Trading the financial markets is very exciting. There are many different markets to trade but today I want to focus on the foreign exchange market, or forex for short.
The forex market has been around ever since human beings have been using currencies. These currencies would often get exchanged for others, creating a market of buyers and sellers. in the age of the digital world it has become more accessible to more traders who wish to trade in this vast market.
If you are interested in joining this great market and start trading forex, I would like to give you some tips so you will have a good experience.
1. Forex broker – First thing you need to do in order to trade forex is to sign up for a trading account with an online forex trading broker, like Fibo group, that will provide you with direct access to the market. You need to make sure that the broker you are using is regulated by a decent regulatory body like the FCA or NFA so your money will be safe and the broker won’t be able to scam you. This is very important and it will give you a vital extra layer of protection.
2. Account size – It’s pretty obvious that you want to make money trading forex. For this reason it’s very important that you fund your trading account properly. With this I mean you should have an account that is large enough for you to be able to make a decent amount of money without risking a lot in the process, but it should be money you can afford to lose. For example, if you have $30k that you are saving and you can afford to lose $10k then open an account with $10k. However, if you are working in a job that makes you $10k per month, you should not quit it to open an account of $10k as the chances of you doubling your account size every month are slim.
3. Leverage – Most forex brokers allow you to trade using leverage. The standard in this industry is 1:100 which practically means that if have $2000 in your account you can open a $200,000 trade. While it looks very tempting you should always remember it is a double edge sword. The leverage also works against you and you can find yourself losing money quickly if the leverage is too high.
Use these tips when trading forex and you will reduce your chances of losing a lot of money.read more