If you’re considering devoting your time and money to trading, then it’s vital that you understand the size of the potential losses as well as the potential profit margins. As a result, you have to see trading as very serious business. However, this doesn’t mean that learning the markets and how you can make a success of them, and becoming a forex trader is relatively simple. Just make sure you follow our top three tips.
- Research, Research, Research
Big losses are made when people trade on impulse. As such, all of your trades should be justified based on research.
Start with researching technical analysis on free sites and work your way from there. The forex markets are technically driven, so this will provide you with the best starting point. Once you’ve established a solid foundation, you’ll be able to keep pace with daily technical and fundamental developments, so you’ll be able to make better informed trades.
Once you’ve begun your research, you’ll be able to construct a trading strategy or plan that works for you. Calculate what your end goal is and how long you’re willing to wait to get there. This will inform your level of risk you’re willing to take and will also inform your lot size. From here, you can use your research to draw up a comprehensive strategy for tacking the markets. The more research you do, the more informed you will be and the better chance your trades have of being successful.
- Find a Broker that Works for You
Firstly, you want to find a reputable broker that’s regulated in multiple countries. This will show that your broker is trustworthy and stable. In addition, you should also check its market share. Brokers with large shares, such as FXPro, will have large amounts of resource that they can put towards making sure that their platforms and servers remain stable and do not crash when the market becomes very active, meaning that they’re far more reliable.
Finally, you should also opt for a broker that you know has a large number of employees. This way, you’ll know that you have the ability to trade over the phone without having to worry about getting a busy signal.
- Select a Single Currency Pair to Specialise in and Grow
Lastly, it’s important to know your limitations as someone who is becoming a forex trader. Although there are a number of different currency pairs available, you’re far better off selecting one to begin with and specialising.
This is because different market factors affect different pairings differently, and you don’t want to overcomplicate things at an early stage. Use your education to work one pair. Then, when comfortable, you can branch out.