Your forex starting point

Your starting point as a beginner to forex trading The foreign exchange market, also known as the forex market, is the world’s most traded financial market. We’re committed to ensuring our clients have the best education, tools, platforms, and accounts to navigate this market and trade forex. If you’re not sure where to start when it comes to forex, you’re in the right place. You’ll find everything you need to know about forex trading, what it is, how it works and how to start trading.

Forex

Tips for Forex Trading Beginners Before you start something new, begin with the fundamentals. Let’s look at trading tips every trader should consider before trading currency pairs. 1. Know the Markets We cannot overstate the importance of educating yourself on the forex market. Take the time to study currency pairs and what affects them before risking your own capital; it’s an investment in time that could save you a good amount of money. 2. Make a Plan and Stick to It Creating a trading plan is a critical component of successful trading. It should include your profit goals, risk tolerance level, methodology and evaluation criteria. Once you have a plan in place, make sure each trade you consider falls within your plan’s parameters. Remember: you’re likely most rational before you place a trade and most irrational after your trade is placed. 3. Practice Put your trading plan to the test in real market conditions with a risk-free FOREX.com practice account. You’ll get a chance to see what it’s like to trade currency pairs while taking your trading plan for a test drive without risking any of your own capital. 4. Forecast the “Weather Conditions” of the Market Fundamental traders prefer to trade based on news and other financial and political data; technical traders prefer technical analysis tools such as Fibonacci retracements and other indictors to forecast market movements. Most traders use a combination of the two. No matter what your style, it is important you use the tools at your disposal to find potential trading opportunities in moving markets. 5. Know Your Limits This is simple yet critical to your future success: know your limits. This includes knowing how much you’re willing to risk on each trade, setting your leverage ratio in accordance with your needs, and never risking more than you can afford to lose. 6. Know Where to Stop Along the Way You don’t have time to sit and watch the markets every minute of every day. You can better manage your risk and protect potential profits through stop and limit orders, getting you out of the market at the price you set. Trailing stops are especially helpful; they trail your position at a specific distance as the market moves, helping to protect profits should the market reverse. Placing contingent orders may not necessarily limit your risk for losses.

7. Check Your Emotions at the Door You have an open position and the market’s not going your way. Maybe you could make it up with a trade or two that don’t fit with your trading plan...just a couple couldn’t hurt, right? “Revenge trading” rarely ends well. Don’t let emotion get in the way of your plan for successful trading. When you have a losing trade, don’t go all-in to try to make it back in one shot; it’s smarter to stick with your plan and make the lost back a little at a time than to suddenly find yourself with two crippling losses.