by Sam Payn
(Miami, Florida )
Forex currency chart EUR/USD
Looking to win big on the forex market? Make sure you plan and prepare before you launch into this fast-paced, challenging market.
Learn, learn, learn
To be success in forex, you must understand the markets - and yourself. Be self aware, to understand your tolerance for risk, and your tendencies towards rash behavior. You must know your goals before you begin to trade, and stick to a pre-defined strategy. Keep up to date with news items about forex in the media and subscribe to investor newsletters.
Develop your plan, and stick to it
Once you've established your objectives, develop a plan, understanding how you will measure success and failure within your parameters, and what your time frames will be. Are you looking to earn enough for full financial independence, or are you trading for enjoyment and mental satisfaction? Answers to these questions will help to craft your strategy.
Picking a broker
The choice of broker is a vital one. Unreliable brokers will rapidly destroy your gains, and there are also unscrupulous or simply fake brokers in operation who must be avoided at all costs. Check that your trading goals, and your expertise, match the broker's market offer and forex trading platform. Look at the trading software and ensure that it is simple to use. If you can pick the right broker, you will find that they help you to make good trades, by offering instant updates on the market, insights, tools, indices, blogs, knowledge and more.
Leverage is one of the most fascinating aspects of the forex market - and that ability to leverage your trade with borrowed capital can make you a huge profit - but can also result in a significant loss if you don't know what you are doing. Learn about leverage and be highly respectful of it. It is well worth avoiding it entirely whilst you are a beginner. Focus on trading with small sums of your own capital initially, and growing it organically through profits.
Choose your accounts
There are a wide range of account types and different packages that are geared towards different needs and experience levels. Avoid leverage if you are a beginner, and opt for the most conservative approach as you start. Remember, you are learning the market now for a long-term career in successful trading.
Try focusing on a single currency pair.
As the forex market is so complex and diverse, it is incredibly difficult to master the variety of financial transactions that happen within it. For this reason, it is well worth building up a deep knowledge of a single currency pair, and focusing on trading against that pair alone. Ideally, start with the British pound as your home currency, and pair it with another highly liquid currency.
Manage your emotions
Never add to a loss position. You'll know intuitively that this is a rash and foolish thing to do, but many traders have lost their lifetime gains through losing their heads. Apply stop losses and other tools to help you keep a cool head when the pressure mounts! Remember, there is no place for emotion when trading on the forex market - at all times you must be cool, analytical and objective.
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