1. Choose a Fully Licensed Broker
One of the most important things for you to do is choose a reputable, fully licensed broker. A regulated broker will provide you with an opportunity to be successful. Look for a regulated broker that has low spreads and good order execution.
Remember these key points while choosing a forex broker:
- Look for a forex broker that is regulated
- See if the forex broker offers a minimum deposit amount
- What is the leverage that the broker offers
- What is the minimum contract size that you can trade
- Bonuses and the terms and conditions
- Deposit and Withdrawal types as well as the terms and conditions
- Trading methods that are allowed by the broker
When you are planning on trading the forex market, you need to put an emphasis on education. You need to learn as much as you can about the market. Successful traders generally spend a lot of time learning strategies and information about the market.
3. Manage Your Risk
It is very easy to become over-leveraged in your forex trading account. You need to implement sound money management principles in every trade that you make. You should make sure that you are trading with a lot size that is not too big for your account balance. You also need to implement the use of a stop loss on every single order that you place.
4. Have Realistic Expectations
What do you expect to achieve in the first three months, six months, year, two years and so on? It’s a good idea to write down what your goals are and where you plan to be in your trading at the end of those periods.
One of the more popular methods to trade the FOREX market is called scalping. With scalping, you are trying to get in and out of the market quickly. A scalping method might only take a few minutes, or it could take as long as a few hours. The main idea behind scalping is that you are only aiming for a few pips here and there.
6. Start On Demo
Having done your homework in the preceding steps it’s time to start trading, but only using a demo account. Never risk real money until you are consistently profitable over a meaningful period of time, e.g. at least 3 to 4 months.
7. Start Small
Open a real account with the minimum amount (this can be anywhere from $100 to $1000 or more depending on broker) and trade according to the knowledge of risk procedures and parameters you will have now acquired by following the steps above.
8. Be Patient
Be patient with the market, and above all be patient with yourself. Don’t let lack of signals force you into mediocre trades; you will only lose money over the longer term.