You can hear a lot of people talking about opening a demo or a real account. Various promising slogans from the broker companies always lure in new people who want to have a flexible schedule, work independently and have a steady income.
This dream can become your reality. However, there are a few basic things that you need to know before starting your financial rise to the top of the Forex Olympus.
I. What is Forex and how does it work?
Forex is an international market for currency exchange. The way it works is very similar to any other market: buy low, sell high. You buy a currency at one rate, sell at the other, and the difference is your profit. This principle applies to investors, traders, banks, etc. It's worth to note that we live in a wonderful time when not only large companies but also anyone can gain access to the Forex market.
However, in order to make a decent profit there, you need to have a large amount of money in your possession, a million euros, for example. In reality, one rarely can afford investing such a large sum of money, without taking all risks of speculative trading into consideration. This is why broker companies are so popular; they can increase your funds by a few times, using the principle of leverage.
Let's say you have the leverage of 1:100. You invested $5,000, your leverage increases it by a 100 times up to $500,000. All this provides an excellent opportunity for anyone willing to try their hand at trading in Forex.
II. It's extremely important to choose the right broker!
There are numerous broker companies that promise colossal profits to their potential clients, however you should keep an eye out for a few moments:
â¢ Trading conditions
â¢ Platform reliability
â¢ Spread width
â¢ Type of order to use
â¢ Reliability of connection with the broker
â¢ Conditions on Stop Orders and Entry Orders
â¢ Methods of managing open positions (phone, mail, skype, etc.)
Don't forget about the goals that brokers pursue, what makes up their profit? What's better: no commissions or minimal spreads? The decision is yours, although you should not have to go far for the answer.
III. Learning is the only way.
Everyone's heard of the American Dream, pursuit of happiness and riches, but we say: "Keep your head down, and your tail up." Before you get your first profit, you need to put in some work: take your time with training, learn different strategies, specifics of financial markets, and study how other successful traders operate.
IV. Learning a trading platform.
Forex is a very large market and also one of the most liquid ones out there. In order to become a successful trader, you need to follow the latest economic news, and that's why there is a special software known as a trading platform. Trading platforms gained popularity with the rapid expansion of the Internet. They ensure safety and create a convenient environment for trading. Trading platforms are available for PC's, phones, tablet PC's, smartphones, and almost any other gadget that allows you to install third-party software. The main functions of a trading platform include displaying currency pairs with their exchange rates in the real-time mode and an interface to complete transactions.
Company FXFINPRO CAPITAL offers 2 different trading platforms: the famous MetaTrader and the innovative Protrader. You can sign up and download them here: https://my.fxfinpro.com
V. Understanding two basic types of market analysis: fundamental and technical.
Without the proper market analysis, your trading is bound to fail. You don't necessarily have to know all the details of the analysis when you start out, however you must understand what factors influence the market behavior (world economic news), and be able to properly interpret current trends.
FXFINPRO CAPITAL offers you daily analytical announcements, both on fundamental and technical analysis. To follow the latest news in the world of economics go here: /analitika
VI. Managing capital.
When working with funds and managing capital, we first need to determine the ratio of the actual deposit to the trade size. The main principle is that the loan should not exceed 10% of the total deposit. In the future, you will need to expand your views for a more comprehensive understanding of capital management principles.
VII. Trading strategies
If you want to work out your personal strategies, you need to get familiar with the already existing ones. And there are a great many available. As you probably know, everything in our lives follows a trend, so does the Forex market. For example, a lot of people think that EUR/USD and GBP/USD currency pairs show little movement during the day but speed up at night; AUD/USD and NZD/USD movements often coincide. Thus, based on similar observations, were created the following strategies: Martingale, Grid, Scalping, Day Trading, Arbitrage, Anti-Martingale, Breakout, Trend following, Trading the News, etc. With time, you will understand what strategy suits you best or work out your own strategy. However, you must remember that you should always have a plan in mind if want to make a profit.
VIII. Use demo account for training
Before moving on to the real trading, you must gain enough experience with the demo account. Patience is a virtue, if you ignore this opportunity to train, it'll come back to bite you. Remember, you must know how to open an order of any type including Entry Orders and Exit Orders (Take Profit, Trailing Stop, Stop Loss, etc.). You must also know how to use the indicators, adjust the news feed, and so on. Once you are comfortable with these things, you can open a real account.
To conclude, we should note that currency trading is no game. Nothing great comes without effort. The Forex market, too, has its own rules and principles that you have to abide by if you want to succeed. If you don't learn the math, you won't solve the problems, just like if you don't know how to control your voice, you won't be able to sing. The Forex market is a serious financial industry that demands experience and fundamental knowledge.
FXFINPROCAPITAL appreciates and respects its clients, that's why we think it's necessary to repeat again and again that you must have a serious approach and the right motives if you want to fruitfully trade in a currency market.
Remember, there is not one Forex millionaire who thinks trading is a fun game. Think big, work hard, don't let your laziness get in the way, and you will succeed!