Most people are aware that forex trading, like all forms of investing, is associated with a certain degree of risk. The best way to trade forex online will incorporate methodologies to minimize your risk while maximizing your potential profits in a manner that optimizes your efficiency, your forex-related education and your opportunities. In this article we’ve compiled a list of the steps that you’ll need to take in order to ensure that you’re trading forex online in the best possible way.
Image may be NSFW.
Clik here to view.
• Get Educated: There’s no point in considering getting involved in trading forex unless you’ve garnered at least the basic knowledge base necessary to understand the forex markets, its rhythms and the outside influences that affect its movements. Whether you make use of your local library, take a class or webinar or seek out some of the information widely available on the internet, you’re going to have to learn about currencies in general and the different types of brokers (and their functions) in particular, as well as about interest rates, economics and even money management if you are to have any measure of success in trading forex.
• Choose a Currency Pair: The most successful beginning forex traders are successful because in addition to doing many other things right, they begin their trading careers by focusing on just one single currency pair, getting to know its movements and fluctuations inside and out. Pick a stable and liquid pair such as USD/EUR, or USD/GBP and stick with it, making sure that you keep abreast of economic news and rhythms affecting your pair’s spread, and avoid getting distracted by more exotic and illiquid currencies.
• Find a Broker You Can Trust: There’s multitude of online forex brokers vying for your business—and your cash. Many are in the business of luring novice retail traders in with promises of incredibly high profits and incredibly low risk, barely hiding their true agenda: when you lose, they win. Steer clear of unrealistic promises and instead, focus on those legitimate brokers who have stake in their clients not because they want the client to lose, but rather, because they understand that a client who wins is a client for the long-term. Compare services, fees, benefits and account terms and conditions until you find a broker or two (or three) who match your risk and investment profile most closely.
• Trade in a Demo Account: Even better, trade in multiple demo accounts to expand your experience while getting a feel for different brokers’ platforms and interfaces. Look for an interface that’s user-friendly and understandable while you hone your nascent trading skills utilizing virtual money. Trading in a demo account is an excellent way to honestly assess your strengths and weaknesses as you try out different strategies to determine which trading style leads you to the highest rate of success, while simultaneously taking different brokers out for a test drive. Do not consider staking your trading activities with real cash until your virtual trading activities are consistently keeping you in the virtual money black.
• Hone Your Technical Skills to a Fine Edge: More so than almost any other kind of investing or speculating, successful forex trading depends to a great extent on the analysis of a vast amount of technical data. Be certain that you take the time to familiarize yourself with a wide variety of the numerous types of charts, indicators and tools available so that you can zero in on those that you believe will be of the most assistance to you. If you discover that technical analysis is not your forte, invest in a good charting package to undertake the hard work for you.
• Get a Strategy: There’s plenty of providers and brokers out there offering to sell you the secrets to their forex trading success for a price, and even more who claim that their proprietary electronic assistants—also known as forex “robots”—can guarantee you a measure of success supposedly otherwise out of your reach. While there’s nothing wrong with paying to learn the “secrets” of someone else’s strategy, there’s equally no reason why you cannot devise a workable and successful strategy of your own. Since you’ve already traded in a demo account for some time, you should be able to identify the trading time frame which works best for you; since you’ve already spent some time familiarizing yourself with various charts, tools and indicators, you already know which ones are the most understandable to you, and which you think are the most pertinent to your chosen currency pair. You’ve already got all of the tools you need to design your own trading strategy based on both these inputs and your skills, and you’ve got the demo account time to nip and tuck your strategy until you arrive at a balance of factors which works best for you.
Image may be NSFW.
Clik here to view.
• Open The Right Kind of Account: When you’re ready to move up from the demo account stage to the big leagues, there’s no reason to do it with a bang. Rome wasn’t built in a day, and neither is forex trading success. Start by opening a mini forex account with your chosen broker so that you can begin to gain real world experience while limiting the amount of your at-risk capital, yet enjoying all of the benefits of a full-fledged standard trading account. Mini forex accounts are a great way for beginning traders to get their feet wet and gain confidence in their own abilities while trading in smaller-sized mini lots of 10,000 units, where a pip costs only $1.00, while also gaining the full overview necessary to determine whether the broker’s platform, interface, customer service, account management and fees are up to par with expectations. If they’re not, opening another mini account at a different broker is inexpensive and easy to accomplish.
• Treat it Like a Business: Don’t even think of getting involved in retail forex trading unless you’re willing to make the commitment necessary to treat your forex trading activities like the business that they are. Keep regular business hours and operate according to a regular business plan, which should address such standard business issues as the business’ goals, strategy and operating plan. Keep business books and records, monitoring your “firm’s” cash flow, net income and profit and loss. The commitment you make to yourself in running your activities like an investment corporation of which you are both CEO and COO will show in your year-end bottom line.
• Practice Smart Money Management: Solid money management goes deeper than simply “don’t trade what you can’t afford to lose”. Forex trading is a highly speculative venture and as such, you should always be aware of every penny of paid-in capital, as well as every penny of profit. Keep only an amount of money in your account sufficient to fund your on-going trading activities, and begin to move profits out of your account as soon as you’ve generated an amount equal to your original stake; after that, move monies out of your trading account at pre-determined intervals . Always fund your on-going trading activities out of profits, instead of adding additional capital to your trading account. Most importantly of all, stick to your stop losses and avoid the urge to ride out a bad trade in the hope that the spread will correct itself in your favor: this isn’t stock trading, it’s forex, and your next profit is only a trade away. Get out when your gut tells you to.
• What Are The Best Ways To Trade Forex Online?: Trading can not only be highly lucrative, it can also be highly enjoyable. Once you hit your stride, you’ll be surprised with the extent to which the rhythms of the trades become second nature, and you’ll surely enjoy the benefits of your forex trading profits. Remember to avoid getting on the emotional rollercoaster when the market temporarily turns against you, and you’ll find yourself wishing that you’d started your forex activities sooner, because by now, you’ll know full well what the best way to trade forex online is: winning.
For further information and any questions please do not hesitate to contact us. It is our pleasure to help you.