- Open a FOREX trading account. You will usually have the option to trade with free money or real money. Learn to trade with the demo/practice account before you start using real money.
- Don't feel discouraged because you performed poorly with the demo account, it is very difficult to create a realistic situation when you are using demo money. The way you think and analyze will change when you start trading with your real money.
- Learn the basics of Forex trading, keep an eye on OIL, GOLD, STOCK Market prices, these are some of the few factors in currency fluctuation.
- Stick to just one pair. The most commonly traded pair is EUR/USD and USD/JPY. If it's good enough for the banks, it's good enough for you.
- Learn money management! This is the most important thing you can do, learning what amount should be used on a specific trade can save you from losing your bankroll.
- Try to focus on using only about 20% of your total cash. For example, if you decide to invest $1000, try to use only $200 to invest in the currency pair. The prices in Forex are extremely volatile, and you want to make sure you have enough money to cover the down side.
- Please note, trading currency is different from trading stocks. For example, if you bought $1000 worth of stocks and if the stock prices become $0, you will lose your $1000. In Forex, you can lose more than your investment so make sure you use only a portion of your cash to invest and keep about 80% of cash to cover the down side.
- If your currency pair goes against you and you don't have enough money to cover the duration, you will automatically canceled out of your order. Make sure you don't make this mistake.
- Limit your losses, but don't be too conservative, lets say that you invested $200 in EUR/USD, and today, your total losses are $50, if you limit your losses to less than $50, you would have lost money. This is why it is important to use only about 20% of your funds, since you can set the stop loss to more than your investment which can be $200-$300, however much you are willing to risk. Having enough capital to cover the downside will allow you to keep you position open and see profits. Please note: Loses aren't losses unless your position is closed. If your position is still open, your losses will only count if you choose to close the order and take the loses.
- It will only be matter of time until you get your money back and start seeing profit. Be patient and don't get too emotional about what happens to the prices. They are out of your control and the only thing you can do is to research estimate the direction of the market.
- There are softwares to help you analyze the risks and losses which will help your trading experience lot more consistent and profitable.
- Be smart with your money and don't create a casino environment. You can be successful if keep track of the financial news and control your losses.
- Look for useful tools and analytical reports online regarding the economy, etc and use helpful softwares to control your risks.
- Remember that trading with Forex is highly risky, you may lose your hard earned cash, therefore never use money you can't afford to lose.
- Good Luck!
- Source--wikihow.Com
Related Articles :
0 comments:
Post a Comment