People are introduced to the exciting world of foreign exchange
in many ways: friends, current events, newspapers, television, and many others.
For those of you who are new to forex, the following guidelines cover the basics
of currency trading.
Practice makes perfect:
Demo account trade suggested; brokers demo account was designed to help traders
gain familiarity with the speed and movements of the market. When you are demo
trading, you should learn how to place market orders to enter a trade, place
stop-loss orders to protect your positions, and limit orders to take profits,
place OCO (Open Close Other) orders to execute more advanced strategies.
Study, Study, Study:
Forex traders use fundamental analysis, technical analysis, quantitative
analysis and sometimes a combination of all three to make their trading
decisions.
Fundamental analysis involves the use of economic, financial and political
news to determine trading decisions. Technical
analysis involves the study of Charts
to predict future price movements based on past price patterns and trends.
Quantitative analysis consists of the use of preset statistical models and
properties in quantifying price formations such as averages, retracements as
well as identifying oversold and undersold situations.
Manage your money wisely:
You should always be aware of the amount of money in your account before placing
a trade. If you think a long-term trend is developing, then you should consider
whether you have enough funds to maintain your
margin and withstand any movements against your position that may occur.
We encourage everyone who opens an account ask themselves the
following questions prior to entering each trade:
1) How much am I willing to risk? (Your margin )
2) What is my upside and downside potential? (Stop loss, Take profit)
3) What are the market conditions? (Market volatility)
4) What is the logic behind entering this trade? (Entry)
5) When can I conclude if the assumptions/logic behind the trade are correct
or wrong? (Exit)
Before entering an order, you should consider both your entry and exit points.
One of the mistakes most commonly made by traders, especially new traders, is
letting emotions get in the way of their strategy.
Stay Connected:
It is not necessary to follow the forex market 24 hours day, 7 days a week, but
its
better to be keep yourself in side of market for management of your account.
Live Trading:
Since the emotional factor may be
higher than it was when you were demo-trading (as you are now committing real
money), it is essential that you develop an effective strategy while
demo-trading and plan to abide by it when trading your live account.
Be in Touch with a Consultant:
We encourage you enjoy trading behind a consultant that will
help you in your trading and giving trade ideas and wish you the best of luck!
