While amateur share trading has become an increasingly popular and mainstream activity over the past few decades, the area of Forex trading has been left largely in the hands of the experts. The average man or woman on the street has, perhaps, seen it as something of a specialist art that is better left to the investment bankers and city slickers.
Over the past few years, however, this perception has been gradually broken down. Turbulent forex markets provide the possibility for significant gains, and simple apps to facilitate trading have made it just too good to keep ignoring, particularly in this age when traditional investments and pension funds are showing such uninspiring returns.
Everyone knows that there is risk to any investment, and values can plummet as easily as they can skyrocket. How can you get your burgeoning forex trading off to a successful start?
The right platform
There is no end to the list of websites and mobile apps that are available for forex trading, and a good many of them are free to download and use. Take your time evaluating the options and find one that lets you open a demo account, so that you can practice your trading skills without risk before you get started.
The right broker
Equally important is working with a broker you can trust. Again, there are plenty out there, but you can use a comparison site to find the Trusted Forex Broker that is right for you. When you make your selection, make certain they are regulated by a body such as the Financial Services Register (FCA).
Manage your cashflow
In any new enterprise, cash is king, and running out of it is the biggest risk. So while of course you will be trying to build a strategy that makes money, don’t get so caught up in the excitement that your capital disappears. After all, if that happens, it’s game over and no more trading. One of the first things you will realize is that some trades go badly. Even the most experienced and successful traders will tell you that’s just the way it is. This is why even top traders limit their risk exposure on a single trade to no more than two or 2.5 percent of their overall trading account balance.
Keep your head
The fact that unsuccessful trades can and will happen from time to time doesn’t just risk your money. It can also do funny things to your head. It is important not to get frustrated and start chasing those losses with higher risk strategies on future trades. Do that, and you suddenly find you have thrown all strategy out of the window and turned into a latter-day Nick Leeson.
When it comes down to it, your actions must always be based on those financial principles you were studying when you drew up your strategy. If your heart starts overruling your head, it’s clearly time to walk away, have a cup of coffee, cut the grass or do whatever it is that helps you relax, then return to the action with your head clear.