The mere fact that it has become so simple to trade forex, with sessions throughout the day or night, and with high leverage levels, it has also become easy to lose money. If you take into consideration these factors below, you could avoid losing your money in this competitive financial market.
Do Your Homework Before you Trade Forex Live
It is vital to learn as much as you can about trading forex. Just because it is easy to get into the market, it does not mean that you should not learn about it before you start trading forex live. You will learn the most when you are trading live, but it is best for you to try and become aware of the pitfalls as this is the way you will be able to avoid most of them. This will be an ongoing learning experience as you learn about the regulations, global economic events and changes in the market conditions.
Find A Trustworthy Broker
As there is no central marketplace through which you trade, there are also limited regulations for brokers to adhere to. This puts you at risk of finding those brokers who are not as reputable as they should be. To put your mind at ease regarding your deposits and the integrity of a forex broker, you should ensure that the one you choose is registered with a regulatory body.
You should also check to see exactly what you are being offered by the different forex brokers. Check to see the leverage amounts that are on offer, spreads, commissions, the amount of your initial deposit, account funding policies and fund withdrawal policies. You should be able to obtain all this information by contacting a customer service representative.
Practice Account
Most of the trading platforms that are available offer you a demo account. These are perfect for practicing before you trade live. You will be able to trade with fake money, but will have access to the same functions that come with a live and real account. This type of account will give you the opportunity to gain experience, and you will be able to test your methods and strategies.
Charts
Once you have opened an account, you will be bombarded with analysis tools offered by the platform you are using. Most of these charts will be suitable for your use, but you should bear in mind that too much information can confuse you and prompt you to make incorrect decisions. Using similar types of indicators, such as two oscillators or two volatility indicators, could offer opposing signals which will make that information redundant when you are trying to trade. Try to avoid this scenario.
The charts that are available often have a confusing look to them. You should change the colours and fonts to suit your taste, or to something that makes it easily readable. This will allow you to respond to the market quickly and effectively.
Money Management
You need to practice money management skills when you are actively trading. Many of the professional traders agree that it is possible to enter a trade at any given price and still show a profit – the problem comes when you do not know when to exit a trade.
If you are searching for a semi-automated system with user-friendly instructions, we highly recommend Zenith Harmonic Pattern Scanner created by Mike N. Necessity for all traders, Zenith Harmonic Patterns Scanner offers a financial trader ideal set-ups for the trade. As well as control risk for the trader by identifying failed pattern.
