Forex trading is a thrilling, exciting, and exhilarating way to invest money, but at the very same time, the forex market can prove to be a cruel mistress. With real capital riding on the line with every trade you make, you need to address the market with the utmost seriousness. For that reason, after opening a forex account, there are certain things you need to do in order to make sure that you can trade effectively.
1 – Make use of a demo account
This is far and away the most overlooked aspect of any forex account, as many novice traders simply don’t understand the true value of a demo account. The uses of a demo account are nearly endless, as they allow upstart forex traders to engage with the markets without the need to risk any real money. Based upon virtual currency, these dummy funds can be used to practice strategy, monitor currencies, and so much more.
2 – Get a feel for the platform
There are multiple trading platforms out there, with each carrying various pros and cons. Before you start throwing money around here, there, and everywhere, look to explore the platform, addressing its features and controls. Having a feel for the platform (especially in the case of the super popular MT4) can help you trade in a much more instinctive fashion. This can save you crucial seconds during important moments, which—as most experienced traders will attest—can prove to be the difference between profit and loss.
3 – Study the market
Forex trading is anything but luck-based; it takes both skill and knowledge to become a successful trader. In spite of what you may hear elsewhere, the likelihood of stringing together successful trades by sheer chance is minimal at best. Knowledge truly is power in the forex domain; it is the task of every trader to do all he or she can to stay ahead of the curve. Monitoring newswires, breaking down charts, and casting your eye over economic reports are all essential in your efforts when it comes to studying the market. Remember—with the right know-how, you can spot profitable trades that other less-informed traders may just miss.
4 – Formulate a currency watchlist
Another element within a forex trading account that often goes underutilised is the watchlist feature. What this allows you to do is to handpick currencies (and cryptocurrencies if that’s what you prefer) and monitor them without the need to search them out each time you log into your account. You’ll also find that many forex broker accounts allow you to implement a notification system that links to your watchlist. This means that when a currency hits a predetermined price, you’ll be immediately notified, which can certainly help you stay on top of what’s happening within the forex market.
5 - Create a Trading Plan
Lastly, we really can’t stress enough just how important it is to have a trading plan in mind before you dive into the forex market. Trading blindly is one way to see your capital evaporate in a flash, so you need to make sure you are ready for the task at hand. Take the time to assess your attitude towards risk, your working capital, and your working knowledge of forex trading and then look to match that up with the countless trading strategies out there. If there is one thing that you can’t afford to ignore, it’s a trading plan, as without one, you are depending on luck, chance, and circumstance, which means that your time trading forex will probably be short-lived.
Trading forex is certainly a way to invest money that can reap profitable results, even if every trade does have a certain degree of risk attached to it. However, becoming a forex trading success story isn’t something that happens by chance. Next time you open a forex account at a reputable forex broker, remember to do the above five things before you do anything else; that way, you can really put your best foot forward.
The information provided herein is for general informational and educational purposes only. It is not intended and should not be construed to constitute advice. If such information is acted upon by you then this should be solely at your discretion and Valutrades will not be held accountable in any way.