Starting forex trading: your first trade! The important time for fx beginners - Singapore Forex Trading, Singapore Forex Academy, Singapore Forex Association

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Starting forex trading: your first trade! The important time for fx beginners

Before you get this far you should learn how to trade forex with a demo account, before you invest real capital.

This way you get a feel for the system your broker uses, the trading process and you learn the basics of the operation of the market without loosing your shirt.
When you are trading consistently on a demo account, then you can move on to a real forex account.
First you gotta make your mind up as to what path the future price is likely to take.
How do you do that?
This is where analysis comes in!
There are several different methods:

Technical analysis:

This involves studying charts and historical data to try to predict how the currency will move based on certain technical characteristics.
Your brokers platform will have inbuilt charting software, or you can use a platform like Metatrader 4.

Fundamental analysis:

This method involves analysing a country’s economic and political fundamentals, trade statistics and growth projections and then using this information to predict the future value of that countries currency. It also encompasses news trading, for example if a story breaks which changes your beliefs on the currency fundamentals.

When the analysis is done and you have your decision made, its time to trade!

Now you are ready to place your order, here are some pointers.

  • Never risk more that 3% of your account balance on any single trade.
For example,
If your capital invested is $1000,
Keep your risk on any particular trade to less than $30. This way you will live to fight another day.

  • Always stick to your initial trading idea.
This means that if the trade is going against you,
and the price is coming close to your stoploss position,
Do not move the stoploss to acommodate more losses!
This is a cardinal sin, and your account balance will not forgive you!
And last but not least.

  • Do not over trade!
Believe it or not,
The bulk of the profits that a professional trader makes in a year, come from 2 or 3 good trades!
Thats it!
The rest of the time is filled with analysis and thought!
One great trade will make a year for any trader,
so be patient and let the market come to you.
As a beginner, you should start with a very light footprint! don not spend your days staring at the screen. If you overindulge at the beginning, and you have a string of bad trades, you will likely loose confidence and give up quickly.

Now get in there and try it out, If you follow these guidelines you can build a sizeable nest egg over time.