The Forex market is one of the fastest-moving trading platforms around, with an average turnover of over $4 trillion daily. So it’s no wonder that the number one question asked by people just starting out in forex trading is ‘how do I get started’?
Well, there are two ways to make money in the market. One is to find the Holy Grail – a trading system that guarantees success every time you use it. The other way is to work out what you might be doing wrong and fix those errors before they start losing you cash.
The first option sounds more attractive, but if you’re not a trader who makes a living from the market, it’s very unlikely you’ll ever find that perfect system. The second option involves learning and understanding the various pitfalls and traps that novice traders often fall into and then planning to minimize those risks.
The MetaTrader 4 Platform
Many traders just starting out in the market start off using free platforms such as Meta Trader 4, while others will simply use Excel or some other spreadsheet platform for their trades. However, even if you have never opened up an account with an online broker, we recommend that you download and install the free MT4 platform. The reasons for this are:
– You can use it to trade on a demo account so you do not risk losing any actual money when testing out your strategy
– It has an exceptional charting feature which is brilliant for spotting trends and other useful chart based analysis
– You can have it running in the background when reading analysis on web sites which will stop you from having to constantly switch windows
– It is free
– It works well with all currency pairs, stocks and indices too
When to Trade
The answer to this question is entirely dependent on your own personal circumstances; if you can only trade outside of regular business hours, say after the markets close and before they open again for trading, then you will need to make sure that any strategy does not rely too heavily on market activity during these times.
Technical Analysis – An Essential Part of Any Forex Trading System
Technical analysis is a trading discipline that uses charts to analyze market activity, and in the case of forex trading it is where you will be able to spot trends and use them in your trading. Many people believe that technical analysis is about predicting what the market might do next so it’s important not to get caught up in this common misperception.
As with any market, you have to understand how it works before you can even consider becoming a successful forex trader. So learning the basics of technical analysis is an important step in that process. Remember, the point of using a trading system is to minimize your risks and you can only do that by spotting what might go wrong in any given situation. Good luck and have fun trading!