FOREX trading is easy to learn. However, many associated factors, like risk management, profit-making, etc., are difficult skills to acquire. Therefore, in this article, we have prepared a concise Step-by-Step Guide for FOREX Trading to help you to begin FOREX trading.
Learn about FOREX basics
Start from the basics. Understand the basic terminologies, trends, and chart-readings, etc., before you open your trading account. There are several trading guides online, such as babypips.com, dailyfx.com, investing.com, etc., which you should check out. Even though the language of many websites is easy, you may get overwhelmed with too much information. Therefore, the ULTIMATE FOREX Trading Course for Beginners break the chunks of knowledge to make the whole learning process practical, rather than theoretical.
Learn technical analysis
Do words like Fibonacci, Bollinger, Bands, candlestick, etc., baffles you? Do not worry about it! These are easier to learn with proper step-by-step guide for forex trading from the best online FOREX courses in India. In fact, charts and trends are the easiest way to visualize historical data; moreover, the spot and trends pattern can help you find the right opportunity for trading in a given day.
Learn some fundamental analysis
As we know, FOREX is a currency exchange market. Therefore, the relative value of a currency depends upon the economy and foreign trade of that country. These include data and news on employment rates, interest rates, inflation, etc. However, intraday traders (retail traders), don’t have to worry much about it. However, it is still advisable to know them because they can disturb the trends that arise from technical analysis.
Capital, Risk and Reward
Trade according to your capital
Although you get leverage of capital from your broker when you start trading, it is still advisable that you take the risk as per the money you have. For instance, if you want to begin your account with US$1000, do not risk more than $10 or $20 in a particular trade.
Trade with the usual lot, if you can risk $100-$200 in one trade; otherwise, go with the mini lot and keep the risk-reward in two digits.
Risk Reward Ratio
Keep the risk-reward ratio of 1:1.5 or 1:2. Always keep a take profit and stop loss in those ratios only. Stop loss and take profit are pre-determined exit points of a trade. If you are regularly hitting either of them, with more than 60% take profits, you are on the right track. Our ULTIMATE FOREX Trading Course for Beginners will guide you properly on how to decide the take profit and stop loss in each trade.
The following points will summarize our step-by-step guide for forex trading:
- Start by learning the basics.
- Learn to analyses charts, indicators, etc.
- Open your account with a broker.
- Place your order – with proper stop loss and take profit.
- Confirm your order.
- Get out of the trade on right time.