First Steps On The Forex
You’re new on the Forex market? This section is for you. I’ll describe the steps that will make you a confirmed trader. To do this, no miracle, it goes through a learning phase which is obligatory. Without going through the various steps I will explain, only chance could make you win. To follow the correct sequence of steps, I suggest you click on the links that interest you and therefore return to this page.
1st step : What is the Forex Market ?
Forex, short for Foreign Exchange (currency market) is the market where currencies are traded around the world against each other as parities. Stakeholders buy and sell currencies in real time and continuously.
The Forex is a market that has many advantages over others financial markets. (Page : Why prefer Forex)
2nd step : How to win money ?
Now that you know how the Forex is functioning, you should now understand the mechanisms that make you win (or lose) money. For this, it is necessary to understand price formation and the unreeling of a transaction.
Now you just have to know how to calculate your profit or losses.
3rd step : Errors not to commit
The trading is not a complicated thing. However, we cannot do everything. The Forex is not a casino, even if as elsewhere the luck factor comes into account, it is not a wheel. It is important not to be like Toto gambles on Forex.
Here are some advices based on our experience that it is strongly advised to follow. (Page : How to Succeed on Forex)
Finally, like any other market, you must integrate money management into your trading strategies. This concept is essential if you do not want your trading account to zero after a few days!
4th step : Open a practice account
To implement the elements acquired during the previous steps, it is advisable to perform some operations (virtual) on a demo account. Initially, this will allow you to visualize the unreeling of an operation and the notion of profits / losses. Most brokers offer this service.
5th step : Determine your trading style
First, like any other market, two options available to you. You can trade based on fundamental analysis or technical analysis. Both methods have proven themselves and can make you earn money. It depends on which trading methods you want. If you choose fundamental analysis, I suggest you to consult various economic indicators. Otherwise, If you choose technical analysis, let yourself be guided by the following elements.
We must now learn to know yourself. You must know what time horizon you are most comfortable with. For a description of various timescales, click on the link.
Thereafter, you must determine a method of trading. Clearly, how will you trade on the Forex.
6th step : The choice of your trading strategy
You must now determine the trading strategy that you will use to trade on the Forex. Of course, this step is very long and it is this that will make you a good or a bad trader. You will not find at the first time your trading strategy, you will first try several and then eventually choose one to improve it therefore over your experience. In technical analysis, trading strategies, beyond the Chartist patterns are based on technical indicators.
Your trading strategy may use one or more indicators. There is no rule. Everybody has his own trading strategy. Here are a few trading strategies used by some traders.
Once you find your trading strategy, the real hard work is not done. You must be disciplined and stick to your trading strategy (if of course the strategy is winning over a long term period).
7th step : Open a real account
This is the last step and the culmination of all efforts. Open a real account is a very important step because although the demo account allows you to train, you react differently when your money is at stake. Here is coming the trading psychology.
To choose your broker, two ways are possible:
- Are you satisfied with your broker on a demo account and in this case go to the listing brokers and open your real account. Before you open your account, be sure to check the Bonus Broker section. Forex Tribe is working every day in contact with Brokers to get you the bonus you will not find anywhere else.
- Not satisfied with your broker on a demo account and if so, return to Step 4, which allows you to choose your broker.
This sheet is not exhaustive. It contains the essential points that lead you to open a real account. However, all components of trading are not addressed and I suggest you to visit our ‘Learn more about Forex’ section to see the various explanatory sheets which are available. Good trading to all!