Posted by forex at 6:45 AM
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1. Open a Forex mini or micro account with any Forex broker. The terminology for these account varies. To ensure decreased risk with your account, make certain that the minimum trade size, or 'lot,' of the account is no more than 10,000 currency units. Many accounts are available with lot sizes of only 1,000 which offers an additional reduction in risk.
2. Fund the account after it is opened. Most Forex brokers accept automated Automated Clearing House (ACH) transfers that may be processed through the broker's website. There is typically a three-day delay on getting access to these funds after the transfer is initiated.
3. Download and install the Forex trading platform on your computer. Most Forex brokers offer their own proprietary trading software free for all account holders. You usually cannot trade a Forex mini account without installing this program.
4. Open the Forex trading software.
5. Choose a currency pair that you wish to trade. All currency trading involves a 'base' currency and a second currency that establishes the base currency's value. No currency has intrinsic value without comparison to another currency. The U.S. Dollar, for example, may rise in value against the Canadian Dollar while simultaneously falling in value against the Euro.
6. Chart the currency pair so you can see how prices are fluctuating.
7. Purchase a single lot of the currency pair when you believe the base currency is likely to rise. Forex action is quick so you must be nimble as a Forex trader. Most Forex platforms offer obvious 'Buy' and 'Sell' button for the currency pair you are trading.
8. Sell the currency pair after you have achieved a desirable profit or to cut any losses short. Constant awareness of potential losses is the single most important issue that should be on the minds of any trader. Avoid the temptation to let your losses run indefinitely. Many new traders hope a losing position will rebound, but this usually just adds to a trade's losses.