In this concise guide to Forex trading, we will present the tips and best practices to follow to trade Forex efficiently and safely. Also, we show you how to carefully analyze brokerage offers to choose that corresponds to established financial strategies and objectives.
The importance of a Forex trading plan
Any investment should include a trading plan. But why is the trading plan so important? Here is a clear explanation. Like in any business, you need to have a road map in order to know what your KPIs are and how you will achieve your goals.
Any investment deserves an upstream reflection on the conditions under which it will be carried out. Forex is no exception to this rule. It is essential to establish a Forex trading plan before placing your first deposit.
Such a plan consists of a trading strategy part and a risk management part. However, this plan is not set in stone. It evolves according to the re-evaluated objectives and new technical skills.
Here we will give some examples of the central elements of such a Forex trading plan:
- The maximum amount allocated to each position;
- A deadline for reaching the determined financial objective;
- Disciplined monitoring of each position, of each trading session;
- The conditions required to open a position;
- The conditions required to close a losing position ( Stop Loss) or to close a winning position ( Take Profit).
Forex trading: choose wisely the right broker
Forex experts agree that the first step to success in the financial markets is choosing a trustworthy Forex broker that is 100% tailored to your specific and unique needs. We have listed below essential criteria to which it is necessary to pay special attention before depositing money with a broker to trade currencies.
Online Forex trading tools and platform
Here are several things to pay attention to before opening a trader account:
User-friendly trading platform
A user-friendly interface is ideal for beginner customers with intuitive access to the main sections: customer account, portfolio, chart, etc.
Mobile trading perks
Few of today’s brokers do not offer a mobile application for their trading platform. But with varying qualities. And traders need to have anywhere, anytime and under identical conditions access to the markets, news, and their assets. That’s why the possibility of mobile trading is also important.
Trading on a demo account
Using the demo account has several advantages for beginners and professionals.
First, it is a great way to master the online Forex trading platform offered by a broker. That’s an opportunity to discover all the functionalities available in real conditions:
- Technical indicators.
- Opening and closing of positions.
- Risk management (including take profit and stop loss).
Second, the demo account makes it easier to learn Forex trading by disregarding the biases of trader’s psychology: fear of losing money, poor management of emotions following a losing trade, or even unrealistic ambition to make more profits.
The use of the demo account offers ideal conditions for training in peace and without stress: testing of a trading strategy, zero impact on bad decisions, learning coherent money management, and gaining confidence in its trading capacities.
However, you will never know what’s in store for you when it comes to Forex if you don’t switch to trading on a real account. Give yourself time to learn the ropes on a demo, and then try your hand by depositing real money and join millions of successful currency traders worldwide.