Anyone can start trading forex. All you need is a little knowledge, a relatively small capital and the determination to learn and constantly improve. It’ll help you if you develop patience and perseverance. Forex trading is an art, and although we say that anyone can start, there is a difference between getting started and succeeding in forex trading. In this article, we’ll describe the steps that will help you succeed as a forex trader.
1. Attend a forex course
Undoubtedly, taking a forex course is a prerequisite for success. Going into forex trading without any knowledge is a sure way to get rid of your money quickly. A Forex trader needs to learn how the market moves. If you look at the charts, you’ll see how confusing and confounding they can be to an inexperienced trader.
2. Open a broker account
It’s important to know what to look for when choosing a broker. We recommend opening an account with a regulated broker. This means that the broker you choose is regulated by your country’s financial regulator and must follow the financial regulator’s rules, which means you can protect your money from possible unscrupulous practices. Unfortunately, many beginners who want to get into Forex trading don’t know this information.
3. How much trading capital do I need to trade forex?
Not as much as you might think. With most brokers, you can start with a minimum amount of $100 to $300. Realistically, such a small capital makes it harder for you to make progress. If possible, it’s better to start with a minimum of $1000 and up to $2000.
With a larger trading bank, you’ll a bit of a buffer. However, it’s still better to trade with a small percentage of your capital with micro lots. Good money management also reduces the risk of margin calls if your balance gets too low and you have open trades that make losses.
Create a trading plan
For anything you want to be successful at, you need a plan. As a forex trader, it’s downright crazy to jump into the market without a plan. It’s like taking your first driving lesson on the Arc de Triomphe traffic circle in Paris.
4. Choose a few successful forex strategies
Without a strategy, you might as well wear a blindfold or throw a pin into the market. You need to know 100% what you’re looking for on the charts and apply the following:
- You don’t trade if you don’t see the signal for the strategy
- You enter the trade when you see the signal for the strategy
This may seem like common sense. Of course, you think, I’m going to do both of these things. But in the heat of the moment, momentum takes over. Later, you look at the charts and ask yourself, ‘What was I thinking?
On the other hand, you wait too long and wait for the secondary confirmation of your strategy signal. Then you look at the charts and ask yourself, ‘What was I thinking? Do you see a pattern here?
You’ll think that this won’t happen to you. Well, it’ll. But if you have a solid trading plan, you increase your chances of not having to ask yourself that question after the fact.
5. How to practice forex trading
We recommend that you spend as much time as possible trading forex. Try out all aspects of trading in your demo account. Work with all time frames, from one-minute charts to daily or even weekly charts. Develop the curiosity of a child who isn’t afraid to try things out. Add different technical indicators and learn what they do and if they complement your trading strategies.
Choose a handful of forex strategies and backtest them all. Which ones caused frustration or were hard to see a clear signal on the charts?
You know that anyone can start trading Forex. But we hope you now realize that becoming successful in Forex trading is a journey and a process. It requires patience, discipline and commitment.
You have to persevere even if sometimes you can’t seem to get anywhere with your trading. And there’s something to be said for hanging in there when all the other newbies in forex trading have given up, burned out, and are sore from the daily beating of the forex market.
If you keep at it and always learn from your mistakes, you have an excellent chance of succeeding in the forex market. You can enter with a little capital, and all the decisions are yours. You decide how much risk and leverage you want to take on your account. You decide which currencies you trade and when you trade.