Posted by forex at 1:45 AM
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1. Learn more about the way the foreign exchange markets work. Learning about its history, market factors and fundamental and technical analyses will help you create a successful trading plan.
2. Prepare a separate bank account for the funds you will invest in your foreign exchange account. You will need this to deposit and later on withdraw money from your forex account. This will also help you keep track of how much you've made or lost. Be aware of wire transfer charges that might be imposed by your specific bank.
3. Create a user account with a trading company. Most of these companies will allow you to create accounts even if you haven't invested any money with them at the onset. This will allow you to get familiar with the resources and services made available to you.
4. Familiarize yourself with your trading company's trading platform. These are usually either web-based or downloadable trading platforms. Take advantage of tutorials being offered by your company.
5. Create a trading plan. This goes beyond choosing which currency pairs you will trade in and how much money you will put in. You will also need to take into consideration the following factors, among others:
a. The time frame of your trades
b. The indicators you will use for your analysis
c. Your tolerance for losses and goals for profits
d. The time you can spend for trading every day
6. Test your trading plan with a demo account with your trading company. This allows you to simulate foreign exchange trading using 'play money.' You can test your trading plan and see if it is profitable before you invest your real money in a live account.
7. When you're comfortable with your trading plan and the trading platform you are using, start your live account with your trading company. The standard forex trading unit (or lot) is worth US$10,000. Some companies will offer this, but many companies now offer mini-accounts as well. These allow trading with mini-lot sizes as low as $10. Profits from live accounts are proportional to the size of the lot sizes made available for the account.