The forex market is appealing for its liquidity, availability, and for the leverage that brokers offer. Even with a relatively modest bank, it is possible to open sizeable positions on some of the most common currency pairings, but rather than jumping straight in at the deep end, it is vital that you not only understand the market but that you have a good working knowledge of how to trade. Choose a trading platform that meets your needs and offers tight spreads, learn before you start trading for real, and always utilise stop losses.
1 – Choose A Good Trading Platform
A good trading platform may not ensure profits, but it can help by providing access to data that you need, by offering instant trades, and by allowing you to implement the stop losses and use other tools to help optimise your trades.
There are many platforms and accounts to choose from, but one like ETX Capital that provides access to a wide range of information and data, means that you will be able to make informed decisions, learn how to trade effectively, and enable you to make the most of the investment bank that you have available to you.
You will be spending a lot of time on, and investing a reasonable amount of money through the trading platform, so it is also important that you get along with the software and its features.
2 – Always Implement Stop Losses
You should never open a trade without implementing stop losses, even if you intend to watch over the trade and refresh prices constantly. If your Internet goes down, or if prices tank or fly away, you may not be able to click your mouse button quickly enough to be able to close out a trade as quickly as you need to.
Stop losses can prevent you from losing a large portion of your trading bank, and over time they can help to maximise profits and minimise losses. You should get into the habit of using effective stop losses from the very beginning of your trading, and you should continue to use them with every position that you open.
3 – Learn Before Doing
You should not apply the adage “learn by doing” when investing in the foreign currency market, simply because it is potentially the quickest way to clear out your investment bank. You could be left with nothing before you have really even started, and losing even a modest bank at the very beginning is likely to leave you feeling deflated. While caution is no bad thing, being overly cautious could be enough to stop you from making the level of profits that you need from the trades that you research and open.