These days, many people want to start trading, and Forex is their first stop. Everyone’s heard about it, but how much do you know?
We’re glad you are here because you probably decided you need more information than your friend read on some forum, or saw on Youtube. We commend you because it shows you want to know more instead of diving in aimlessly into trading (which usually doesn’t end up well). Let’s begin!
What’s your plan?
You’ve probably heard this lots of time regarding different areas of your life, but it’s an important question; do you know what you want? More precisely, what do you want to gain from forex trading and earning money from it? There is a bigger picture in your head, for sure. What do you think about when you think of additional income? More stability? Paying off debt? Saving more for your retirement? Whether it’s a necessity or something “superficial”, it is a goal. If it makes you passionate, stick by it, since it will help you immensely when the market is volatile and feel overwhelmed. It should prompt you to recheck your money management skills and work on them if you weren’t before. See where your expenses go, where you could potentially save up a bit, and how much you can invest without damaging your overall income. The first and most useful tip you will get is not to invest more than you can afford to lose.
Be careful of scams!
Scams are the main reason people are avoiding Forex, but there is an easy way to prevent it, and it’s, you guessed it, buy research! It doesn’t take days, and you can easily find companies that have a licence and are registered. You don’t want to open a trading account and put your money into never to see it again. You won’t if you check regulator websites. Their role is to compile a list (and update it), of every licenced company, making sure you are in good hands by choosing one that’s on their list. If a company contacted you out of the blue, you don’t have to say yes right away. You can think about it and check them online. Similar goes for brokers; a reliable broker is the most important one, and the first step is seeing their portfolio and checking if they have a certificate and a licence. Broker reviews are great because they can give you a better insight into what a specific broker does, his expertise and the platform he uses. Comments are essential since you can see from other clients what the broker is like.
Don’t invest everything you have
We mentioned briefly above that you shouldn’t invest more than you can afford to lose. In the beginning, you will be trading small, and this is the best thing you can do as a responsible forex trader. Even if you put thousands in your trading account, it doesn’t imply you should put the whole amount into one buy. You can take as little as $5 and trade with that. Yes, without joking! It’s important to feel how the market responds to your actions and slowly learn the patterns (even though the Forex market is very volatile). Learning how to read charts, reading the news connected to what you are interested in investing is important. Learning from your broker and listening to their guidance is quite essential as well, and you shouldn’t take their advice for granted. They can’t stop you from investing in everything, but is it the right choice? Probably not.
Don’t overwhelm yourself
Since you’ve decided you want to trade Forex, it’s essential to mention you can quickly get burnout. There are so many opportunities every day. Your head can start spinning. Look at it from another perspective – instead of manically checking your phone or computer, you can set aside time off the day when you are not at work, not under stress and see what’s going on. Opportunities are always there and will be. That is why patience and persistence can get you far. You will learn that waiting instead of blindly going into the market is far more rewarding than acting out of impulse. In the end, that’s why you read this article. To see what you can do, to make your journey better.