Posted by forex at 3:20 AM
Read our previous post
Trading in the Currency Market
1.
Find a broker affiliated with a regulatory body
Find a broker who is incorporated in the United States or in the United Kingdom, because brokers from those countries are more likely to be regulated. Research the size of the broker, his financial institution affiliations, and the amount of capital he has. (Go to websites cited in references 1 and 2 below to obtain this information.) Your money is safer with a broker that is regulated in at least two major countries, and your trades are more secure with a broker that has secure and stable trading platforms.
2. Check the website of the Commodity Futures Trading Commission (www.cftc.gov), which is an independent agency of the U.S. government, to access financial statements of registered Future Commission Merchants (FCM) in the U.S. You can also file complaints and report suspicious activity of brokers. The equivalent authority in the U.K. is the Financial Services Authority, which provides similar information.
3. Sign up for several brokers' demo or practice accounts before selecting a broker. Learn how to use the trading platforms. The demo trading platforms have the same functionality as the live trading platforms, allowing you to choose the plaform with which you are most comfortable.
4. Research every trade you make. Be able to justify why you traded as you did. Read books on the basics of forex trading, and make sure the information includes technical analysis (forecasting prices by studying past market price and volume data) and key fundamental news alerts and events. Bookstores such as Barnes and Noble and the online bookstore Amazon.com carry books on trading in the currency market from beginner level to advanced level.
5.
Newspapers contain the news that moves the markets.
Read as much as you can to stay abreast of events. Scrutinize newspapers such as the Financial Times and the Wall Street Journal daily, because they contain international and domestic news. Markets respond to politics and other nonfinancial news, so utilize news sources such as The International Herald Tribune, or go online to check major news sources such as BBC, CNN and SKY.
6. Learn the tools of the currency markets trade and use them when trading. Don't try to outsmart or go against the markets; you will lose a lot of money. Market trends follow the underlying economic cycle, which is long term, lasting weeks or months. Short-term trends are random, volatile and difficult to follow. Moving an established trend in the opposite direction requires billions of dollars. Buying into a forex signal provider may help detect trends, but be sure the signal provider supplies trend signals and not long-term fundamental signals.
7. Determine your best trading style and exploit what you read and learn. Use technical analysis and fundamental analysis, which focuses on the overall state of the economy, interest rates, production and earnings. Learning and incorporating these things into your trading style before putting your money at risk will give you a head start.