What you need to know about Forex

To successfully trade on the Forex currency exchange, a novice trader needs to know a few key points. These are the very basics of trading. Without them, you'll almost immediately lose your first deposit.

It will take a little time to learn these issues, but it will be worth it in the profit you receive.

This article will discuss some important technical aspects and practical trading issues that form the basis of any successful trading and without which you simply cannot become a successful trader.

Forex is a place of equal opportunity, where it is just as easy to make money as it is to lose the money you have.

Anyone has the same right to change their life for the better. The key is to understand the requirements of the currency exchange and what generates profit.

1. Choosing a broker is a complex and challenging process. The best brokerage company should offer good trading conditions and a reliable trading terminal.

Trading conditions – spread size for your currency pairs, minimum deposit size, order execution options, overnight fees, and trigger conditions for pending and stop orders.

Technical aspects include a stable connection with the broker, no requotes or slippage, and the availability of alternative methods for managing open positions (phone, Skype, etc.).

2. The basics of technical and fundamental analysis – without these, you simply shouldn't start trading; they form the foundation of any Forex strategy. Moreover, it's not necessary to delve deeply into the theoretical aspects; it's enough to have an understanding of how to analyze an existing trend and the main fundamental factors that influence the exchange rate.

3. Trading terminal skills – you must be able to correctly open any type of order, including pending orders. Understand the principles of placing safety orders – stop-loss, take-profit, and trailing stop . Be able to customize news feeds and perform some other operations.

4. Using indicators – this group of tools is essential for any trader, so you should know how to install and configure a particular technical indicator and for what purposes it should be used.

Unlike advisors and other automated trading systems, this point is quite useful in real trading and is a must-learn.

5. Fundamentals of capital management – ​​in the context of Forex trading, this phrase sounds a bit grandiose. Your task is simply to correctly determine the ratio of trading volume to the amount of your deposit. Trading is based on the principle that the amount of funds as collateral should not exceed 10% of the total deposit.

6. Trading strategies – to create your own trading strategy, you should first familiarize yourself with the most popular Forex trading strategies . You can then decide which of the options discussed is best for you, based on your personality and financial capabilities.

7. Psychology - or more precisely, knowing what you should never do, namely, holding on to losing trades while harboring false hopes and trying to recoup losses if you've suffered a large drawdown.

The above-mentioned topics should be tested in practice. In this case, it's best to use a demo account to test all the knowledge you've gained without risking your own funds. Only after you feel confident enough should you move on to live trading.

The most important thing to know and understand while learning is that trading Forex using only intuition will quickly lead to a loss of your deposit.