Is Trading Forex For You?
Are you fascinated with economics, free trade and international relations? Is the possibility of securing profit through engaging the world's largest marketplace attractive? If so, then trading currencies on the forex market may be for you.
How Do I Prepare For The Live Market?
If you consider yourself an aspiring forex trader, then it is crucial that the proper due diligence is performed before entering the marketplace. At a bare minimum, it is necessary to address the following issues ahead of putting your money at risk:
- Market Education: No matter what kind of professional experience one may have, it is necessary to gain an adequate knowledge base regarding the international currency trading environment. FXCM provides helpful forex-related education that can bring a new forex trader up to speed. In addition, detailed study of the products being traded, historical market behaviour and competing market participants may be very useful in identifying both opportunity and risk. Knowing when to trade, what to trade and how to trade are key elements of achieving success in the forex market.
- Goal Setting: In order to achieve success, you must first know what success is. It is important for a new entrant into the marketplace to set specific goals and objectives before live trading.
- Practice: Forex simulation is one of the most effective ways to gain live-market experience without financial risk. FXCM provides forex traders the opportunity to trade an interactive demo account via one of several supported platforms.
Forex Simulation: Practice Makes Perfect
"Rookie" mistakes often lead forex newbies to sustain considerable financial loss. Listed below are a few of the most common (and costly) rookie mistakes:
- Order entry and exit errors: These are relatively simple to mitigate, and are often the result of an unplanned click of the mouse. Sharpen order entry skills and alleviate many of these mistakes with a demo account.
- Misuse of leverage: The financial leverage placed upon a trade can be increased by mistake or on purpose. Implementing leverage on a demo account can help one understand how to use leverage safely and properly.
- Periodic lapses in discipline: A forex demo can provide a detailed illustration of exactly how costly haphazard trading can be.
Extensive use of a forex demo can reduce the number of unforced errors while helping to promote good trading habits. In addition, the demo can be instrumental in developing new ideas or fine-tuning an existing approach.
As a leading forex brokerage firm, FXCM gives individuals the opportunity to trade forex via demo account on several unique platforms.
Being able to interact with the forex market in real-time, without risk, is a tremendous advantage to both novice and veteran traders alike. No matter which type of trader you are, experience gained through simulation is a solid step toward achieving success in the forex marketplace.
Senior Market Specialist
Russell Shor (MSTA, CFTe, MFTA) is a Senior Market Specialist at FXCM. He joined the firm in October 2017 and has an Honours Degree in Economics from the University of South Africa and holds the coveted Certified Financial Technician and Master of Financial Technical Analysis qualifications from the International Federation…