Online forex trading is a great way to increase monthly cash flow. The reason it’s so great is because practically anyone can trade successfully online.
Here are 5 tips to help you take on the trading markets like a pro.
Tip #1 – Practice Makes Perfect
Before risking any real money, it’s best to make yourself familiar with the concept of online trading and of course, the trading platform your broker offers.
Reputable brokers usually offer demo and practice modes for new traders. This gives you a hands-on experience, letting you simulate actual trading conditions, without risking any money.
#2 – Don’t Stray Away from Your Trading Strategy
Your online broker should offer a training and education program, helping you build a solid and customizable trading strategy.
Once that strategy is finalized, it’s important to never stray from it. When your money is involved it can be very easy to get emotional, so don’t do anything hasty that steers too far away from your original plan. The markets are dynamic, and often you may lose money before making money.
#3 – Start Small
Before going all in and trading stocks and indices, it’s best to start with assets that tend to be less expensive and volatile.
Trading currency pairs is a great introduction to online trading. Major currency pairs like the EUR/USD tend to offer higher leverage rates, with lower spreads, so you can open larger positions for less money. Once you’ve mastered currency pairs, you can then look into commodities like gold and oil, and then stocks and indices.
#4 – Always Set a Stop-Loss and Take-Profit
You never want to risk more than you’re willing to lose. When opening a trading position you will have an option to set a stop-loss limit. In case your position takes a bad turn, it will automatically close when it hits that limit.
It’s also just as important to set a take-profit limit. Take-profit limits work similarly to stop-loss, and will close a position when it reaches a certain profit level. By closing profitable positions, you can make sure your account is making money, in case the market gets too volatile.
You should set a stop-loss and take-profit on every position you open.
#5 – Choose the Right Broker
Choosing the right broker is one of the most important decisions you’ll make in your trading career. You want to find a broker that offers what’s mentioned above, and is fully regulated in your region.
For example, online broker UFX.com offers a large selection of assets, a practice mode with $10,000 in virtual funds, and is fully regulated by CySEC (Cyprus Securities and Exchange Commission) and complies with MiFID (Markets in Financial Instruments Directive). You can read more about opening an account on their website.
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