There is no doubt that Forex trading has gained immense popularity in the last decade. The reason is the massive transition of newbies from stocks and other investments to test their skills with the world currencies and get started in Forex. The latter is considered the purest form of trading, but winning in this arena is not as easy as you might have thought from ads.
Learning the principles of currency trading is challenging. If you decide to embark on this path and start trading on Forex, take into account that it will not be easy to learn all the details of the work. You must start from the very beginning, and you will not be able to achieve a decent result quickly without knowledge. In addition, currency trading entails a high risk, which is warned by statistics about a high level of failures in this market.
Forex as a Freelance Job
Undeniably, the market is attractive to those looking for the freedom they can obtain thanks to freelancing, i.e., being their own bosses. To enjoy this freedom, you need to prepare for serious education, regardless of where you live, in Nigeria or any other country, and regardless of the previous experience.
From the very first steps, you must approach Forex trading with discipline. You must use a step-by-step strategy that clearly identifies your every move in the market. From opening the first position, its session tracking to closing a position for profit or loss.
How to Start Trading Forex
Do not rush into the Forex market. To get started, learn the theory of Forex trading. Find tutorials, thematic information sites, blogs, and other sources of information. Set yourself a goal, not to gain absolute competence, but to become familiar with the terms, conditions, and activities associated with trading.
Once you have learned the basics, you will need a competent Forex broker like Forextime. The broker’s competence will be determined by the availability of a free demo version of the system. Using it, you will get the first practical skills of working on the Forex market. As soon as you feel a sufficient level of knowledge and comfort in working on the demo version of the system, you can continue. Switch to the real trading mode and start mastering Forex investments and other transactions implementing the theoretical knowledge you have obtained.
Basic rules to start trading Forex
Now, let’s look at a few basic rules of work related to money and risk management, fundamental and technical analysis, and then — the development and implementation of a strategy.
Rule #1: Take your time
Never spur yourself on to chase gains or risk money that you cannot afford to lose. Haste and unnecessary risk will only lead to quick failure. Take your time to think and analyse the situation before you act.
Rule #2: Losses
Always remember that losses are part of the game. Your goal is to cut your losses, not eliminate them entirely, which is impossible.
Rule #3: Always go with the flow
If the market moves against your strategy, close the deal as fast as you can. If everything goes according to plan, keep up with the expected exit point and then get a profit.
Rule #4: Risk/reward ratio
The rule of risk is that you can lose more than 2%-3% of your account balance in one trade. If your balance is $1,000, then your loss limit is $20 to $30. Set your stop loss at $20 and your exit point between $40 and $60, depending on how aggressive you want to be. Your risk to reward ratio would then be 2:1 or 3:1, respectively. The point is that there will always be losses. You should be able to pay them off until your strong profit trend emerges.
Most of your profits will be generated from several trades, while most small losses and wins cancel each other out. This means you should never have more than two active trades at the same time. You can change these settings over time, but safety comes first. Remember this rule until you can confidently call yourself an experienced trader.
Rule # 5: Keep it simple
Newbies tend to load every available indicator or analysis tool — the result is chaos. It is better not to overdo it with available tools. Focus on one pair with several tools that will definitely help you. If you have three losses in a row, leave the market for a while. Never trade when your mind is in turmoil, and keep a journal to assess exactly what you did right and wrong. Finally, learn, learn, and keep learning!
