Starting a career in the Forex market is not trivial, especially if you want to succeed and make money on the market for the long term.
Here are some basic rules to follow so you don’t get kicked out of the Forex market before you start making consistent profits.
The importance of education
Forex trading attracts individuals because you don’t have to go to college or graduate to be successful. It is a priori open to everyone, yet the vast majority of retail traders lose money in Forex. Indeed, while degrees are not required, learning and understanding the basics and trading is essential for success in the Forex market. So it still takes a lot of time and effort to learn how to trade, it’s not easy to get there, but you can do it if you are determined and disciplined.
The importance of training
Don’t overlook the importance of training: any new career, whatever it is, begins with training. Take the time to train yourself in Forex trading and master the different concepts and strategies.
Start by practicing on a virtual trading account to test the platform, get used to analyzing charts, and placing market orders. This approach should not last more than a couple of weeks to a few months. It only serves to master the basic concepts.
Start real trading smoothly: you can deposit your money and start trading Forex, but only with small positions. Starting in real life is the most difficult step because the demo’s confidence comes up against a new parameter, psychology.
The skills required to come into play at this stage are the key to the Forex trader’s success. Starting with small positions allows you to make rookie mistakes without consuming all of your investment capital.
Increase position size over time: the more you trade, the more experienced and confident you are. You can then start to gradually increase the size of the positions and aim for more substantial gains.
Adopt strict risk management rules
Even after years of experience and gains, every Forex trader must maintain money management rules to avoid losing too much. For instance, not to risk more than 2% of the capital in a single position or more than 5% of the capital on a trading day. Stop trading for a while after a series of three consecutive losses.
Open account with reliable broker
To start trading Forex, all you need to do is open a trading account with a Forex broker.
Find the best Forex broker for you. It must be regulated in your region and offer competitive spreads (costs). If you are a newbie Forex trader, make sure your online broker has rich Forex and trading education and training content.
When opening a Forex trading account, your broker will offer you to download a trading platform. This is the interface from which you follow stock prices, perform your graphical analyzes, and place your trading orders.
Before opening a trading account with your money, it is strongly recommended that you start with a demo account, i.e., a virtual account with virtual money, but under real market conditions.
It enables you to gain a risk-free experience before you actually start trading Forex.
Starting with major currency pairs
Start with the less volatile currency pairs and after you have gradually developed your trading skills and learn more about the specific currencies, go for more exotic pairs. Starting with minor or exotic pairs can be risky and therefore not recommendable for very beginning Forex traders.
Control your emotions
Everyone longs for quick money, and that’s where the great starts to overtake you. It’s bad for your trading decisions. Sometimes it is better to miss the seemingly profitable opportunity instead of making a fatal error that will cost you a bunch of money. It’s not possible to stay calm in front of the trading screen. But it’s in your power to escape falling into the trap of over-emotional reactions. You always have to know where is the right time to quit trading. The new opportunities will always show up.