Posted by forex at 3:56 AM
Read our previous post
1. Read about foreign exchange through authoritative free resources, such as those offered through eHow and websites such as Baby Pips (see Resources section) and Investopedia (see Resources section). At first, seek out neutral websites that aren't directly selling some kind of service, product, or trading system. You'll need to understand the basic terms involved in foreign exchange before you have adequate knowledge to evaluate more complex offerings.
2. Decide what kind of foreign exchange trader you'd like to be. Some traders are 'scalpers'--those who hold a position for only a few seconds at most. Others trade based on news related to international currencies, interest rates and politics. Some traders buy, sell, and short based on 'breakouts'--sudden price shifts in one direction. Figuring out what kind of trading suits your personality, areas of expertise, and risk tolerance will help you narrow your research.
3. Open up a practice account with a foreign exchange brokerage to try out some of the strategies you've learned. Successful traders develop their own system sfor trading, informed by principles that they've learned. Try different strategies to find out which ones are successful. Practice accounts can give you the freedom to experiment without risking your capital. They also give you the opportunity to test out different brokerage firms before making a final decision.
4. Read well-reviewed books about foreign exchange trading and trading psychology. This will help you hone your skills before you begin trading. Books tend to have a higher density of information than free websites and are more authoritative. Seek out books to solve specific problems or questions you might still have about foreign exchange.
5. Open up a foreign exchange account with a reputable brokerage firm. Although you can learn a lot from trading demo accounts, you won't experience the full psychological weight of your trading decisions until you start risking your own money. Continue learning about trading as you practice your skills. Exercise risk management to protect your capital long enough for your account to survive the inherent learning curve.