How to Complete Your First Forex Trade

Before you consider forex trading as the solution to your financial worries, it is important to understand that there are no guaranteed results. Just as you don’t always win at the track, you won’t always make money with trading but when you do, you can make a fair amount of money. Foreign exchange (the principle in which forex trading is built on) is simple enough to understand. You use currency from one country and trade it for the currency of another. However, that doesn’t mean that it’s as simple of a process as it seems. Through careful guidance and planning, however, you can be on your way towards financial freedom through forex trades.

In order to begin your trades, you will need a forex broker. There are literally thousands of brokers available on the internet, and they have varying requirements for service that must be met. Most have a minimum deposit amount. Just like with gambling, a safe practice is to not put up more than you can reasonably afford to lose. Although your goal will be to keep the money and in fact make more, that can’t be guaranteed.

Once you have secured your deposit amount and selected your broker, you will need to do a little research into the market. Many brokerage websites will offer instructional courses on forex trading for free or (relatively) low cost. Use these! While they won’t guarantee your success, you have a better shot if you’ve done your homework.

If you’re still not comfortable with the idea yet, demo accounts are a decent place to start. You won’t be able to make any money in these demo accounts, but you also won’t be able to lose any (provided you’re chosen broker doesn’t charge for this service most don’t). These demo trading accounts will not make you an expert, as it takes years of planning, research, and education to consider yourself an expert trader (and we typically call those “brokers”). However, if it’s just a bit of confidence that you need, demos will empower your sense of competence.

Now that you’ve secured your deposit, picked a forex broker, researched the market, and practiced with a demo account, you are ready to do your first trade. This process will be very similar to trading on your demo account, having the bonus of a professional broker to consult with before making decisions. Many brokerage websites use one of a few popular trading platforms. These platforms will have an area that allows you to see the market trends for your chosen currencies – these charts are vital to successful trading. The general rule is that upward trends tend to stay moving upward, and downward trends tend to stay moving downward. (The second rule is that there really are no rules, only standard observations, but that’s another story entirely.)

Once you have decided the currencies that you wish to trade, based on your research and the input of your broker, you are ready to place the order. It is recommended (but not usually required) that you set up your stop-loss and take-profit amounts to ensure that you don’t get wrapped up in the excitement of trading and lose an unnecessary amount of money. You can opt to manually manage these things as well, but as the market is ever-changing, it can be tough to ensure that you reach your goals. In fact, you probably won’t become rich off your first trade even if you do everything right and that’s ok! It’s much better to start small and work your way up as you build your confidence and experience with forex trading.

Categories: Tutorials

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Comments

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