If you are interested in Forex you should know that it is part of financial market implying speculations on currencies rise and fall. Any of speculative markets is connected with a risk of money losing. Forex market in this connection is one of the most risky ones, that is why before taking a decision on entering trading be ready to lose certain amount of money that was meant for gaining profit. If you are not ready to loose money you should better look for another way of their multiplying, for example – bank deposit. Choosing this case it is enough for you to read just the first tip.
Be emotionally prepared for possible loss of your capital.
All Forex market participants may be divided into two big groups according to their “approach”. The first group is the people desiring to quickly earn maximum profit from deposited money without much time, energy and finance spending. The second group is people thinking of Forex as of a serious financial market, deeply studying theory and ready to spend much time and efforts to acquire experience and after some time to begin getting essential and permanent profit. So before entering the market you should determine for you which approach is yours.
Determine beforehand what you intend to get from the market, within what period and with what risks and losses.
Depending on the chosen strategy of trading Forex you should determine the time you are ready to spend for studying Forex market. If you want to get quick profit it will be enough to read 200-300 pages book with general terms about Forex and to get started then. More serious approach requires studying maximum of the available information for the complete understanding of all market principles, instruments and methods of market analysis and forecasting that can increase quality of your trading.
Devote maximum time to theory before starting practice.
It is also essential to devote certain part of your life for participating in trading. The time spent for studying the current information, market forecasting, analysis of your results is directly proportional to the profit gained. Ill-considered operations rarely lead to positive results. And even gained profit may be lost in future operations without analysis and systematic work. Everything depends on time. While serious approach Forex trading becomes a profession. Hence serious approach to trading presumes spending much time on it and you should decide the measure to which this work corresponds to your life style.
Determine how much time of your life you are ready to devote for Forex trading.
The most important step before taking a decision on entering Forex is determining of capital amount which you are ready to risk for gaining profit. So never deposit in trading more capital than you are ready to lose. The possible loss should not be a catastrophe for you. Forex market is either risky game for people having free capital and who are ready to loose them or long-lasting and painstaking work on gaining skills that in future may bring essential income.
Be ready for better but expect the worst.
After you have finally taken a decision about trading Forex you face another stage – choosing broker via which all your operations will be conducted. Before starting you should also spend enough time for choosing a proper partner. For this purpose collect as much information as possible about all brokers, their financial conditions and reputation. Various brokers offer various commissions, spreads, interests and software for trading. Attractive financial conditions should be supported by good reputation and long lasting term of operation on Forex.
Select your broker as if you selected a bride.
While choosing broker besides studying financial working conditions it is necessary to test program software that will become an instrument for the realization of your will. Different brokers offer their own programs written on various languages and having different degrees of reaction, reliability, usability and various set of analysis instruments. Practically all brokers have demo versions of programs and some of them – to participate in free contests with material prize fund. Be sure to spend at least month for demo trading combining it with market theory investigating and implementing the received knowledge on practice. This will help you check quality and convenience of trading platform as well as estimate one more time the necessity of entering Forex market. Analyze constantly the results of your work and services quality. The only one important condition is that on demo trading you should treat virtual money as if they were real.
Estimate your prospective partner as well as your own qualities and knowledge in demo trading.
While demo trading, try to distinguish instruments and informational sources which you will use while making decisions on operations. You should also determine tactics of operations carried out by you before real trading. How often you will open positions, for how long your positions will be opened and what will be the size for limiting the possible losses on operation – these are questions, answers to which will essentially influence final results. While trading you should have your own trading system. Unregulated trading is a direct way for losing your capital.
Work out your own system of successful trading and strictly follow it.
Only choosing trading strategy, tactics, and trading system will not guarantee 100% of your operations to be profitable. It is important that quality and total result of profitable operations exceed also the number of unprofitable ones. Nevertheless a single non-profitable transaction should not disappoint you. After analyzing the reasons of this you will perfect your own trading system in order to obtain good results.
While starting demo trading you should clearly understand that demo trading is not the same as real trading. While real trading every rate movement is expressed in certain amount of your money and this psychologically influences a person. It is quite logic while the first trading with real money to risk not much than 10% of your capital. This will help you estimate one more time whether your prior decision was right or not.
Prepare yourself for psychological pressure of market.
Thus as in any business the stage of preparing to Forex should be consistent and overall. Only when you are able to say that you can enough and feel enough strength you can make first steps in trading. It is a well known fact that well planned and well prepared battle is a half won battle.