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The 5 Steps To Becoming a Forex Trader 

 October 21, 2022

By  Advanced Strategies

Introduction: What is Forex Trading?

Forex trading is the act of buying or selling currencies. Unlike stocks, forex is not traded on an exchange. Instead, it is traded over the counter (OTC) through a network of dealers. The forex market is open 24 hours a day, five days a week, except for holidays.

The foreign exchange market (forex, FX, or currency market) is a global decentralized market for the trading of currencies. This includes all aspects of buying, selling and exchanging currencies at current or determined prices. In terms of trading volume, it is by far the largest market in the world, followed by the credit market.

Step One: Beginner Forex Trading Strategies

Assuming you have some basic background knowledge of Forex trading, we can begin to formulate a plan of action to start your Forex journey. The following is a list of steps that will help get you started on the right path.

The first step is finding the right strategy for you. There are many different strategies out there and it can be overwhelming trying to choose one. The best way to find a strategy is to experiment with a few and see which ones work best for you. A good place to start is with simple moving averages or support and resistance levels.

Step Two: Developing a Trading Plan

Before you can start trading forex, you need to develop a trading plan. This trading plan should include your goals, risk tolerance, and the strategies you will use to achieve your goals.

Your goals should be specific, measurable, achievable, relevant, and time-bound. For example, your goal might be to make 50 pips per week. Your risk tolerance is the amount of risk you are willing to take on in each trade. Your strategies should be based on your research and analysis of the market.

Once you have developed your trading plan, it is important to stick to it. Do not let emotions get in the way of your trades. Remember, forex trading is a marathon, not a sprint.

Step Three: Finding the Right Brokerage

The third step in becoming a forex trader is finding the right brokerage. There are many different brokerages out there, and it can be difficult to know which one is right for you. Here are some things to consider when choosing a brokerage:

-Cost: How much does the brokerage charge for trading commissions and other fees?

-Platform: What kind of trading platform does the brokerage offer? Is it user-friendly and customizable?

-Research: Does the brokerage provide access to good quality market research?

-Customer service: Is the customer service team responsive and helpful?

Once you’ve considered these factors, you should be able to narrow down your choices and select the best brokerage for your needs.

We use a few brokers. You can consider…

  1. RoboForex.com
  2. XM.com
  3. Tickmill.com

While these brokers are great, they are also offering a $30 no deposit welcome bonus just to try out their service. So if you still have not opened an account with them before and you come from a qualifying country, then you are in luck.

Step Four: Building Your Trading Profile

Now that you know what forex trading is and have an understanding of the mechanics involved, it’s time to start building your trading profile.

When you’re just starting out, your trading profile will be relatively simple. But as you gain experience and confidence, your profile will become more complex.

Here are the basics of what you need to include in your trading profile:

– Your name and contact information
– Your account type (live or demo)
– Your broker information
– Your leverage ratio
– The amount of capital you’re willing to risk
– The types of currency pairs you want to trade
– Your preferred time frame for trading (day, week, month)
– Your exit strategy (take profit or stop loss orders)

A simple way is to use an independant service to track your account activity like mql.com or myfxbook.com

Step Five: Managing Risk

Assuming you have followed the previous four steps, you are now ready to start trading forex. But before you begin, it’s important to understand the risks involved.

Trading forex is a risky business and there is no guarantee of success. It is possible to lose all of your investment, so it’s important to trade carefully and manage your risk.

There are two main types of risk in forex trading: market risk and account risk. Market risk is the risk that the price of a currency will move against you. This can happen even if you have done your homework and believe that the currency is going to rise. Account risk is the risk that your broker will not be able to meet its obligations to you, such as if it goes bankrupt.

To minimise market risk, you need to have a good understanding of Technical Analysis and use stop-loss orders when entering trades. You also need to diversify your portfolio by including other asset classes such as stocks, commodities or bonds. This will help mitigate the impact of any losses in your forex account.

To minimise account risk, choose a well-regulated broker with a solid financial backing. Also make sure that you understand the terms and conditions of your account before trading.

Conclusion

If you’re looking to become a forex trader, there are a few things you need to do. First, you need to educate yourself on the basics of forex trading. Second, you need to find a broker that suits your trading style and needs. Third, you need to develop a trading plan. Fourth, you need to stick to your trading plan and manage your risk. And fifth, you need to review your performance regularly and make adjustments as needed. By following these steps, you’ll be well on your way to becoming a successful forex trader.


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