At first glance, the currency market (otherwise called Forex for Foreign Exchange) is not an easy market to access. The notions of risk, uncertainty and volatility have a prominent place in forex. With its own language and its particular terms: pip, spread, Leverage, Carry Trade, Ask, Bid.... and faced with this battlefield that is the foreign exchange market which never stops (when a place closes, another opens elsewhere in the world), how to apprehend it and avoid getting naked too quickly?
Prepare the ground
You who love risk and who have a little background, Forex is not an impossible market to conquer. Here are 3 things you absolutely must do before you start Forex trading:
1 - Find a regulated broker (or broker).
To trade in forex, you will need an intermediary because trading in the currency market is not allowed live. These brokers are subject to regulation by certain financial authorities of the countries which are the only ones to certify brokers as intermediaries.
To choose the right broker, you should:
to check on the forums what we think of the broker
to verify their age and reputation (a bank remains safer than a broker who is only 2 years old)
to be wary of brokers who promise you huge gains in less than 30 min. It's not the casino either, the currency trading!!
2 - Choose a trading platform
Most brokers offer you a trading platform. This will allow you to buy and sell your currency pairs. Smart, they will even suggest demonstration platforms with the opening of a fictitious account. It still allows you to practice and see how it works. They will quickly encourage you to open a real account anyway.
The best known trading platform is called Meta Trader 4 (or 5) but many of these brokers offer "house" platforms
3 - Seek expert advice
Before throwing yourself headlong into the fray, you should also find some references from sites or blogs on the world of forex. Some share their trading experiences, others provide technical analyzes (based on mathematical algorithms) or even day-to-day advice. By cross-referencing all these sources, this will help you carry out your trades as calmly as possible.
Don't lose your underpants
There is no miracle recipe to win for sure even if the game seems simple: buy low to sell higher. But in order not to find yourself naked in less than 3 days, you have to cover your back and follow a few common sense rules.
1 - Study the market and learn
This will come with experience but by observing the market, noting the conditions of your trades (winning or losing), it will be easier for you to reproduce them (or not) under similar conditions.
2 - Plan for all possible scenarios
Before making your trade, you will never be completely sure what the market will surprise you with. It will therefore be necessary to plan your fallback solution in case confusion and uncertainty overtake you by asking yourself all the right questions beforehand: And if the market turns around…. , and if an improbable news falls at the same time.....
3 - Cover your back
By multiplying the different trades..... If you have decided to make a trade on a particular currency pair, try to see if it is not possible to make a significantly different trade on another pair by same time.
4 - Ask for help
In addition to the opinions that you will have collected on blogs and sites, do not hesitate to ask for other opinions on the forums in order to have another point of view.