Forex is not for the faint of heart. Fast-paced, volatile, and tempestuous, the currency markets take time, talent, and skill to trade. To the uninitiated and the inexperienced, they can seem as though they move on a whim, prices rising and falling with no logical causation to explain the patterns that emerge.
But this belief is erroneous. In fact, the markets are driven by thousands of external, real-world factors, and it is these that traders are deciphering when they turn their skills into success. This reality thus elevates forex from a game of luck to a game of talent, and the good news is that this makes it entirely possible to tip the scales of fortune in your favour.
If you’re wondering how you can do that, here are four golden rules to get you started…
#1: Choose the Right Currency Combinations
The first thing you should do once you have decided to try your hand at trading is choose your currency pairs. Many novice investors make the mistake of only doing this after they’ve settled on a broker, but this is a dangerous tactic, and will severely limit the options that are available to you. Instead, do your research and look at the properties of various combinations before you decide on a company, so that you can ascertain which ones will best suit your strategy, personality, and approach to risk.
#2: Choose the Right Broker
Once you’ve settled on your currency combinations, you’ll need to find a broker that offers them, so spend some time compiling a suitable shortlist. Once you have it, narrow it down based on a number of factors, namely your budget, their reputation, and the type of service available. The latter is particularly important, as three different categories of broker exist, and some will suit you to a far greater degree than others. As a rule, you’ll find that discretionary brokers are the most expensive, advisory brokers are best for those seeking to learn their art, and execution-only options are the most time intensive.
#3: Choose the Right Platform
When you’ve selected a broker, it’s time to take a look at their platforms and software in order to ensure that they’re compatible with your needs and facilities. Most companies, such as Hantec Markets, will be more than happy to give you the chance to demo their offerings, and this is something that you should always take advantage of. If you’re choosing between a few options, spend some time drawing up a list, and fill it with notes to help you compare your choices and settle on the one that will be best for you.
#4: Do Your Research
Last but not least, do your research before you start trading: on your currency combinations, your broker, forex platforms, strategies, tactics, and anything else that you can think of. In order to become a successful trader, you’ll need to understand the principles underlying the markets, and the best way to achieve this is by doing your homework. Although there are some lessons that experience alone can impart, the more you know, the better you will do.If you’re considering giving forex trading a go, then get started on the right foot by following these four top tips today. Success is within your grasp, so why not reach out and take it?
If you’re considering giving forex trading a go, then get started on the right foot by following these four top tips today. Success is within your grasp, so why not reach out and take it?