Forex trading has become a remarkably exciting prospect to most business entities and individuals through the past two centuries. It has definitely proven rewarding venture if handled correctly thus leading to an influx of traders from all walks of life. The internet has especially made it easier for any average person to get access to these markets worldwide through online platforms that facilitate forex trading. You might as well be wondering how you can possibly join the bandwagon and possibly launch an exciting venture into the world of forex. This article is purposed to providing you with just the tools you need to get your foot forward and start trading forex. So now let’s get through the steps.
1. Find your broker
Choosing a broker is far from mere guesswork. You will have to do a little homework to ensure that you find a broker that satisfies your interests, and most importantly, to stay protected.
So what are the crucial issues you need to look at in a broker?
In the realm of forex trading, safety should always come first. You will need to make sure that your capital or investments are protected. Forex trading seems to be a regulated market around the globe especially when it comes to financial super powers like the US, Japan, and the European Union. Being regulated implies that there are systems in place that make sure the trade activity is taking place in a controlled manner which is essential to keep making sure that the markets are regulated. These systems encourage broker licensure which is important when anything goes wrong between you and your broker. The downside of being a client of a broker who is not licensed is that you are only protected by the contractual terms which may not cover all the protection you need as an individual. Having considered this, it therefore follows that it serves you with a lot of advantages when you register with a broker who is registered.
B. The type of order execution
Upon considering the issues to do with regulation, you progress to choosing the order of execution associated with the broker. There exists two orders of execution associated with brokers. There is the dealing desk broker and then there is a no dealing desk broker.
The difference between the two is that the former functions as a market marker who has a high degree of control over you’re trading through being responsible for creating markets, keeping your money and granting rewards whereas the latter functions as no more than an access point to the market. In other words, the former involves a situation where you are dealing with the broker only, while in the latter, you are trading with other traders where the broker assists with making your orders available to the community of other traders.
It is well established that most traders prefer no desk dealing for this reason but it does not essentially mean that desk dealing brokers should completely be written off. Desk dealing brokers are safe as long as you make sure that they have all the required licensure from authority and regulatory bodies. Moreover, desk dealing brokers can be faster than non-desk dealing brokers thus making them ideal if the speed of order processing matters a lot to you.
2. The trading account: how to start a forex account
Having selected the appropriate broker, the next step is choosing the nature of the account you will be using for your transactions. Brokers usually have variations of accounts and the one you choose solely depends on your perceived and plan. This takes us to some of the commonest questions related to the amount of money one is supposed to start with:
How much can I start with a forex account? Can I start forex with $100?
There are what are known as micro accounts that are basically designed to let you trade with rather small amounts, as low as $100. These accounts allow trading with small volumes and one of the key advantages they provide is that they can provide a lot of leverage thus enabling you to trade with high profits. As a precaution, it is also important to know that much as they can provide high profits they can also lead to huge losses on your part.
Apart from micro accounts, there is usually standard accounts which also provide additional services like trading base on CFD's, metals and energy futures.
Other worthwhile features that you can consider are some bonuses offered by some brokers. The most popular is the ‘forex free $100 no deposit bonus‘ which involves getting an automatic $100 from the broker without any requirement of an initial deposit. Click here to get $1650 no deposit bonus
3. The capital
When it comes to this, there is a universal rule. Always be prudent, don’t trade on the funds you can afford to lose. You should always remember that trading can be a risky business and if you are not careful, you can lose a significant part, if not all, of your capital. This should only be followed at the beginning of one’s trading career. It should be applied all the way as most traders who just starting out tend to be cautious but end up losing it all after tasting the dividends brought by a patient and cautious approach.
4. Get used to the platform
After getting done with all the registration and other considerations, it’s time to get one acquainted with the platform in question. This comes in handy especially to the trader who seeks to use a technical analysis approach or strategy. In this case, the trading platform is beyond a tool for placing orders as it happens in the fundamentalist’s case. It also functions as a tool for analysis through various charting methods and techniques.
5. Kickstart the trading process
After considering all the necessary factors, it is now time to start implementing the trading strategy .It is important to note that the learning process never comes to an end. The focus here should be mastering and perfecting the various trading tools that you may employ to assist with the decision making.