Due to massive digital marketing, forex trading has become quite popular in Pakistan. Now many beginners are joining the forex industry daily. That’s why the Pakistani market has become quite lucrative for forex brokers. More and more forex brokers are entering the market, providing competitive trading conditions to the Pakistan forex traders. In this article, we will discuss spotting scam brokers, finding legit brokers, and tips for beginners to get started in forex trading.
How to spot a scam forex broker?
What should you pay attention to before entering a bank card number on the broker’s website in anticipation of bargaining for a profit? Below are the basic security measures that you must take before choosing a forex broker:
Check the broker company.
It is worth spending a little time studying the broker’s ins and outs:
- How long has the company been on the market
- The company is registered – offshore companies and countries such as Seychelles, Vanuatu, etc., should immediately be alarmed.
- Check the reviews of traders on TrustPilot, SiteJabber, and other famous sources.
- If a broker lures you into making a lot of profits or zero risks, it is also a red flag. Regulated brokers cannot attract customers with such tactics.
Thoroughly read the terms and conditions.
We recommend dwelling on two points:
- What conditions for replenishing a trader’s account and withdrawing funds do the broker offer? How much is the commission? It happens that the broker works without cheating but on draconian conditions for a trader.
- Where is the money sent to replenish the trading account – do not trust if these are the details of a private person.
If a well-known body does not regulate the broker, then it is a red flag. Always choose a broker that has been in the market for a very long. Never fall prey to bonuses and rewards that lure you to overtrade because the ultimate objective of such brokers is to make you lose money.
What are demo accounts?
A demo account is a free trading account that almost corresponds to a real one, but you conduct all trading with virtual money. You make a profit or drain your deposit with virtual money. Opening a demo account takes just 2 minutes and is not difficult for a trader.
The main points when registering – you enter personal data and form an account (currency, server, deposit amount, etc.). If you are already a brokerage company client, you can open such an account for yourself from your dashboard. If not, you can open an account in a trading terminal (for example, Metatrader4), which you may download from the broker’s website.
Why does a trader need a demo account?
You need a demo account to get acquainted with the trading platform and the peculiarities of the trading market. You can study charts, make market observations, and analyze stocks. You will not jump with a parachute without first reading the instructions.
- You need a demo account to get acquainted with the financial instruments on which you will trade. You can test each of them and figure out how they work.
- To hone your technical skills. This is important when there is no time to think about actions in real trading, and the speed of reaction is important.
- To test your trading strategy. You can see how your strategy will work, its advantages and disadvantages, and bring it to an ideal state.
What are the advantages of a demo account?
- Its opening is a matter of a couple of minutes and clicks.
- It does not need to be replenished, and you can use it for free.
- You can hone your trading skills in comfortable conditions and without risks, study the features of the market and instruments, and develop your trading strategy.
- You are not risking real money, which eliminates the problem of psychological pressure and stress.
Opening a real forex account in Pakistan
Opening a Forex account starts with choosing a broker. Here you should consider:
- Fees and commissions for trading;
- Minimum balance required for work;
- Customer service capabilities of staff.
It is important to ensure that the broker complies with all requirements and standards set by the regulators and complies with local laws. This will help you avoid regulatory issues in the future.
It is imperative to verify that the types of foreign exchange transactions that the investor intends to conduct in the chosen jurisdiction are consistent with the legislature and regulatory authorities of the country of origin.
Data for opening an account on Forex
The documentation required to open a Forex account is relatively straightforward these days, with minor deviations from country-specific regulations. Most brokerage companies ask new clients to fill out a terms and conditions agreement and a trading form.
Usually, a copy of the passport or CNIC and other forms of identification (bank statements, credit card statements, utility bills) must prove the applicant’s address.
Are there any restrictions on opening a forex account?
Opening a Forex account for trading with real funds and withdrawing earned profits is impossible without verifying your data. Therefore, it is necessary to indicate real data, which indicates that you have reached the age of majority. Do not try to open an account with a broker that does not support your country because even if you manage to open an account, you may find issues in the future. FCA-regulated brokers do not support Pakistan yet amid anti-money laundering restrictions.
Tips for beginners
As a beginner trader in Pakistan, you may not find Forex a straightforward thing. Hence, you should follow the following tips for beginners so that you may avoid any major blow.
Have a clear trading plan.
It is often said that a bad trading plan is better than a no trading plan. The trading plan should not be subject to ambiguity, so all possible future scenarios should be based on price dynamics. If you can’t put your trading plan on a bumper sticker – don’t trade it.
If unsure, do not trade.
If having a market position, you feel doubt or uncertainty, liquidate it. This means that the position was initiated emotionally or by mistake. Eliminate such positions immediately, ruthlessly, and regardless of whether they are profitable or unprofitable. Remember that the absence of a market position is also a position.
You can be right 30-40% of the time and be the winner.
The percentage of winning trades has a very indirect effect on the outcome of a trade. Generally, traders are ruined by one or two losing trades. As long as the success and failure are measured in money, the final account size will be decisive, not the percentage of winning trades.
Eliminate losing positions and keep profitable positions
Perhaps the most difficult rule to implement in practice. Almost every position closed with a plus had a “loss” period in its life and vice versa. Therefore, it would be more accurate to say – liquidate the position at a predetermined loss level and not set such a level for profitable positions.
Do not trade illiquid instruments.
A speculator trades money for the sake of money. Commodity, which is used as an intermediate link, does not matter in itself; it is only important that it is liquid enough to maintain transaction costs at an acceptable level.
Follow a long-term trend.
This does not mean that trading against a large-scale trend is unprofitable. This is unprofitable in the long run. Following a trend is much easier than it seems at first glance; buy (or not sell) a rising market, sell (or not buy) a falling market.
Do not try to catch the high and low of the price.
The reason is trivial – it is impossible. Have the patience to wait for when the trend is identified, and only then initiate a position.
Forex brokers for beginners
There are plenty of options for Pakistani traders to get started with a forex broker. However, some brokers are preferred for beginners amid ease of access and their trading conditions. Below are some good brokers for beginners:
HotForex
HotForex is a regulated broker that supports local deposits and withdrawal through local banks, JazzCash and EasyPaisa. Moreover, it offers free webinars for traders where beginners may learn something useful. The broker has social trading as an option. Beginners can copy the trades of veteran traders and mitigate their risk.
OctaFX
OctaFX is a regulated broker with support in the local language. The broker offers hassle-free local deposit and withdrawal options through banks and wallets. Their webinars in Urdu may help beginner traders to find a path to a successful career.
FBS
FBS is a regulated broker that offers local deposits and withdrawals for Pakistani traders. There are several other options to initiate payment processing. The website has an interface in Urdu which brings ease of access for the local users.
Bottom line
As a beginner trader in Pakistan, you should wisely choose forex brokers that suit you and learn to avoid scam brokers. There are certain tips for beginners that you must keep in mind while starting your journey in trading.