There’re strategies like scalping, day trading, hedging, momentum. Your task is to learn as much as you can about these and to test them on a demo account. Once your confidence level is high, you pass on a real trading account. You pick the strategy depending on how much time you can invest in trading, how much money you put at risk, what is the leverage and many more. Never underestimate the compound effect which can be regarded as a strategy. It means investing all your profits from previous trades into the next trades. On account of an interest rate, you will be quite surprised with the result.
Create trading plan and strategy
Once you figure out how the markets work and what drives the prices, as well as what strategies you have at your disposal, make sure to create a trading plan. A trading plan is of utmost importance, especially if you are a rookie. But also if you are already a seasoned trader. It gives you perspective on what approach you will take, how much you invest in every trading session, how much you expect from daily, monthly and yearly periods of trading. Also, it will drive your trading decisions when it comes to exit and entry points. It might include the whole strategy but not necessarily. Besides the plan, you need to have a trading journal and note all your mistakes which will serve you as a guide to improve your strategy.
Entrust your money to a reliable broker
It’s true that many leave this market in tears and empty pockets. It’s because they have been scammed by suspicious companies and individuals. That’s why you need to dedicate time to compare reviews, read opinions on particular brokers and only choose the regulated companies. Once this step is reached, you can peacefully open your trading account and start trading currencies or whatever other asset you like if the broker covers it in its offer.