The first time I read about Forex was back in the 90s and it was nothing but something like a game. I just watch the charts and predict with my naked eye where this pair will go next. Did I have any success using this method? I tripled my money in the first 3 days. Then I hit Margin Call.
Margin Call: Point that is reached when your account has no sufficient funds to open a position of any size.
I started to read all along and thought that Forex is something more than a moving chart.
The first thing I did was to search for the Best Forex Broker.
With Best Forex Broker, I mean the following checklist:
1. Includes all the currency pairs that you wish to trade (including the commodities if any). More than 30 Pairs are offered by some brokers today.
2. Phone support availability during all trading hours. Call back availability is a good option by some brokers.
3. Email response within 12 hours. Again, the Best Forex Broker would never delay responding to his customers’ enquiries. Don’t underestimate this. When you need support for something related to money traded LIVE, you will be in trouble with every passing minute sometimes.
4. Reasonable Spread for all currency pairs: This is a very tricky point. Some brokers offer a lot of bonuses but their spreads would just hunt you down! Compare the spreads at several time intervals, eliminate the highest ones.
5. User friendly Trading Platform. Try the platform using their demo account. Its always good to have a live chart option within the platform.
6. Account Opening size that suits your budget. Some brokers tempt you with very low entry requirements, don’t just rush and sing-up; compare the OTHER options mentioned here first!
7. Several options for Cash withdrawal from account.
8. Leverage options: Some offer up to 1:400. The US based brokers have limitations applied lately. Check for international ones if you need a high leverage. Personally, I wouldn’t recommend the highest ones unless you are experienced enough to SCALP.
9. Training Training Training: Yes, its last but NEVER the least. Not all of you know what Forex is all about. Follow the Broker’s advices, read their tutorials, watch their movies, and ask before you experiment anything new.
I can’t claim that XYZ is the Best Forex Broker, but I can assure you that following the above points, you will definitely be on the right track.
Forex Signals: Some brokers would say “We are the Best Forex Broker because we offer FREE Signals”. This is a very critical point. If you are willing to trade Forex then never buy signals. You will never progress, you will have an automated trader working for you. If you are a risk averse person, then FOREX is not for you.
Forex Money Management: Even the World’s Best Forex Broker won’t do you any good on this. You’re the one who is responsible for setting your own risk/reward ratio. Don’t rush and risk all your money in every single trade. Personally, I did this mistake and the worst part is It is rewarding in the beginning. Then I got a Margin Call. Never risk more than 5% in any trade, whether it’s a short term or a long term trade.
Forex Forums: There are a lot of forums out there that are really useful. Use these to understand new techniques, elaborate yours to others, take their advices, but NEVER ask someone to help you with a specific trade.
Forex Indicators: There are 10s of indicators out there. Nothing tops the list. Its always a combination of these that makes the trading portfolio for any trader. Never adopt an indicator before understanding how it really works. Every tutorial for an indicator will show you how it works. This doesn’t mean that it works efficiently in the same way forever.