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Some Forex Investing Titbits You Could Profit From

The surfeit of information on forex trading is always likely to overwhelm a novice forex trader. Let us assume you have read everything on the basics of the forex market starting with these articles. Let us also presume that you continue to have a healthy appetite for furthering your knowledge on forex trading.

Forex Trading Platforms

So when the forex knowledge you have gathered makes sense to you, go ahead and choose a broker. Of course your decision on choosing a broker should also be based on your trading needs. For example, if you don’t have much money to invest in forex trading you should go in for a broker that could provide you with a micro account. In such a scenario you have got to make sure that there are no hidden fees on your trading account. For example it would be ridiculous if the maintenance charges were to eat away your entire monthly profits.
Once you have selected a broker, you would of course open a demo account with them. That gives you an opportunity to check out the brokers’ online trading platform in terms of live feed, the accuracy of their price quotes and charts, and of course the extent of knowledge base the broker could provide you with. This is essential for carrying out your trading strategy.
Ideally your broker should provide you a trading platform which has a graphic interface to draw trend lines in the charts. Other points you should check out include, the ability of the trading platform to enter orders, add and change stops and limits, the capacity to manage a trailing stop, and the ability to close a trade quickly if the market starts moving against you. These are essentials or accessories your trading platform must have.

Start Paper Trading

Let us assume that you are interested in a particular currency pair. Study that currency pair in great detail. Then start paper trading. EUR/USD and GBP/USD are generally preferred by most traders on account of their high volatility creating greater trading opportunities. The best time for trading the European markets is about five to seven hours before the US markets begin their trading activity. Of course this depends upon your time zone. That would mean getting up in the morning say 3 or 4 am and that sometimes could be troublesome. So perhaps you could start working on USD/JPY as Japanese trading time would correspond to late evening in the US. Always keep watching the chart of the currency pair you are interested in to figure out if it is the ideal time to trade. Start with the long term charts before moving to the short term charts. If the parameters strike you as ideal to enter a trade, do so forthwith. That is the way to start trading.
Remember you have been doing paper trading all this while. Of course this is just an approximation of what you would encounter when real money gets involved. Although it is not quite the same, nevertheless paper trading will teach you the dynamics of the forex market.
Never quit paper trading even if you feel you have learnt enough and have reached the number of pips you have set yourself as a target to be achieved. Even then, continue paper trading as it would help you to iron out other flaws in your trading strategy. Sometimes it is worthwhile to have a paper trading account even if you have a real account as you then get an opportunity to try out your strategies in the paper or dummy account on a simultaneous basis.

Trading in a real account

Now you have come to the stage you can start your real account and begin trading with real money. Preferably start with a small trading account as it would be less stressful for you. Once you are able to cope with the profits and losses coming out from the smaller account, go ahead and open a larger account. When you walk your way from a smaller forex trading account to a larger account, you would in effect be learning a whole lot of intricacies of forex trading.
It is only when you are confident and comfortable with the simple techniques outlined above should you venture to study other aspects of forex trading whether it is Fibonacci retracements, Bollinger bands, Elliot wave or Moving Averages or any of the numerous technical and fundamental analysis parameters.

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