Posted by forex at 9:21 AM
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1. Learn how the foreign currency market works. Learn the vocabulary of forex trading and get up to speed on the countries whose currencies are traded most frequently. Study the earnings trends for major currencies that dominate the international economy. Pay particular attention to events that resulted in extraordinary profits and losses for major currencies.
2. Investigate the problems in this industry. The United States Commodities Futures Trade Commission receives thousands of complaints annually about unsavory business practices, unscrupulous brokers and outright fraud. Read the Fraud Advisories on its website before you invest your money in forex.
3. Sign up for RSS updates from trading websites and other trusted financial advice sources. Get answers to your questions by participating in forums and discussion boards. Allow some time to digest what you read about potential profits and verify the information by tracking the currency market for a couple of weeks or more. Track currency trading prices on a spreadsheet.
4. Develop a plan of attack based on your research and results. Open a practice account and practice trading with only those currencies that you researched. Listen to the hype, but do not get caught up in a trading fever.
5. Anticipate financial market changes that could affect your earnings. Research commodity prices, mortgage interest rates, major trade agreements, stock and mutual fund activities that affect currency rates. Currency trading does not stop on weekends or for most holidays. Because of international time differences, a market is open somewhere in the world 24 hours a day.
6. Search for reputable currency dealers while you are learning about this industry. Get recommendations from other traders or trusted websites. Specialize and invest small amounts of money until you prove your theories. Review your results as often as possible. Expand to one additional currency pair at a time, after conducting the proper research yourself.
7. Limit your trading when the market is volatile. Reliable currencies that lose value one week are likely to rebound over time. Growing your currency portfolio slowly is the real key to successful trading. Don't worry about missed opportunities that you don't feel comfortable with or those that don't fit your profit strategy.