Back in the day, being a beginner in the forex market was way more challenging. Because not everyone was able to freely access the forex market due to the limitations in technology. Read More
Trading is surely challenging in the fast-moving forex market which is full of opportunities but they come with the risk of losses. The careless mistakes we tend to make in the initial phase of our trading career just make it even more challenging. To avoid such costly mistakes, you have to walk on eggshells and make wise choices. In this blog, I will share some simple tips that can help you to secure success as a new forex trader. When it comes to selecting a suitable forex broker, you have a lot of options to choose from which is great. However, many beginners don’t do enough research before picking their forex broker. They just open an account with a popular broker that they come across or just the names that are suggested by any fellow traders they see in forex forums. Some even select their brokers after seeing an ad on social media. They don’t even look at the reviews, regulations and trading conditions offered. Now, how can you expect to end up with the right broker when you just blindly follow the crowd without checking the broker’s platform and services? Suppose you sign up with a broker that your friend suggested but the trading conditions are not the best to complement your trading style. When you are not satisfied with the trading experience on the broker’s platform, it will be reflected in your trading performance and results as well. To avoid such a situation, you have to check a few things before finalising your brokerage. Your forex broker is like your gateway to the decentralised forex market and the platform that they offer for trading should be beginner-friendly and easy to navigate. MT4 and MT5 are the most used trading platforms among forex traders and MT4 is especially popular because of its simplicity. But those who want additional tools and advanced features prefer MT5 and it can also be used for trading in multiple markets with ease. MT5 can be perfect for those who want to try algo-trading. You should also check if the broker offers different versions of the platform for downloading on the web, desktop and other devices like smartphones. The mobile app versions are very convenient for those who travel a lot. You need to install the iOS version of the app for trading on the iPhone and Android users should download the Android version for trading on the go. There is nothing more important than the safety of your funds and a secure trading experience is something that you have to ensure with the chosen broker. A licensed broker makes you feel at ease in these aspects as they are under the regulatory oversight of a top-tier financial authority. This regulatory body is responsible for checking the broker’s compliance with the industry standards and protection of the interests of their clients. Features like negative balance protection make you feel at ease while trading with leverage. Apart from this, you should also filter your options based on the brand reputation of brokers. You should reach out to their customer support team to get clarification about anything that you are doubtful about. For example, most brokers have the licence to operate in specific jurisdictions and they cannot accept clients from certain countries or don’t support some specific currencies for funding. The prices and speed at which your orders get executed on the platform have a lot to do with the broker and type of account you choose for forex trading. The bid and ask prices have to be favourable and for that, you need to find a broker offering tight spreads. Just the spreads being low is not enough as the commission can also add up to the cost of trading. So, that’s another thing to consider for picking a cost-effective broker and this way you can avoid paying hefty charges. The minimum account deposit should not be too high as you won’t feel comfortable risking a lot as a beginner. Starting small is the best approach and it is safer to do so when you are trading for the very first time. For account types, the broker may offer you a bunch of options like a regular account, premium account and more to pick from. I will suggest you try the demo account first before anything else as it is essential to get familiar with the real time market conditions and polish your trading skills. Last but not least, you must be well aware of the risks that you have to manage as a forex trader. If you jump into trading without understanding the risks, you will be in a dangerous position. There is not much you can do about the unpredictable market scenarios but you can be prepared to face them without panicking. You should not be running away from the risk of trading as being risk-averse will not take you anywhere in the volatile market. This does not mean that you have to risk everything without any thought. What you have to do here is take calculated risks based on your own risk profile. Some traders are fine about losing $1000 while some of us, this is the total account balance before trading. Hence, your risk should be at a level that you are comfortable with. The 2% risk per trade rule reminds us to minimise the risk per trade and that way, the losses will be under limit. You should not take things lightly while trading in the live market and giving into your greed is like signing up for huge losses. It is good to be ambitious but you have to be realistic and rational too. Imagine a trader has $100 capital and expects to make $1 million in a month by trading with excess leverage. The overconfidence and over-exposure to risk do not help in reaching such unattainable goals and the trader will only be disappointed in the end. In the end, all the risks and challenges that you will face as a beginner in the forex market can actually help you to grow and do better if you overcome them through perseverance. Being open to the possibilities and getting rid of your limiting beliefs can make a lot of difference to your trading experience. Securing success would be easier for those who have a realistic approach with an optimistic outlook. Tips To Choose A Forex Broker
What To Check For Choosing The Best Broker?
Be Aware Of The Risks Before Trading
Final Thoughts
Back in the day, being a beginner in the forex market was way more challenging. Because not everyone was able to freely access the forex market due to the limitations in technology. Read More