Earning money and generating a sound income stream through halal and legal means is no piece of cake, But Forex trading is a very legitimate way of doing that, though even then it doesn’t ensure a 100% success rate. What I think one must keep in mind while trading with forex is ‘investing money’ doesn’t necessarily means you will get a pay back. It takes a lot of intellectual and physical power to make that happen.
Starting your forex trading journey does not happen in a day or two. One of the things that testifies its authenticity is how much learning and knowledge intake it requires before you trade your first dollar. There are a lot of dos and don’ts in the world of trading let it be forex or any other kind. One of the characteristics/purpose of “Business” we even study in books is to earn profit. But how could one maximize that profit is totally dependent on him/her.
The general know-how of forex trading as we must know is how forex traders trade currencies in pair and speculate about appreciating or depreciating of value of money of one currency against the other.
Role of a broker: Forex traders first have to choose a reputable (online) trading platform for them to trade upon. Every broker has their own fee structure, tools and feasibilities for the traders. It’s entirely up to traders to make a decision wise enough to benefit them monetarily.
Forex Trading in the light of may dos and donts and should and shouldnts:
Experience and coming in prepared:
Forex traders should be well aware of the fact that forex market is highly competitive and every single kind and type of traders from a complete newbie who has just started learning about markets to a well experienced professional trader co exists in the same market. Keeping that in mind one can easily evaluate how important it is to have a reasonable trading experience. Again, like we established before, forex market might be easy to get into but it certainly isn’t easy to trade in. Almost every other trading platform offers a DEMO account of trading first. What do you think that implies? That simply means that trading platforms want you to learn and get experience in trading first as well. That’s how significant it is. To be aware of the changing trends of market and how a financial market behaves under certain circumstances is what one needs to ace trading. It’s not a matter of high intelligence, though sure it’s of vital importance as well, but experience comes with putting in a lot of time and consistent effort. For example, a new highly intelligent vigilant-in-his-actions trader wouldn’t know more than a moderately intelligent trader who has spent many an hours trading in that financial market, because in his case he has spent many hours observing keenly different kinds of movements, behaviors and shifting trends of those involved financial components. That’s precisely how he can be better at speculating what’s going to happen next. For a beginner, his first test is when he has to make a choice for a broker. There are tons of trading platforms being provided across the globe. From the ones that take traders from one’s own country beginners have to make sure that the chosen broker ticks all the boxes in the criteria of desirability because every broker has different policies, trading tools, rules and regulations, fee structure and trading deals etc.
Moreover, being able to adjust efficiently to changing market conditions, affects of world events and rules etc. is what adds up to a good experience.
Learning and studying
Learning process before starting trading may not be as short lived as one may have hoped. People from Pakistan usually trade with strong currencies like US, EUR, GBP, Canadian currency etc. Now imagine for a second how well would you speculate the falling and rising of value of different currencies if you have the knowledge of the economic, social, political, financial, geopolitical and general market conditions of countries of the currencies involved. This is just one of the many ways to ace your trading strategies to learn about the currency and what when how influence its value in its country. Now since we know that there are around 26 currencies traded in the forex exchange market, we should come to the realization that that’s how much knowledge one has to make him or herself familiar with. Learning the shifts, changes, trends and overall general behavior of a country’s market conditions to monitor its economical and financial aspects closely is what takes you towards profitable trading strategies and decisions.
Moreover, what do’s and don’ts other than learning about the markets we should be acquainted with are as follows:
Practice: Demo accounts give you a fake virtual money limit to practice with to ensure acquisition of good decision and strategy making skills. The comfort in trading with practice account like this really swells up your chances of being a good learner which would ultimately turn into experience. Because even if you lose some or all of the money, you know your haven’t gone bankrupt you just have to start over.
Plan: A trading plan is a must have. It should include your judging and determining criteria, methodologies (trading strategies, tactics, decisions), how much loss you could take and how much profitable you want your trade to be. This way even if a trader ends up in a loss, he or she isn’t completely incapable and financially disabled to pull themselves up again. That’s why traders should set a boundary or a limit for themselves as to how much they could financially and mentally afford to lose. Hence risk management is an absolute essential for forex traders.
Forecasting what could and couldn’t happen: moving markets are always highly unpredictable. Knowing the nature of the change of trends really pushes you ahead in the trading game. Using the right tools and indicators to predict the movements rightfully is a MUST-HAVE for any forex trader or else it’s most probable you’d lose over and over again and never make any profit.
Consistency: Making a plan may not be as difficult as it is to stick to it with consistency. This increases the chances of your trades to be profitable in the long run.
Anyhow, there are even forex trading schools, video lessons, campaigns and training programs etc. out there for you to learn from.
Be a cold blooded trader: the process of pulls and pushes among buyers and sellers makes this whole forex trading world very ruthless. Be very rational with your decisions and don’t fall victim to other party’s sentimental behaviors. Forex markets demands many sacrifices so in order to survive be a cold blooded trader with a lot of competency and self-confidence.
Tricks to earn money:
Well, you might not be ready to hear this but there’s no one trick like some hidden treasure which you know exists out there somewhere for you to find or master in order to make big bucks in forex trading.
Trading Platforms that take Pakistani traders and how many of the traders they think will end up losing money:
- XM 73.5% of retail investors lose money.
- Octa FX 74 – 89% CFD investors lose money.
- HotForex Markets 72% retail investors lose money.
- AVA Trade 79% retail investors lose money.
- FXPro 75.5% of retail investors lose money.
- FXTM 81% of retail investor accounts lose money.
- Etoro 75% of retail investors lose money.
So the bottom line is, people who are more of the glass-half-empty kind will never go for forex trading considering the figures above stating that the majority will lose. But what if you actually ace your strategies and fall in the minority making profitable trades? That’s where the people who are more of the glass-half-full kind with a lot of intellectual, physical and mental energy comes in. It’s most significant for new traders to understand that it’s basically a process consisting upon your decision making skills and strategies which would shift you from this above majority of losers to the minority whose trades are ending up being profitable. Hence, to sum it up, it entirely about minimizing your risks and subsequently losses and making the best of whatever the profit you are getting.