How to do forex trading is a simple process. It starts by selecting the right forex broker to finance a brokerage account. Research your trade, enter the trade, and exit the trade. A simple yet hard to understand process for some people. Hopefully readers will find this article helpful in improving their trading efforts.
Their are literally thousands of fx brokers on the internet to choose from. In order to select the right broker you should be familiar with the regulations, longevity of the company, number of members, positive reviews, and more. You should choose a broker who is regulated by the government. Here is a list of some of the regulators by country:
US - National Futures Association (NFA) and Commodoties And Futures Trading Commision (CFTC)
UK - Financial Services Authority (FSA)
Russia - Federal Finacial Markets Service (FFMS)
New Zealand - Financial Markets Authority (FMA)
Australia - Australian Securities And Investments Commission (ASIC)
India - Securities An d Exchange Board Of India (SEBI)
Before you enter the trade you want to research it. You should study the present and historical data of the currency pair or pairs you are going to trade. Use your indicators, charts and graphs to determine a proper entry point. You never want to copy a trade from someone else, or enter a trade trying to get lucky. An important step on how to do forex trading properly is you want to make sure you understand fully why your entering the trade at that particular price point.
You can have the best plan on the planet however if you do not enter the trade properly your entire plan will fail and may end up losing a lot of money due to how quickly the market climbs and rises. Your either going to enter a sell trade thinking the market price will go down or a buy trade where your predicting the price will go up.
I have never utilized a trading option called a market order. Where you just enter a trade at the current price and exit the trade manually without a stop order to automatically exit the trade whether its a loss or gain. I like to limit my losses so I utilize either limit or stop trades or both. This basically means your able to enter a limit trade and wait for the market to hit that price to execute your trade as well as once a trade is executed you set a stop to it to minimize losses or cash in your gains. I usually always set a stop order to all my trades however I am not saying this is the best trading strategy for you to execute your trades with.
Mistakes happen especially with limit orders. So make sure you watch how you enter trades and monitor your limit trades or your great plan that you researched will be ruined by not entering and monitoring the actual trade properly.
You should have an exit strategy in place once you enter the trade. You never want to enter a trade and then guess when you should leave the trade. The most important exit is your possible loss price. Obviously you can play with the market a bit and exit at different price points if your trade ends up being a gain, especially a huge one, however your exit price for a possible loss should always be set up once you enter a trade.
This is how to do forex trading basically. Obviously as you become more advanced you will learn a lot more of the ins and outs of the market and be able to research, execute, and exit trades a lot better and with more precision for a wide variety of currency pairs and prices.