Currency trading starts with having a trading account that is often managed by a seasoned broker/trader. The term broker is a misnomer because brokers in the strict sense earn commissions from selling and buying movements. In forex trading, you earn or lose without these standard commissions.
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Veteran currency traders hold a number of trading accounts with some trading variously and concurrently on the seven or so highly volatile high profile currency pairs like the EUR/USD or USD/JPY while having accounts on the more exotic less traded currency pairs with a relatively incremental fluctuations. But for novice traders, you need to take it one step at a time. Start with one account.
When starting an account for currency Forex market trading, unless you have oodles of surplus money you can afford to lose on the fly, go for a mini-account. These accounts allow you to trade in smaller than the standard $100,000 lot sizes, say $10,000 and allow margins of 50:1, meaning you can put real money down for as low as $500 for each trade.
More often than not, having an account with a good currency broker can be crucial to opening up your opportunities. Make sure that the online broker/trader can be trusted and will be there to help you for technical questions about the online platform both you and the trader will use.
Currency trading is now done online with various traders offering a currency trading platform or automated online system. For novice traders, get onboard one that allows you to have demos, sample trading and hands-on training using dummy accounts and dummy investments. Despite reading about it, nothing beats actual hands on. But only if it doesn’t mean losing real money from it.
Have in mind that Forex trading is all about managing risk. Never be too greedy. Currency trading has the promise to be most lucrative but you can’t be too greedy when you’re on the roll and you can’t wait too long for a currency position to get better. Apart from knowing the short term future probabilities, managing the risks means short-term trade placements.
Place your trade only when there’s a high probability of a currency falling or rising, and then move for a stop to exit while you’re ahead. It there’s anything constant about a volatile currency position is that those positions hardly ever last for more than a few days unless you have made your fundamentals well covered to indicate a longer position. Currency Forex market trading offers the highest profits on volatile currencies because they are the riskiest. As they say, no risk no glory. But you have to know when to stop before you lose everything. Corollary to that, you should know when to get out when you’re doing good.