FOREX has been around for decades, and it is still a magnet for millions of people. Since the 1990s, experts have developed plenty of trading strategies for this largest financial market. Still, making the first step may be daunting. Follow these simple tips to get a head start.
1. How to Use a Demo
Every aspiring trader should master the simulator. This market has many variables, so preparation is mandatory. Creating an account is a piece of cake — just enter your basic contact details, and the broker will generate a login and password. Learn how to create Olymp Trade demo account in this guide, and start practising immediately.
Different brokers offer different software, but the core functionality is the same. Your demo credentials will unlock the terminal and the training mode. You will be able to use any features, and the broker will provide virtual money to work with. No deposit is required, and no profit will be made at this point.
A demo is a priceless opportunity to see how trading works in practice. The market is constantly changing, and making decisions with real capital is stressful. Build confidence in the trading simulator, and switch to a live account when you are ready. There is no pressure, as this service is absolutely free.
2. What Strategies to Choose
The diversity of Forex strategies may be frustrating. Unfortunately, there is no universal system for guaranteed profit. Every trader should choose a method that corresponds to their lifestyle, risk tolerance and stress resistance.
Some systems (for example, day trading and scalping) are highly demanding. They require you to monitor the market for hours and make quick decisions throughout the day. Styles based on bigger trends are less strenuous.
Here is the rule of thumb: try different strategies in the demo mode and choose the one that feels the most convenient. Begin with the safest methods, and always protect what you have. Stop Loss is a given for any position. Keep a journal to keep track of performance. If the current system does not seem to work, try another one.
3. How to Limit Risks
Risk is the biggest drawback of Forex trading. This market is moved by fundamental forces which are beyond anyone's control. Your financial results depend on your foresight, but even professionals face losses sometimes.
To limit exposure, use stop loss and diversify your assets. Never risk more than 1% of capital per trade. Do not focus on a single currency pair, either.
As you become more experienced, add more instruments gradually to assemble a solid portfolio across markets. This way, you will compensate for losses with profits from other instruments.
Education, strategy and risk are crucial aspects for any beginner. Register a demo with a trusted brokerage, and take advantage of free educational resources. Learn from the best and monitor your own performance to see which techniques work best.
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