Posted by forex at 5:51 AM
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Getting Started in Forex Trading
1. Spend lots of time reading and researching the basics of technical trading. Forex offers traders high liquidity and a 24-hour marketplace from Sunday at 5 p.m. EST through Friday at 5 p.m. EST. Forex trading is also very risky. Some studies estimate as few as 5 percent of traders profit from forex trading in the long term. Those that do can make significant gains, but doing so takes deliberate, thoughtful and strategic preparation, and often requires learning painful lessons learned through losing trades. Numerous forex training guides and tutorials are available online.
2. Open a practice trading account. Trading forex with real money is extremely risky. With the wide availability of free practice accounts, you have little reason not to put time into learning to trade effectively. A practice account allows you to develop your preferred approach to trading, to see how forex trading works and whether your trading method is profitable. It also enables you to make mistakes without losing real money.
3. Open a real forex trading account. Many brokers offer online forex trading platforms. Do lots of research to find a broker that has been active for several years and has a good reputation. Opening a new account usually requires the completion of fairly simple application process and the deposit of funds ranging from a few hundred to a few thousand dollars.
4. Consistently implement your predetermined trading strategy. Some day-traders make money entering and exiting trades several times a day, while others get into longer-term trading positions, for weeks or even months. Forex trading occurs through currency pairs. You buy one currency, or sell it, relative to another. You enter a position based on your expectation for which direction a currency pair will move. If the pair moves in that direction and you have an accurate profit exit point, you can make money on winning trades. Perhaps more importantly, you need tight stop-loss orders to reduce losses on bad trades.