If there’s something essentially needed to trade Forex, it is a trading platform!
If you are assuming that trading is ideal for absolute beginners, I’d say yes, but you are not going to make millions overnight.
If you look at Forex trading like gambling, you will not be able to become a profitable trader because greed will invade you.
If you want to become a great trader, you must have skills and patience.
Also, you must keep practicing trading as it helps to shape up your trading style into a better version.
Once you do your homework, you’d feel as if you are good to go.
But then, Forex trading knowledge can’t be accumulated into a few pages or days. It is a continuous learning process.
If you have just started with the basics of Forex trading, you have a lot more to learn.
I have already discussed selecting the right broker, but remember when you are selecting a broker you must consider the demo account option.
A beginner should have access to a user-friendly platform that can be easily handled when trading.
A beginner’s journey is already complex, so when the trader doesn’t select the right platform, the difficulties increase.
When the trading platform is easy to understand, you will not have difficulties when trying out new strategies and techniques on the demo account.
There are many reliable brokers that you can select when you are trading Forex, but the problem is finding the ideal broker. To earn extra income, Forex is a good choice.
But it doesn’t mean Forex can be traded as the main source of income.
However, either main income or part-time income, you must find the ideal broker and an excellent platform to keep going in trading.
Even though there are many good brokers, you must do your research to find the right one that offers the most straightforward trading platform.
I know, you will encounter difficulties when selecting the right broker, so let me help you.
Before you settle for an ideal platform check whether the platform is reliable; it is one of the most crucial factors that you must consider when selecting a trading platform.
You don’t want to lose all the money that you collected, so make sure to find a platform that you can rely on.
If you’re going to deposit and withdraw your cash without facing any issues, the trading platform must be reliable.
Another important factor is charges related to the platform.
You must consider the charges because your profits will disappear even before you know it if the charges are high.
Besides, you are just starting your journey so your income will not be massive.
The smaller income that you gain must be protected, so for that, you must consider the charges related to the trading platform.
You must next consider the licensing factor of the Forex platforms.
If the relevant authorities monitor the platform, they are unlikely to fool you.
The trading platforms will work according to terms and conditions, so you don’t have to worry when you are trading through it.
But to find whether the platform is licensed, you must do some research even if it is tough.
Along with these, you must consider the simplicity in the Forex trading platform, but due to the software used, eventually, almost all the trading platforms have become easier to handle.
In the meantime, don’t forget to consider the leverage, margin, and other requirements that generally should be considered when selecting a trading platform.
Once you select the ideal platform, you will be able to trade in a hassle-free way. However, there’s more to learn about Forex trading platforms.
So, keep reading!
There are two types of platform, such as commercial and prop platforms.
Before you pick any, you must ensure to understand the types in detail.
Thus, prop platforms are designed by Forex brokers, and specialized companies
develop commercial platforms.
However, there are unique features for both the trading platforms. Even though the prop platforms are considerable, there are times when you might want to change the broker.
But when you try to do it, you have to learn the new platform from scratch.
Basically, prop platforms are not suitable for naive traders because you might
have to struggle a lot to understand the sophisticated features.
But, why do these trading platforms include complex features?
Well, a Forex broker’s main duty is not to create and manage trading platforms.
Hence, they don’t spend much time to introduce better trading tools and features to prop platforms.
For example, if you consider custom and never heard platforms, you might find it difficult to handle because brokers develop these.
Beginners like you need a lot of time to get adjusted with the trading platform.
But, I don’t say trade execution speed is terrible because it is excellent in prop platforms, yet beginners will have a tough time understanding this platform.
So, beginners like you can consider the platforms designed by professional companies.
One of the most common trading software is Metatrader.
This is a user-friendly and a high standard platform that you can consider even if you don’t have experience.
But if you are looking for a platform that includes broker feeds, then this is not going to help because the commercial platform has poor customization.
These companies sell commercial platforms to Forex brokers so the benefits may be biased towards the broker, but not the trader.
Yet, as beginners, you are not going to find anything better than commercial platforms because they are extremely user-friendly and flexible.
So that’s about the types of platforms that you will come across.
But, I’m pretty sure you’ll have some doubts related to selecting the right trading platform.
Hence, I’ll solve some of the common questions below.
What to consider when selecting the right platform?
You already know this, yet let me provide a brief answer.
As mentioned, you must consider reliability, trading conditions, licensing, charges, and user-friendly interface.
But, before you make a decision, it is better to read some reviews about the platform so that you will make a solid decision.
Which Forex software will be ideal?
A technical trader must consider a comfortable charting platform. The platform that you have selected must have all the necessary tools.
Only if you select the right trading platform will you be able to enjoy trading.
A fundamental trader must consider the news and analysis factor and check whether it is accessible by the Forex software that the trader has selected.
Should you trust the platforms that provide exclusive offers?
You already know when something is too good to be true, we shouldn’t rely on it.
Just like that, if a platform is providing exclusive things that you cannot fathom, then you must think twice before considering that platform.
If they are offering so much, they should have massive profits.
If yes, then from where do they get so much profit? Instead of falling for exclusive offers, you can find a platform that is reliable and reasonable.
I hope these questions and answers cleared most doubts that you had about trading platforms.
However, it is better to get some idea about the famous trading platforms.
Let’s get started!
Both MT4 and MT5 were introduced by one company some time back.
The best thing about MetaTrader 5 is that you can use it to trade options and stock trading.
Most traders who trade on the stock market along with the Forex market consider MT5 because it is simple and beneficial.
Currently, a higher percentage of traders use MetaTrader 4 to trade Forex.
Even brokers recommend MT4 as the best trading platform.
Yet, certain fund managers and professional traders don’t prefer MT4.
Beginners like you can benefit immensely from this platform because it is user-friendly.
If you have selected the right broker who offers MT4, you will be able to enjoy comparatively cheap prices.
Also, this is an old platform provided to Forex traders.
You must also note that this platform has a great team to solve issues related to trading.
But sadly, fund managers believe that trade execution is not as fast as they want.
This is the oldest platform remaining in the industry.
Even now, some traders prefer using this trading platform because it is easy to handle. Also, this platform has special features that can be enjoyed by traders.
This is for fund managers and professional traders because this platform has speed and high-end technology required by professional traders and managers.
This platform has some issues with the user-friendly option, but fund managers and professional traders don’t worry about it.
Finally, you must understand that the trading platform is all about how comfortable you are with the platform.
It should provide an easy path to enter and exit trades while providing the user-friendly feature.
If you select the right platform, you will be able to make a solid trading decision.
But, making profits will depend on your skill, so you can’t entirely depend on the trading platform.
Of course, it is a supporting factor, but it is not a reason to make profits.
If you want to reach success in trading, you must not think twice to get help from Forex mentors and professionals.
Anyway, let me provide some insights into some other factors as well.
Opening an Account
You must be excited about Forex trading.
But, without learning the ways to open an account, how will you even trade?
With online Forex trading, the excitement to trade Forex has increased immensely.
However, to start trading Forex, you must find a broker, select a trading platform, and then open an account. But the part of opening an account is pretty easy.
To open an account, you need certain things including name, email, address, contact number, account type, a password for the account, citizenship, date of birth, employment details, Tax ID, and a few more financial questions.
The steps of opening an account will differ from one broker to another, yet the following are the general procedures to open an account:
You must provide all the required information as mentioned.
Sometimes, you might have to fill the application with the details related to trading experience.
Select the broker and check for the suitable and available account.
After completing the application, register with your username, and then you’ll receive the credentials to your Forex trading account.
Now, you’ll have access to the broker’s client portal.
And then, transfer the deposit funds through any of the possible payment
methods to your trading account.
But remember, you might have to bear charges as per the payment method.
Once the funding procedure is complete, you can then trade Forex.
But, your broker will provide necessary guidance and ideas before you enter into live trading.
Once you complete these procedures, you are good to begin your journey.
But, are you wondering why you have to follow all these hectic rules and regulations?
Well, Forex market wasn’t filled with rules and regulations, but once the market allowed retail trading, the rules and regulations became compulsory.
If the market wasn’t strict, it would be easy for the market participants to gamble on the market. The factor of reliability will become questionable.
Also, you will not find brokers who don’t require these details.
On the other hand, if you find brokers who don’t ask these questions, then you have to think about opening an account.
But, I’ve already discussed finding the right broker, so you can find the right broker if you follow the steps that I mentioned.
Well, an important thing about opening an account is risk disclosure.
As a beginner, you are likely to be mindless about this factor, but remember, this is very important.
If you are not aware of this, you might end up losing all your hard-earned money.
Hence, you must make sure to read and understand everything before making a decision.
I want to tell all new traders not to risk the amount that you are afraid to lose.
Once you risk more than you are comfortable with, you have a constant fear.
And in case one of the trades becomes a loss you will be depressed and frustrated.
You need to be emotionally fit to become a profitable trader in the Forex market.
Making a Trade
Once you have opened an account, the next thing is making a trade.
You must begin with your trading platform.
Before you look at the chart, decide the currency pair that you are planning to trade.
And then, open the chart to find the time-frame.
Next, you must include indicators to your chart.
You can decide the indicator as per your trading style.
Indicators will make your decisions easier.
And then, place the order by considering the price moment.
You can consider “go short” or “go long” by reading the market movements.
Next, consider the profit levels and stop loss placement.
You can avoid this and trade manually, but if you don’t want to fall into risks, you must consider this step.
Through stop loss, you can avoid risks and limit your losses because it will stop your trade when the market moves against you.
And then, you have to wait until your order is confirmed.
After the confirmation, you will receive the ticket number.
This number should be used when you face any issues. You can reference this when you talk to your broker about the order.
The step of waiting is the hardest of all.
Usually, beginners don’t move their eyes from the screen. Instead, they keep staring at the screen.
But some traders leave the market to do its part and get away from the market.
However, it is better if you have a proper risk-reward ratio.
Finally, if the trade moves as per your plan, you’ll receive a profit.
If not, you’ll have to accept the loss.
Remember, you can’t expect only profitable trades from the Forex market
because it is impossible.
Hence, you must prepare your mind to digest losses if you face any. It is better to be prepared, right?
However, you’ll do great in Forex trading if you plan accordingly but not without risk management.
Most naive traders fail to manage risks in trading so that they end up losing a lot.
So, let me provide some ideas about risk management.
In order to minimize the losses faced by the naive traders, it is important to give enough importance to risk management.
Each beginner must enter the market with some understanding of the risks management techniques.
Most people enter the Forex market with the intention of making money.
Of course, you can, and it should be the intention.
But, there is a thin line between greed and passion.
If your passion is to trade Forex and make money, then you’ll achieve it.
But if you are greedy to make money, then things will not work as you want.
You already know that the Forex market is a constantly changing market, so you will not be able to remain in this market without proper risk management techniques.
Anyway, here are some tips that will help you become better at risk management.
Learn to accept losses
Think about your life.
Have you never faced a loss? Obviously, you would have.
In fact, some people fail in certain things that they are really good at.
Thus, you must accept that even in Forex trading you will face losses and just
because you face losses don’t mean you will become a loser.
Even the professional traders might have faced losses when they were amateurs.
Sometimes, the best trade can become a failure.
So, Forex is all about being persistent despite the losses and hardships.
But, you can always minimize losses by following the money and risk management.
Understand position sizing
This is one of the important concepts that every trader must understand.
If you fail to understand this, you will fail to manage risk successfully.
Basically, position sizing emphasizes the capital amount that a trader must allocate for a certain trade.
Your risk depends on the capital amount that you risk in trading.
Both professionals and amateurs must know the importance of position sizing.
There are different methods to calculate position size, so try to learn about it before entering into a trade.
Learn to handle your risk
Of course, you have entered the Forex market with the intention of making money.
But, it is not the only duty that you have when you are in the Forex market.
You must become the one who controls your risks.
It is vital for you to prepare yourself to face risks when you are trading.
You must have the hawk-eyed vision about risks in trading.
If you are clear about the risks in trading, you would be able to protect your capital.
Greed isn’t healthy
The amateur traders are the ones who have this issue.
But, even the professionals would have been greedy about making money and then, learned their lessons for life. And that’s why they have become professionals.
Just like that, even the naive traders must understand that greed isn’t healthy.
The way a professional trader reaches the market is a lot more different from the way a naive trader reaches it.
A professional trader is aware of the market and will not fall into the traps.
But, a naive trader doesn’t have the experience in trading, so he or she is likely to make mistakes.
Thus, if you want to keep your mistakes under control, you have to control your greed to make money.
Of course, if you are consistent in trading, you can make money, so don’t risk a huge amount and face losses.
Get to know hedging techniques
Every naive trader must learn hedging techniques before entering into the Forex market.
If you master hedging techniques, you’ll be able to protect your account from potential risks.
One of the common techniques is diversifying the portfolio so that your risks get diversified.
Focus on the correlation technique
If you select currency pairs with similar correlation, then mostly the movements of the currency pairs will be similar as well.
Even if they are moving oppositely, it will happen at the same time.
If you make this mistake, you must be ready to handle the doubled risks in trading.
Of course, if you have traded successfully, your profits will be multiplied too.
But, as beginners, you must make sure to stay in the safe zone.
To avoid this problem, you must learn the currency correlations.
Keep leverage in control
Leverage is beneficial until you treat it like a benefit.
If you overuse it, you’ll have to get through with the consequences.
Basically, Forex leverage helps you to trade positions that are more than your deposit.
Definitely, this helps to increase profits. Yet, you’ll have to manage risks equally.
Most naive traders get attracted to leverage, and they end up trading more than their potential.
But, if you overuse leverage, you will not be able to go a long way in trading.
Hence, you must understand that a moderate level of leverage is good for trading. And, this will help you control risks in trading.
Benefit from Stop-Loss
You can manage loss by placing stop-loss.
This advance action will protect the trader from facing higher risks.
Once you place stop-loss, you don’t have to worry about making a huge loss because the stop-loss placement will do the needful thing.
Even if the price doesn’t move in the right direction, you will not be earning a further loss.
If you cut losses short, you’ll be able to utilize that money for some better trades.
I hope you’ll utilize these tips to manage risks in trading.
Only if you manage trading risks will you be able to become successful in trading!