Guidelines for Foreign Exchange Trading

Foreign Exchange Trading is the subject of the following guest post from a financial writer looking to offer their insight into the often confusing world of FOREX.

Anyone who is thinking of starting a career in Foreign Exchange Trading (FOREX) should have certain personality traits, otherwise they could lose a lot of money.

Vital attributes of FX trading

You have to be decisive, have a certain amount of capital that you can afford to lose, and you have to enjoy working with figures that are constantly changing. Someone who can carry out quick calculations, read the market and be able to act on information is likely to succeed in this environment. If you are hesitant and impatient for quick results this mightn't be the right business for you.

Demo foreign exchange trade accounts

The easiest way to assess your Forex talents is to carry out research and then go online and choose a broker. Remember, though Forex is the largest speculative market in the world and currency fluctuations happen on a second by second basis. You will need to make sure that the broker you select uses the best Forex trading platform for your purposes. Some companies use spread betting, whereas others will only deal in local currencies rather than global currencies. Once you feel confident that you have made the right selection, contact your broker and ask if you can set up a demo account. A demo account acts as a type of practice run; you’ll be dealing in Monopoly type money rather than the real thing, though you will be using live information to make your trading decisions.

Never chase your losses when trading foreign exchange

If you start to panic and then chase your losses once you’re trading live, you’re in danger. It’s better to stop trading and reassess your position, rather than keep on losing. If you’re a novice, only trade in small amounts. Always research, the ubiquitous man in the pub may have some wonderful tips but it’s your money you’re risking, not his. It’s far better to take a daily financial newspaper and one of the many opinion magazines that will give you information about companies as well as the markets. The trade press is also useful. Specialists write these publications and they can lead you to look at trade developments that may have a bearing on future currency fluctuations, or at least you’ll get a better understanding of global finance and the global economy.

Keep alert when trading

Some people start to trade obsessively, and try to operate for long hours at a time. This can lead to some dangerous risk taking. Just because the currency markets are open 24/7 doesn't mean that you can’t take a back step for a while and reassess your strategy. Some experts recommend that a change of strategy can help a Forex trader.

Learn your trading lessons well

Every business has its own terminology and this is usually bewildering for a new trader. If you want to succeed and earn money you’ll have to learn the jargon. For example a ‘yard’ is a billion units, not an extension to a house. Forex trading can be exciting, nerve wracking and has ruined many people financially. If you’re prepared to learn the trade and all about the markets you stand a good chance of success, just try not to be greedy and also expect the unexpected and leave yourself some funds in reserve in order to deal with market crashes and other unforeseen circumstances.

Interested in guest posting or writing a sponsored post? Feel free to send me an email (mrmoneybanks<at>multimillionaireroad<dot>com), find me on twitter @millionairer0ad or comment.