Posted by forex at 9:53 AM
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1. Learn more about foreign exchange trading. Read books and consider taking courses about the market. This is a challenging, high stress market to trade. It operates 24 hours a day, and large shifts can mean gigantic profits or huge losses. Leverage in trading foreign exchange is nearly ubiquitous, as the average shifts in value are so small that the trades need to be made in large quantities to see significant profits.
2. Create a pool of savings that can cover losses made from foreign exchange trading. This field is risky, especially for new traders, and any trader who wants to remain solvent should take care to secure their personal financial situation in preparation to trade in this competitive market. For every winner on a trade, there are several losers.
3. Check for third party verification and endorsement of your broker, whether he is actively managing your foreign exchange portfolio or if it is an online brokerage. Compare fees to other firms on the market. As foreign exchange primarily deals with small shifts in value, the amounts charged on commission or in interest and fees on margin have a large effect on the bottom line.
4. Choose a small set of currencies to watch. Most foreign exchange traders focus on one or two particular currency pairs, like the Japanese yen and U.S. dollars or British pounds and euros. Learn more about stop losses and buy orders to protect trading positions that will be open while you sleep.
5. Track tax expenses and other fees carefully. It is easy to lose track of such numbers and make poor trading decisions because of it. Take care not to mark down profits or losses until after they actually happen. Just because a position is up at the moment does not mean that it can be counted as money in the bank.