A Beginners Guide To Trade Currencies Like A Professional
Why you are "the One" to Trade like a Pro
With many people over the last few years having money just sitting in the bank earning next to nothing due to the very lower interest rates that the banks now offer, some have taken up trading on the currency markets. Once only the home of the big investors and governments, people can now get involved themselves for as little as $50 with some brokers. Now that amount is not something that is going to make you rich, but you need to start low and work your way up. Making money from trading the Forex markets can be as difficult as you make it.
When you do some research into trading on the Forex markets you have probably come across numerous pictures that show the currency pair moving up and down, and then it is probably covered in lines, and underneath is a number of graphs. Well unless you understand all of them and how they work, switch them off. Do not fill your trading screen up with all kinds just to try and make it look good. The best advice a professional trader will give a beginner is to setup the screen to show one currency pair that is trending, shown in candlestick mode, with nothing else on the trading screen.
This means that you are setup to just watch the way the currency pair behaves, and this will give you a feel for the way the markets move. If you are a beginner, then you should not be looking to be doing any scalping (very short term trades), so your timeline should be at least 1 hour, but preferably 4. This is to teach you to be patient, if you are watching shorter timelines and a market looks like it is going against you, then you are likely to bail out at a loss. Whereas people who have patience will have no interest when the market turns against them, as when they look at the screen after an hour it has recovered in their favor.
You may have to spend a long time staring at the market, but once you have entered a trade, walk away and do something else. You have either set a stop loss as a value, or you may time your trades, and bail out after a set time. It is recommend you use a set value though.
Some people prefer to set a trade and leave it for a day before they decide to take action on it, and if you really want to go for the long term then you would be looking at being in the marker for weeks. If you do that and get it right then it can really pay off big time. Whatever timeline you decide to start with though, stick with it, if you keep changing it then you will not get the feel for any of them. When you see a professional trader on TV, you will not see them flicking through various screens and constantly changing settings.
Are You Interested In Forex Trading?
Start your Journey
You have probably heard about Forex trading before but how much do you really know about this market? A lot of novice traders start investing on Forex without really knowing what they are doing and end up losing money. Do not make this mistake and learn about Forex trading before you invest on this market.
Forex traders usually do not make a large profit until they gain years of experience on this market. You should not start trading and expect to earn a profit right away. Take plenty of time to learn as much as possible about Forex trading and start with small investments. Consider all your losses as investments you are making for a successful future as a trader.
Choose a reliable broker. You should do some research on different brokers, for instance by talking to other traders about the brokers they use. There are many Forex brokers to choose from but some of them are much better than others. Price is an important factor but you should not choose your broker only in function of the cost of creating an account. Try finding a broker with a strong reputation and several years of experience.
Learn to reduce your risks while trading. You can avoid making mistakes by following the trend as closely as possible. You should also sell as soon as your investment loses its value in order to minimize your losses. An investment might lose value at anytime, which is why you should use stop loss orders to get rid of your investments automatically even when you are not in the middle of a trading session.
Be realistic about your profit margin. You will soon acquire a better idea of how much you can expect to earn from an investment as you gain more experience with Forex trading. It is best to look for safe investments with a smaller profit margin rather than taking risks in the hope of earning a greater profit. Set a stop loss order to sell your investment as soon as you earn the profit you were expecting. This is a good way to secure your profit instead of waiting and taking the risk of seeing your investment lose its value.
You should avoid investing more than half of your available capital. It is best to always have some funds available in case you come across an excellent opportunity. Investing less than half of your funds is also a good way to minimize your losses. You could lose all the money you invested and still have enough in your account to earn a profit that corresponds to what you lost. Make very small investments at a time if you are still new to Forex and need to gain some experience.
These Forex trading tips will help you become a better trader and eventually earn a profit. Take all the time you need to learn more about trading before you start investing on the Forex market in order to minimize your risks.