10 Tips For Forex Beginners

25 Jan

 Forex beginner1. Currencies are traded in pairs, unlike stocks and commodities. In stock trades you buy a single instrument, but in the Forex market currency you buy two pairs for example EUR / USD, USD / JPY. Thereby for knowingly trading you should find information about both countries.

2. Currency trading is cheaper than any other financial market because there are no fees. The only costs perceived are market maker spreads. As costs are reduced the more profit you get.

3. Take a demo account before entering the actual trading. Using a virtual account you can learn more easily and without loss how to avoid the most common mistakes and you can get used to the trading platform before investing and risk exposing yourself.

4. Educate yourself. The view that it is better to learn fromyour mistakes and your own money is very wrong. It is better to find out as much information about the market before you throw headfirst.”

5. Find sites with information about each country. There are many website which provides information on all current currencies in the FX markets, where you can get the data necessary for making a correct investment decision. You just have to look.

6.Open from the start a “mini account”. Many investors will begin with a “standard account”, but this is the easiest way to lose your money faster. Trading volume is so large, in terms of control units, that if you are wrong even a bit you lose everything. Statistically the same transaction losses of a standard account are 10 times higher than those of investors with small accounts.

7. Make an Account well capitalized”. Many investors are wondering “With how much should I start to trade?” Instead of asking “What value is more practical to start trading?”. Most commonly mini accounts should be started with at least 3,000 to $ 5,000, but brokers allow investors to begin even with 200-300 dollars. Low capital = a higher percentage of capital risked on each trade.

8. Start with small transactions. This advice refers to placing one order at a time. In time with the gathering of information and obtain profits, transactions and their number may increase substantially simultaneously.

9. Risk 1 to 5% of the maximum account. If you will have to risk too much capital in a transaction this means that you do not have enough money in your accont or Stop Losses are set too high.

10. Start trading the most liquid currency pairs in the market. These pairs will have the lowest spreads between buy and sell quotes: EUR / USD, USD / JPY, GBP / USD, USD / CHF, EUR / CHF.

Source: http://www.analize-forex.ro

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