Thinking about trading Forex? It pays to consider a few quick tips before you get started.

Forex Trading Tips

Be clear about why you’re trading

Whether it’s for financial reasons, for fun, a challenge, or anything else, everyone has their own reason for trading. Reminding yourself regularly about the reasons you started and what you hope to gain can provide you with valuable direction – and equally valuable limitations – when it comes to making trade decisions and some structure to help you stay on track.

 

Shop around

Before you sign up, do your homework to ensure the broker you want to use has everything to suit the way you want to trade. Key areas to consider include pricing, support, technology and a reliable reputation.

Take time to learn

The importance of a good Forex education cannot be overstated. It only takes a little knowledge of the basics to get started, but the more you know the better placed you are to make informed decisions. There are plenty of ways to learn about Forex, from blogs and forums to tutorials and webinars. All you need to do is find the right method for you.

Be realistic

If you have a specific outcome you hope to achieve through trading, be realistic in how you hope to achieve it. For example, if your goal is to earn a specific amount of money in a year’s time, you can track a rough path towards reaching that goal. In such an example, it’s likely you wouldn’t pursue high risk, high reward trades when you can build slowly with a lower level of risk. Each trader should trade in a way that’s compatible with their overall aims.

 

Be prepared to fail

No trader wins every trade and at some point you will experience setbacks. Understanding this before you place your first trade is an important step as it gives you a wider view of the picture and helps ensure your expectations remain realistic. If you accept that any trade can potentially be a losing one, it can help form a better attitude to risk management.

Measure yourself

To make sure you’re keeping on track with the goals you set, it pays to analyse your performance on a regular basis. You’ll learn a lot about your trading style from looking at what you’ve done right, as well as what you’ve done wrong.

Start small

When you’re starting out, you don’t need to trade every currency pair. You can learn a lot about the markets by just picking one or two pairs and getting familiar with them. Once you’re more confident, you can branch out into other pairs or types of trades like CFDs and indices.

 

Do a demo before you dive into live trading

The best way to get some hands-on experience of how the market operates is to use a demo account. In a replica of the real trading environment, you’ll get a feel for the trading platform and discover how to use the tools – without having to put any real money at risk. Once you decide to go to a live account, you still get to keep your demo so you can keep learning and testing new strategies.

 

Use the right tools

As well as having a good trading platform, there are a plethora of extra tools that traders will find useful. From sentiment traders which let you see how the market is trading to Electronic Agents (EAs) which do the hard analysis work for you, there are add-ons which can aid any almost any part of the trading process. Take some time to explore our range of Trading Tools and see how they can help you.