Let’s say, you have patience, self-control, but a small capitalto start trading.It’s perfectly fine, you are eligible to start trading in Forex. But the question is what to do to start. If you are eager to make money with your patience, decision-making skill, and prediction power, you must follow some steps. We have discussed the steps that one needs to follow to start FX trading in the next portion. Let’s dive into the detail.
- Arranging Capital:To trade in Forex, younot to invest a lot of money. To open an account and to start, you need around $300. But most of the experts suggest starting with a minimum of $1000, if possible, to start with $2000.
It may sound huge fora beginner, but this amount will help to trade spontaneously. As Forex is a risky market, traders are likely to face loss at any time. So, remember-“The smaller the investment is, the harder it will be to recover it.” Even if they can, they will not have the guts to trade again. So, try to arrange $1000 to $2000 to have a fresh start.
2. Trading with Demo account: FX is a risky market having a complex environment. So, beginners should use a demo account to realize how to trade in Forex. A demo account will allow you to deal in the live market with virtual money to represent what would happen if youdealt with real money. And if you intend to learn things in demo environment, use brokers like Saxo capital markets. Unless you practice with a good broker, you will keep on facing technical problems.
But practicing may not be sufficient for a newcomer. They will need experts’ suggestions and advice.To succeed, traders need to develop their style and strategy, but following the successful trader’s footprint will not be a crime.
- Learning Basic Forex Terminologies: Before starting to trade, you need to learn the basic terms frequently used in Forex. Such as Currency Pair, Base currency, Quote currency, Position, bid price, Ask Price, Pips. Lot, Margin, Leverage, etc. If you Google them, you may find a whole lot of articles and content about Basic Forex Terminologies.
- Dealing with currency pair:The currency pair is the essential part of trading. Currency pair represents the value of a currency relative to the other. The main challenge of trading is to select the right pair. You have to select the asset for researching the market. Your chance of success mainly depends on choosing the Currency Pair.
- Analyzing the Market: Without analyzing the market, you should not start any business. And in Forex, it is a must. Please do not start trading even after selecting the currency pair if you have not identified the current price trend, fluctuation rate, liquidity, speed of price change, etc. There are various kinds of Analyzing tools or Technical Indicators available in the market to help you analyze these, t. The prevalent indicators are- The relative strength index (RSI), Bollinger Bands, Volatility and Momentum indicators, Volume indicator, etc. Before putting one cent in the FX, you need to learn about the analyzers and their use.
- Learning Charts: Charts show us the historical behavior of two currencies graphically. But if you do not know how to read a chart, it will not bring you any good. So, please learn to read the various pattern of the graph. Some popular chart patterns are-Candlestick, Ichimoku, and Head & Shoulders.
- Developing Trading Plan: Now, build your trading plan. As a beginner making your plan will be challenging or likely to be wrong. You can follow the experts’ strategies, lectures of successful traders. But make sure that you have a plan before you start to trade.
Starting is easy to say but hard to do. It requires proper planning and organized preparation. We suggest you follow the above steps. Hopefully, your starting will be fresh and sound. And one more suggestion for you- Never stop learning. The forex market is huge to learn.