Toronto Mike

Complete Guide: How to Get Started in Forex Trading

If you've never traded Forex before, the  idea might be daunting. But you can start Forex trading today, with no prior  experience. Yes, the internet has made it easy. And with platforms readily  available online, nothing is standing in your way.

Here is what you need to know to start Forex  trading.

The  broker

You need a broker through which to trade  Forex. The broker processes all of your trades, making it possible for you to  access the markets. There are two important considerations when choosing a  broker:

  1. Regulations: Financial trading  is a regulated activity in almost every country. This is especially so in  financial centers such as the UK, USA, Japan, etc. You should make sure to  choose a broker with a government license. This ensures that you're protected  in the case that something goes wrong.
  2. Order execution: Find out what  type of model to use. The two options are brokers with a dealing desk and  brokers without. A dealing desk simply means that your money is not actually  traded. It is kept by the broker who loses that money if you lose, and pays you  out his own if you win. Without a dealing desk, the order is done straight  through the broker.

The  account

To start Forex trading you need to select  a trading account. A trading account is similar to a regular bank account.  The difference is that you can use these funds to trade on the financial  market. Brokers will offer a variety of trading accounts to choose from. Pay  attention to minimum deposits, leverage, financial instruments available, and  charts and analyses provided.

As you become more attuned to the way the  Forex market works, you'll be able to make more informed decisions on what will  serve you best in future.

Financial  leverage

For better or for worse, Forex brokers  offer higher leverage than any other. Leverage allows you to trade with far  more profit potential than the actual amount you are trading. In other words,  if you are offered leverage of 1:100, it means that you can trade $1 and make  $100. However, it also means you can lose an equal amount, and not just what  you traded.

Trading  capital

No matter what, when  you start Forex trading you should have trading capital set aside. This  means that you trade with funds you can afford to lose. Because ultimately you  probably will face failure before going on to make big money.

If you're trading with the money you need  for day-to-day living, you will inevitably crumble under the pressure, making  bad decisions when things start going wrong.

Trading  software

Finally, you need to learn to use Forex  trading software. The trading platform is what creates contact with the broker,  and will usually be offered by the brokers. The industry standard is MetaTrader  4, and is offered by Admiral Markets, as well as most other brokers. It is easy  to use and has complete functionality.

Start  Forex trading today

Forex trading is so accessible nowadays  that there are few reasons not to start Forex trading. Just make sure that you  are responsible, and only trade with money you can afford to lose.

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About Toronto Mike
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