Complete And Best Forex Trading Guide For Beginner Forex Traders
A complete Forex trading guide for beginners guide is necessary for those traders who are new in this financial marketplace.
Following questions are common for new traders:
- What is Forex trading and how does it work?
- What are the benefits of Forex trading?
- Is Forex trading profitable?
When I was a novice trader, I tried to figure out so many confusions discussing with other traders.
At the same time, I realize that online is the best resource for Forex traders to learn. With this intern of learning, I found web browsing as my best friend. I believe that:
“It’s not about working for money, it’s about having money work for you”
As beginner forex traders, it is necessary to learn about Forex trading before starting the first trade.
Besides, without having a piece of proper knowledge, you will lose your hard earned money. Building a strong structure will give you long-term success in Forex trading.
So, today’s lesson is for novice traders, who are confused about “how to trade and where to trade”.
In this article, we will mention the best forex brokers for beginners. We will also cover the best Forex trading platforms along with the differences between brokers and platforms.
Additionally, this article will help you to learn how Forex traders practice their trading with a demo account.
Eventually, Forex traders have a risk-taking mentality and also have a tendency to minimize the risk. Here is the way how they will set their mind before entering into the trading marketplace.
Before discussing the main points, let’s have a look at what Forex trading is.
What Is Forex Trading
Forex market is a decentralized marketplace where currencies are exchanged and traded.
For more details visit our, what is Forex Trading and How does it work section.
Currency trading market is open for anyone, who is eligible to trade.
In Forex, currencies are traded in pairs. But the fundamental problem for a novice is that they make the Forex trading complicated by researching unnecessary points.
Generally, it is our suggestion not to make it complicated.
Let’s see how to make it simple and easy for you.
Forex trading is simple if you learn it in a proper way. The tendency of making it complicated is harmful to traders.
Our forex trading beginners guide is perfect for them, who want to learn currency trading in a simple way.
Moreover, traders use strategy to perform trading perfectly. The more complicated the trading is, the more difficult to perform.
To do extensive trading, you have to search for different educational blogs.
Do not flow with the market trend if you don’t have any idea. Following the market trend is important but, try to use your brain before trading.
Always keep this in your mind that no college degree is required to perform trading.
Try to follow those traders who are making a profit in trading. Both Social and Copy trading plays a vital role in the currency market.
You can visit our educational article on social trading and Copy trading.
Best Way To Trade Forex Profitably
Is Forex Trading Profitable? To make your every trading profitable, you have to apply a proper trading strategy with a proper market analysis.
Success in Forex market depends on your own perspective. Spending more money, adding more indicators in the chart will make your trading complicated.
Now, I am going to screen you some points that will help you to develop your trading mentality.
Trading Mind Set:
In Forex trading, you cannot avoid loss. Your success and failure will depend on your mindset. Proper mindset will help you to ignore heavy risk.
On the other hand, if you don’t have the correct trading mindset, it does not matter how good or bad you are in the Forex trading marketplace.
Accept The Reality:
You have to develop your realistic mentality regarding Forex trading. Investing more money in Forex is not an ideal decision. Set your mind at this point that you could lose your all money.
Don’t attempt to trade with real money until you are not good at it. Each trade is individual. Do not compare your previous trade with the new one.
You can lose your money in a new trade where you earned a good amount in the previous one. Consecutive winning can make you overconfident.
Our suggestion is to control your emotion and use your logic. Moreover, don’t take your trade personally. Just because, you are losing trade doesn’t mean that you are a bad trader.
Review your trading strategy and practice with the demo account.
Avoid Over Trading:
Overtrading is considered as an excessive buying and selling of trading assets. Additionally, most of the traders overtrade while trading the marketplace to regain their investment capital.
Make sure that you can at least sleep at night properly. Overtrading is not good for you. Control your inner emotions. Overtrade and over leverage will give you a bad experience in trading.
Power Of Patience:
If you are a novice, then I would like to suggest you slow down your trading. You don’t have to trade every day to earn solid.
Quality is important rather than quantity. Make yourself a “sniper” in the trading marketplace. Avoid trading if you are not 100% sure.
Be An Organized Trader:
A trading plan is set rules and guidelines which will define your trading behavior. It includes money management, risk management, goals, market analysis, and others.
Traders must be organized in their trading business. Make a plan before your trading. In the trading business, you can research on trading, make a blueprint, and execute the plan.
Remove this thought from your head that the trading plan is boring. You can make a creative plan if you want.
Trading Journal:
For beginners forex traders, a trading journal is an important tool created by the trader for better output.
The trading record will give you an idea about the previous trading. You can also go through those strategies that you added to your previous trade.
Moreover, the trading journal will help you to follow your trading plan. So, keep a proper record of your trading.
Think Before Planning Your Trade:
Before entering into trading, think as much as you can. Ask yourself that “are you able to trade properly or not”.
In the first place, without having proper planning, you cannot control your feelings so easily. So, avoid trade unless your trading edge is smooth.
Having 100% confidence in price action trading is important. Do not compromise with your trading business.
Don’t Be A Gambler, Be A Trader:
In the Forex marketplace, there are so many skilled traders. As I mentioned before, work as a sniper.
Set a plan, wait for market news, and make yourself calm. Earning money is not only the main focus. As well as do not run for the money.
Remember, you are a Forex trader, not a gambler. After setting your mind for Forex trading, open a new chapter which will make you capable of taking a risk.
Risk Management In Forex Trading Beginners Guide
Experts say “Any trader can take the risk; a great trader can do it with purpose and use”.
In Forex trading, the trading mentality is a fundamental aspect. Traders must have the right mentality to be successful in currency trading.
In our Forex trading guide for beginners article, you can ask me that why mentality is so important in Forex?
The answer is simple. The trading mentality will help traders to resize their trading risk. Risk management is one of the fundamental practices among all practices in Forex trading.
List For Risk Management
Follow the list to know about the risk management, and the mentality to take a risk in Forex trading.
In Forex trading, hedging is necessary to minimize your risk. There are numerous ways to hedge. Choose the best one for you.
Transaction risk is the exchange risk in Forex trading. Currencies are traded in the Forex market at different times. Prices are different during different trading hours. The time difference between entering in trading and setting a contract cause transaction risk. Traders need to set their mind to control this risk.
Interest rate fluctuation is also a part of Forex trading risk. Central Bank is responsible for this. Traders need to settle their mentality that fluctuation in interest rate drives numerous decisions for traders.
Currency interest rate and Country interest rate are often linked hand to hand.
The volatile market in Forex is also responsible for Forex trading risk. High impact Forex news is responsible for market volatility.
We think, for novice traders, brokers risk is very common risk in Forex market. As they are new in Forex trading, they somehow trust scammers by falling for their traps. It is really important for a broker to have regulation. Find the most suitable Forex broker for you and you can have a look at our best Forex broker’s list.
For each country, political risk causes a significant role. Elections are taking place all over the world. In this time, currency rate goes up and down. Political risk generates a high risk for traders. This risk is not possible to control. Changing government in any country also has a negative drawback in the trading business.
We already mentioned in most of my articles that, for novice traders, investing a little amount of money is a wise decision. Leverage helps traders to deal with a large amount of money. But, taking a risk at the beginning of the trading is not an ideal decision. The volatile market conditions and aggressive use of leverage will bring a huge loss.
Operational risk will happen when inner management is involved in this risk. Sometimes, brokers have a management team to manage traders trading. A weak management team is the main reason for operational risk. Operational risk is including legal risk, fraud, and security. Traders need to research their brokers and give an effort to reduce the risk.
Suppose you are a good trader and have a decent win percentage. You did not review broker’s rules and regulations before choosing this broker. At last, you find that this broker will not able to pay back your money. This risk is known as credit risk. In simple words, when one party is unable to pay the other party, the risk is known as Credit risk.
Check broker’s regulation before picking up a broker. Some brokers cannot maintain their business and goes into bankruptcy.
I am going to close this part by throwing a line –
“I am not so much concerned about the return on my capital as I am on the return of my capital”
–Will Rogers
Trading Guide - Forex Broker And Its Types
A Forex broker mainly a retail currency broker. The broker allows traders to open an account to their platform.
After opening an account, you will get access to perform trade by using different trading features. Brokers have their own advantages and disadvantages.
Forex broker guarantees the best trading experience, but traders need to choose the best one based on their personal requirements by keeping so many features in mind.
Before picking up the best forex broker, let me explain to you how many brokers are there in the trading marketplace.
There are two types of brokers:
- Regular Broker
- Intermediate Broker
Regular brokers directly deal with clients. Intermediate brokers work as a middleman between clients and a larger broker.
Types Of Intermediate Broker
There are two types of intermediary brokers. They are:
- Dealing Desk
- No-Dealing Desk
We are going to give a small briefing on these two types of brokers.
Dealing desk brokers create a market for their traders. They actually work as a market maker. Similarly, market makers control the prices and work against the trader.
By using the platform, they take buyers order and process the orders directly by making an opposite trade. Simply when you place a buy order then they will place a sell order. When you place a sell order, they will place a buy order.
No-Dealing desk brokers do not pass trader’s orders through a dealing desk. They work as a bridge builder. They link two parties together.
Brokers who use the ECN models use these trading platforms and price quotes come from outside liquidity provider like banks, hedge funds, mutual funds, etc.
Other Broker Types
Apart from these, there are also other types of brokers available in the Forex marketplace. These are:
- Full-Service Broker
- Discount Broker
Full services brokers offer many more facilities than discount brokers. This types of brokers are expensive. In the same way, I think full-time brokers are good for the novice as they provide full-fledged service.
For new traders, choosing the right broker will depend on their investment. Discount brokers offer free education and research tools.
Best Forex Brokers For Beginners
Forex brokers offer essential trading services to traders. Trading features depend on the broker types. Around more than 1000 brokers, it is really difficult to suggest the best one for you.
Moreover, traders need to choose the best one depending on their trading types and experience. Apart from the platform, brokers also offer:
- Education service
- Asset’s price list
- Trading training programs
- Professional accounts
Steps For Selecting The Right Broker
On the other hand, the following steps are really important, for selecting the right broker.
Trade execution fee or broker’s fee is essential for traders before choosing brokers. High broker’s fee will lead you to high cost.
The Minimum investing amount is necessary to be reviewed before opening a position. Initial amount fluctuates depending on broker’s rules. For the novice, a small investment is good to prevent loss.
Read all rules and regulations of the withdrawal process. Some brokers charge withdrawal fees. Without fees, you cannot withdraw your profit from your trading account.
Try to avoid complicated brokers fees structure. Most of the brokers have the same structure of fees. Best fees structure will decrease your cost.
Review the broker’s charging sector. Are they charging spread or commission? Spread calculates depending on PIPs value where the commission is either fixed or variable.
For young traders or novice, margin account will bring huge cost. So, my suggestion is to use a cash account for trading with a small amount.
Customer service is a very important part of any broker. It is important for traders as well. Customer care will deliver different Forex news.
Make sure, brokers have a user-friendly trading platform to trade. Simple and fast trading platform will help traders to trade well. The trading platform works as a gate between the retail traders and the markets.
Before putting your money in brokers account, double-check that brokers have regulation or not. Regulation-free brokers are come up as a fraud most of the time.
Forex platform is necessary for traders to perform their trade. A demo account is a good choice for a new trader.
Choosing the right Forex platform will meet the Trader’s needs. Now, have a look at the basic information of forex trading platform in our forex trading beginners guide.
Forex Trading Platform And Types
A Forex trading platform is basically a trading software. In a trading platform, you can trade manually with the help of brokers.
The trading platform provides trading signals, news, charts, and order taking methods.
The main purpose of the platform is to execute an order in time. A mobile phone was the oldest method to execute trading.
In the previous day, traders and brokers communicated with each other via mobile phone calls and with the help of the message system.
In modern times, it is hard to imagine trading without a platform.
Traders will find different tools and features that make the trading much easier.
To start a trade, a trader needs to open position under any Forex brokers. Different brokers offer different platforms for traders.
Some platforms are designed by different companies and then offers those platforms to different brokers and companies. Few companies make their own in-house trading platforms for traders.
Those in-house platforms are unique for both outsider brokers and traders. It is difficult to find anywhere else the same type of platform.
There are two types of trading platforms. These are:
- Web-based or Online Platform
- Downloadable Platform
We are going to describe a little bit about these two platforms types.
The web-based or online trading platform is popular for all traders.
Traders can get information about trading anytime from anywhere.
The online platform is more practical than the downloadable version.
A downloadable platform is a software, which must be downloaded, in a trading device like laptop, mobile, tab, etc.
You have to carry this in your trading device while traveling one country to another country.
Forex Trading Guide For Beginners - Best Platform
The trading platform is equally important like brokers for a trader to perform the trade.
It could be hard for a trader to make a list because the best trading platform selection totally depends on the trader’s personal choice.
There are so many leading platforms in the currency market. Now, in this section, we will describe for you one by one trading platforms working features.
The following platforms are the best trading platforms in the Forex marketplace.
Meta Trader 4 is popular in the trading marketplace as an electronic trading platform.
Millions of trader choose MT$ as their trading platform only because of its user-friendly attribute.
Tons of brokers also offer this platform to their traders.
This platform accepts two types of trading orders.
- Pending order
- Market order
Meta trader has many trading features. A trader can do a deep analysis of trading strategies and execute the order.
More than 30 analytical tools, charts, etc are available in the MT4 platform.
You will also get free daily market analysis, educational material in MT4.
Meta trader 5 or MT5 launched after MT4. It launched when MT4 was already very popular in the market.
It is an improved version of MT4. Its graphical interface is almost similar to Meta trader 4.
It has some features which are not available in Meta trader 4.
This platform is also designed for other trading assets like stocks and commodities along with Forex.
In this trading platform, you cannot open more than 1 position of the same currency pair.
Suppose you are trading with EUR/USD. You can only open one position of EUR/USD.
However, you can open two or more positions of different currency pairs simultaneously.
Meta Trader 5 is less user-friendly than MT4. Traders can execute 4 types of orders on this platform.
As we, all know about ECN who are popular with trading. The full name of ECN is Electronic Communication Network. C-trader is an innovative ECN trading platform which is designed for Forex and metal trading. This trading platform is designed to fulfill two functions named trade execution and charting.
C-trader is extremely clean and attractive platform. C-traders have some features. These are:
- Real-time reports
- Symbol Display (Expand)
- No restriction in limit orders
- Micro lot trading
- Multiple order types
- One-click trading
- True ECN etc
The benefits of trading through this platform are that the trader can enjoy the fastest trading. They can also control their risk while dealing with a micro lot.
If you compare with Meta trader, then this platform is not as user-friendly like Meta Trader. Even traders find some difficulties to add and remove indicators from their trading charts.
Act trader is the second most popular platform for currency trading after Meta trader 4 and 5. You can enjoy trading online or after downloading this software. The high desktop application allows you to monitor the currency market. Accept Forex this act trader is also offering other trading facilities like trade currency, ETFs, CFDs, Equities, Currency forwards and Options.
The interface is also user-friendly like Meta trader and also has a simple layout. A trader can easily move windows from one workplace to another.
Ninja trader is a platform where a trader can trade Futures and Forex. A trader can download this platform free of cost. It is an award-winning platform.
Traders can also trade stocks through Ninja Trader. There are some standard features named:
- Advanced Charting
- Market Analytics
- Automated Strategy Development
- Back testing and Optimization
- Trade Simulation
Moreover, Ninja Trader allows currency traders to customize their trading platform. As this platform is easy to understand, so both novice and expert traders can use it.
Visual Trading System is also known as VT Trader. This platform was the first one which allows trading direct on the chart. It has the most sophisticated power programmers and system designers to make it more unbeatable.
Traders can monitor margin call effectively and receive instant alerts when margin falls below. Even traders can analyze past trading performance by utilizing VT trader closed positions and detailed reporting windows.
This is another trading platform, which offers trader to follow the strategies and signals of other traders. Traders from around the world share their knowledge about trading via this platform. This platform’s strategies are algorithm based.
Mirror trader platform is also sending signals to the trader when to enter and exit a trade. It also allows currency traders to take advantage of market movements even when they are busy at their work or in sleep.
Traders have the opportunity to trade with various trading methods. Traders can trade with multiple assets as Mirror Trader supports this function. These platforms offer Stock, FX, Commodities, and Indices.
The trading station platform is designed only for those traders who trade with FXCM. It is their proprietary trading platform. It offers powerful analytical tools for traders. The trading station also offers an unparalleled trading experience.
Traders can explore multiple order types, real-time prices. Currency traders can use this platform after downloading in their trading device and from online. It has a very user-friendly interface.
How To Choose The Right Forex Platform
Forex platform is a place from where you will execute your trade. Operating a user-friendly platform will bring profits for traders.
Forex platform either provides by different Forex brokers or provides by independent software developers.
In order to choose the “best fit” you have to survey the marketplace. Here are some useful trading platform features:
Use those platforms which are providing accurate Forex currency quotation.
Forex platform should allow quick entry in all types of orders.
Forex platform will allow you managing trading account directly. Ideal Forex platform will offer you suitable account manager to manage your account.
Before choosing the platform, please have a look at technical analysis tools. Few platforms offer full-fledged trading analysis tools.
The chart should be updated as real-time based. On the other hand, fundamental tools are needed to have access to quality live news feeds.
Strong data security is mandatory to secure your trading data as well as your personal data and account login information.
So far we have discussed on Forex brokers, Platforms, setting your mindset before trading, and having the capability to take risks.
Now, we will know more about a Forex Demo Account.
Forex Demo Account
Should I practice Forex trading with a Demo account?
This question is often posted on different social media by a new trader. Practicing trading via Demo account will make you more confident.
Except for the financial risk, a demo account has no difference with a real account. On the other hand, a real trading account brings a huge loss if you do not have a proper strategy.
The practice account will give you the opportunity to apply your strategy. You can practice trading without losing real money.
When you will start through a demo account, you will get virtual money to start trading
Before picking up a broker, please make sure, that broker is offering a demo account or not.
In Forex demo account you will get real-time charts, signals, and also real-time currency pair quotes.
You will get an article on Forex Demo Account on our website. To know the demo account advantages, you can read that article.
How To Open A Demo Account
Opening a demo account is not similar to the real one. You don’t need to submit any document to open a demo account.
Traders need to fill up a small form to open a practice account. You can choose a demo account from our broker’s list.
Firstly, to open an account, you have to select a particular broker. Select the account type and fill the form. Click next to complete the registration.
The Demo account will help you to know more about Forex trading with real-time Forex data.
Practice will make you a perfect trader. Traders practice trading combine with all strategy. Few traders build up their own strategy after analyzing the trading marketplace.
Practicing with a Demo account is a wise decision for traders which I mentioned before in this article.
It’s better not to practice with a single demo account. Create a couple of free account on the different Forex platform. Familiar with different broker’s platform is necessary.
Trading Tools Of Forex Trading Beginners Guide
To make the trading process easy and comfortable, the Forex trading platform offers tools for their traders. It is important for all traders to know about these tools.
These tools, which I am going to mention, are the common tools in Forex trading.
Analytical tools are used for market analysis. It will also help traders to do profit in trading.
Brokers offer different charts to their traders for different strategies and trading style.
Trading signals can be either free or paid offered by the brokers. Signals can be delivered through platforms, SMS, emails etc. The help of some technical analysis generates this signal. This technical analysis is done either by the software or by a person.
Copy trading helps the trader to copy others strategies and signals to make a profitable trade. Expert traders shared their trading experiences and shared their recent successful trading strategies. It is a great path for a trader to earn money.
The Trading robot is a kind of software, which runs automated trading, based on its analysis. A practical tool allows you to trade 24/7.
Trading networks is an online community like Facebook, Twitter and so on. It is a platform where traders discuss trading and share their strategies.
Traders need to have a trading account to keep their money. Brokers offer different trading accounts based on how much money you are trading.
Forex Analysis Tools
There are 3 market analyses in Forex trading. Following these 3, traders can analyze and develop ideas.
Forex traders study about price movement in the Forex market with the help of technical analysis. Technical is a trading tool.
With the help of technical analysis tools, traders can determine the price movement and also predict the future price movement.
Technical analysis believes that- all current market information reflected in the price. For Forex trading technical analysis is very important in the Forex chart.
In a demo account, you can also apply technical analysis tool and practice with that tool.
You can analyze the price movement with the help of a price chart. Price action setup is the key level of Forex market analysis.
Fundamental analysis happens when global economic news and other news events affect the financial market.
It happens in Forex market when the country’s interest rate and interest rate policy change.
The analysis is co-related with political forces. Political issues also control the Forex price movement.
Sentiment analysis is considered based on the trader’s behavioral attitude.
It also measures all Forex participants emotional and psychological attitude.
In a short line, the investor’s strong feelings for the market is sentiment analysis. How strongly you feel the market will move in your favor.
You can ignore the market sentiment, but this is not a wise decision for your trading. Understanding the market sentiment is the key to your trading.
Price movement has a strong co-relation with market sentiment. Utilizing market sentiment properly, traders can use social data analysis.
They can collect different information from different Forex related groups, forums, economic websites, etc.
Forex Market Trend
“Don’t fight with the trend, Follow the trend”
The following trends are not a short-term method.
Fundamental analysis and Technical analysis plays a vital role in the Forex marketplace and also in Forex trend.
Either you are investing long-term or short-term, the time frame is important in Forex.
Traders also can divide their trading into 3 parts. These are:
- Intra-day trading
- Swing trading
- Position trading
Moving average is also a part of Forex trend. Moreover, traders need to make themselves updated in a change of Forex trend.
Traders need to look up to their strategy which matches with the Forex recent trend.
Picking up the right Forex trend, investors can earn a huge profit. As a result, they will lose money if they do not follow recent trends.
Analyzing multiple time frames in Forex is also helpful to get proper trading.
Forex Market News
The best advantage of the Forex market is that this market is open for its traders 24 hours, 5 days a week.
There are 8 major currencies in the Forex market which are traded the most. A news release indicates the Forex currencies cash positioning, Forex market trend, Forex other news, and so on.
In the same way, news release depends on the current situation of the market.
Forex Currency Pairs
Choosing the best currency pair is mandatory while trade Forex. Pair up with strong currencies against weak currencies. Similarly, selecting the best currency pair will lead you to a huge profit.
Identify whether the pair is trending or not. Following the market, the trend is also important as I mentioned in my previous point.
Traders need to choose a specific trading pair which goes with your trading strategy and style.
Forex Research Work
Research work is needed to trade smoothly. Traders need to research on currency pairs, market trend, strategy, and some other points in the Forex market.
Market volatility is one of the reasons behind price movement. In a volatile market, price moves unexpectedly.
Research on the market news also gives traders a clear idea of the Forex marketplace.
Demo trading allows you to understand the full Forex market perfectly. Forex broker’s news and platform are also important to trade well.
How Much Money Do You Need To Start Forex Trading
In different trading forums, you will find questions like “How much money do I need to open a Forex Account?”
My first suggestion is for the novice traders that ‘Start from Zero’
You can start trading with a demo account without paying a single penny. Forex market is a place for large and small trading. There is a low barrier to entry in the trading market.
The minimum deposit amount depends on the broker. Do not try to take trading risk more than 2%. If you start with $100 then your risk is $1 per trade.
Retail Forex brokers offer deposit as low as possible. As a novice, it is not necessary to open an account by seeing the minimum deposit amount.
You can check our reviews where we gathered all the information about regulated brokers for you.
Make sure that, the starting trading balance can reduce your trade risk. The trading amount is strongly related to your risk handling capacity.
Traders can apply all trading points via Demo account to make themselves an expert trader. A volatile market is the main key to change all these points.
So keeping all these in mind, I would like to suggest to trade with a little amount of money and of course practice before trading with real money.
Which Trading Platform Is Right For Me
There are so many things before choosing a platform. We have mentioned two types of forex trading platform above article.
If any traders want, then he or she can use both platforms to perform trading.
Each has its ups and downs. It is better to say that, the online-based trading platform works for one type of trader and downloadable platform works for another type of trader.
Try to choose the platform that meets the following criteria.
• Experience Level
- What is your experience level in the trading market?
- Are you new in this field or you are an expert?
These are the primary questions before selecting a trading platform.
A novice trader will search for a broker who will offer a trading platform, that is user-friendly and less expensive.
Moreover, Robust functionality and sophisticated options are needed for intermediate and experts traders.
• Traders Types
Ask yourself what types of trader you are. There are four major types of traders in the trading market based on trading style.
- The Scalper
- The Day Trader
- The Swing Trader
- The Position Trader
No matter what style you choose, you have to make sure that it truly fits your personality. Trading size and scope of a trader are important when selecting the trading platform.
The appropriate trading platform will help you to trade peacefully.
• Trading Methodology
For traders, a trading methodology is important. The trader uses their methodology depending on their trading criteria. Selecting the proper trading approach is a key element for any traders.
If you follow discretion trading approach, then you will execute your trade depends on the sole judgment.
On the other hand, if you are willing to accept automated trading, then you have to use a computer software application. The application will help you to trade your position automatically.
In automated trading, emotion is not available. If anyone is a specialist in High-Frequency trading then other methodologies are not important to set in your mind.
Make A Plan For Forex Trading
Planning is important to get the best trading result. To be a successful trader, you need to make a plan on Forex trading.
It’s better to make a daily plan before opening the trading market hour. Traders need to have more discipline to make a proper trading plan.
“Be Your Own Trader”
Keep this line in your mind and make a trade for profit. A trading plan is a combination of personal expectations, risk management rules, trader’s personalities, and market sentiment.
When they make a proper plan for trading, it’s easy to control the emotions.
Mental preparation is important to stay stress-free while trading. You need to set a risk level in your trading plan.
Set your goal. From time to time, traders should set a trading goal based on weeks, months, and year.
While you make a plan, please record everything which is important for your trading.
Your entry and exit price, trading position size, profit and loss, and other things should be included in the trading plan. Remember, a trading plan will make your trading simpler.
Now, I will discuss social trading which is famous among all traders.
What Is Social Trading
In the last few years, the popularity of social trading has grown substantially. Social trading is similar to a social network. It is the fastest growing trend in the currency market.
People share their thought, trading methods in the social network. You can also copy trades via social trading.
Traders do not have to pay any fee to do social trading. Social trading occurs with the help of social trading platforms as well as social media.
Moreover, traders do not need to give access to their account or disclose any personal information if they want to do your trade.
A lot of traders prefer social trading only because of its open concept. If you are a signal provider, then you can easily search signal receiver in the social trading group. Another benefit of social trading is, you can interact with other traders.
Social trading is suitable for both novice and expert traders. Novice traders follow experienced trader’s strategy, copy their trade and also can follow them.
There are two famous platforms for social trading-
- E-toro
- Zulu Trade
Successful traders sell their trading signals. This is an additional income for experienced traders. To know more details about social trading and how does it work, you can visit our educational sector on Social Trading.
Is There Any Disadvantages In Social Trading
Every coin has two sides. A good side and a bad side. Basically, there are also some disadvantages to social trading. In social trading, novice traders follow expert traders.
Those who are good in this trading field can follow wrong traders by using social trading and end up with extensive losses.
Because there are also so many scammers in the social trading platform to misguide traders.
Furthermore, there is no storage in social trading. It is the main disadvantages for Forex traders.
Moreover, different features make traders confused who are newbies in this field.
Forex Trading Signal
Forex signal work as an alert provider. Signal provides an alert on the currency market.
Generally, traders get signals from their brokers, individual persons, or group of traders. Forex signal differs from broker to broker. The signal depends on the efficiency of the Forex broker.
Manual signal provider charges a fee for Forex signal. The signal providers can be expert or individual traders.
The automated signal is free for some causes. The trader makes a deal with the signal provider. Compare different signals to know about signal quality.
All trading signal includes a trading point, profit targets, and stop-loss. Signals sent directly to the traders mobile phone so that, traders get alert.
There are two types of Forex Trading Signals:
- Manual
- Automated
A manual Forex signal is that when a human analyst sitting behind the computer and generate a signal. In manual Forex signals, analyst spends the time to look for a signal and interpreted the signal properly.
In automated Forex signal, Forex robot generates signals using specific software and interpreted them.
Moreover, Forex signal service is profitable for traders and also profitable for signal providers. Traders should be focusing on trading with the broker’s signal and making a profit.
Trading App - Mobile Trading
Mobile Forex trading comes up with many opportunities in the Forex trading marketplace. Meanwhile, we mentioned some platforms example at the beginning of this point.
Almost all the platforms are offering mobile trading with is equally important like desktop trading device. In a word, you can simply download applications from the app store and set on those apps in your mobile trading device.
Similarly to the desktop trade room, you can also continue your online trading via mobile devices.
If you are considering yourself as a serious trader, then mobile trading can help you in various ways.
Firstly, you do not need to tie up with your laptop or desktop to trade Forex. Secondly, best Forex trading applications are available for Android and IOS Smartphone.
So get yourself a mobile device that has at least a wider screen and long battery life.
Advantages Of Mobile Trading
The advantages of mobile trading are huge. These are:
You can trade from anywhere you want. Remember success in this field requires two things, one is time and another is concentration. Moreover, mobile trading is perfect for you if you are a busy person.
You can visit your platform in the middle of your daily work or while you are traveling from one place to another.
As we said, you can check your trade line whenever you want. That means you will get up to date news about the Forex marketplace. At the same time, you can get updated news of different time zone as well.
Mobile traders can get knowledge about trading from different forums. If anyone wants to get an education from specialist traders he might have to pay thousands of dollars.
In addition, traders can access different educational blogs, articles to know as much as they want.
There are various trading tools available in the trading Traders can make themselves introduce with those trading tools. They can forecast on price movement.
Some trading platforms offer bonuses after downloading the mobile trading platform.
Let’s finish up by discussing some disadvantages of mobile trading applications. Although mobile trading is convenient for everyone it has some drawbacks.
Some traders face problems because of their mobile screen sizes. Limited sizes screen do not let them view the full platform properly.
A limited amount of analytical tools is also big disadvantages for traders. It also depends on where and when they are trading.
Slow internet connection can hamper them in the middle of their trading. Lack of operating experience can be a thread for traders. If you want to take this trading line seriously, then Desktop will give you the best trading experience.
Professional traders open multiple monitors while trading. It will help you to check all trading functions properly.
How To Minimize The Forex Risk
In trading business, you cannot make yourself 100% winner or profit gainer. In the overall trading journey, you have to face loss.
However, you can reduce your trading risk if you want.
Before start, fix a proper lot size which you want to trade based on your account. You can save your time and money with accurate lot size.
You will find many position size calculator online. Traders can use those tools to save time and also to calculate properly.
Additionally, you can What is Lot article to learn how to calculate a lot manually.
Always try to be calm when you start trading. Although, increasing your position size may generate huge profit but, it can cause huge losses.
Because there is always a chance to make a loss, and you have to be prepared for it. Besides this, maintain discipline and also maintain money management in Forex.
Control your loss by using stop-loss orders. This function will close your position at a certain point.
Our suggestion is not to use a stop loss in each of your trade.
Gaining knowledge about Forex trading is also help you to minimize the loss. There are so many analysis tools to measure the market trend.
At the same way, different news sites also help traders to know about the current market situation. If you are an active trader, then please review Forex market news every day.
Similarly, risk management is the key to survival from Forex trading risk. Suppose, you are a skilled Forex trader, but for your poor risk management, you can wipe away from Forex marketplace.
On the other hand, controlling your greed also help you to reduce your Forex risk.
Hedging is another way to secure your trade in the long run. Getting insurance on your trade is called hedge.
When you decide to prevent any negative issues then, you will go for hedging. In long position hedge will protect you from downside risk, and in short position, it will protect you from upward risk.
Some brokers allow a trader to hedge directly with their accounts. Except these, we will recommend you to read the point “Risk Taking Capability” again. We have already mentioned other important notes at this point.
How To Use Forex Order Correctly
Forex trading believes that order means how you will you enter or exit a trade in the Forex market. The order is offered by brokers.
Different brokers are accepted by different types of Forex orders. Traders need to consult with brokers before trading.
Different Types Of Trading Order
There are some basic types of order provided by most of the brokers. These are:
Market order refers to buy and sell currency at the best available price. Suppose, at this moment market bid price of EUR/USD is $1.0412 and ask price $1.0413. When the trader wants to buy EUR/USD market then it will sell to him at asking price.
When a trader places an order, either buy below the market or sell above the market at a certain price. It means that when you placed an order at a low price in LONG but the price goes above. Again, in SHORT, you placed an order when the price was high but then the price goes down.
Stop entry order means to place an order by buying above the market price or sell below the market price. In buy time, order placed above the price and price goes up.
On the other hand in sell time, order placed below the price but the price keeps going down. The trades applied for this order when the price goes in one direction.
Suppose, the current market trading is going to EUR/USD is at $1.2012 and you know that the price will go up.
Just set your stop entry order and enjoy the HORROR film if you want. I do not think it will be a bad idea.
Stop loss is basically used when the trader wants to prevent additional loss if the price is against him. In stop loss here
- Long Position – Sell Stop order
- Short Position- Buy stop order
A trailing stop is a type of stop-loss order attached to a trade that moves as the price fluctuates. This stop order moved according to the price of the market.
Let’s say that you have decided to short position USD/JPY at 90.90, with a trailing stop of 30 pips. This means that originally, your stop loss is at 91.00.
If the price goes down and hits 90.60, your trailing stop would move down to 90.80. It will give you a break-even point.
Entry order means trade at a specific price level. It will allow us to set the price that we would like to buy or sell ahead of time and will only get us into the trade if that price is hit. Additionally, it plays a significant role in the trading market.
The order has some benefits for traders:
- You can save your time
- Traders can save money
- It keeps trader accountable
Firstly, make sure that you fully understand and comfortable with your broker’s order system, before stepping into a live trading environment.
Secondly, there are plenty of different trading orders used by traders every day in the trading marketplace. But, the above orders are the most commonly used by the traders before considering a live trade.
Final Words
Finally, we tried to cover all points of forex trading in this article.
Choosing the best trading platform is mandatory for every trader to do successful trading.
As we have said that Forex trading strategies for beginners is important to execute a profitable trade. The more knowledge and experience you have, the more you will be a successful trader.
Admit it-
“Skills are Cheap. Passion is priceless”-Gary Vaynerchuk
So, never stop learning and be passionate. You will get profit and success undoubtedly.
