The forex market’s $5.6 trillion per day trading volume makes it one of the biggest markets, dwarfing the equities and futures market, according to DailyFx. Financial institutions, other corporate institutions and individuals are all trading in the forex and commodity futures markets. And you should not be left out of this highly profitable market. The risk is high but so is the reward. Here’s how to start, if you’re a beginner
Get a Broker
You need a broker to start trading forex and commodity futures online. There are many of them online. Just google and you’ll find hundreds of them to choose from. Make sure you choose a good broker who is giving unbeatable spreads, no commission, and importantly a fast platform. Once you find a suitable one, install or bookmark it on your device (pc or mobile or tablet). There are reputable names out there, and bad ones too, and I suggest you pick the tried and tested brands.
Start with a Demo Account
Don’t just jump unto a live account yet. If you’re new to forex and commodity futures trading online, I recommend starting with a demo account, for at least a month. Brokers allow you to open a demo account, which does not require you to fund with your cash. The demo account mirrors the live account – live rates, and you can trade like it is a live account. Just that, your profits or losses are not going to hit your pocket.
Whilst using the demo account, I recommend you take the opportunity to learn as much as you can. Demo accounts allow you to see how the market works. It’s the time to make all the mistakes. And to learn from your mistakes. It’s also the time to discover which currency pairs and commodities are your favourites. Importantly, it’s the time to discover yourself. Forex and commodity trading requires discipline and the right temperament. You should also familiarize yourself with the trading platform you are using. Know where to find each button and configure the interface in a way that suits you best.
Open a Live Account
Open a live account only when you feel you’re ready to trade, not when you think there’s money to be made. There is always money to be made. That’s my advice to people who tell me they want to trade forex and commodity futures. As a beginner, I advise you start with money you’re ready to lose. Do not start with all your savings, simply because your demo sessions yielded you a $100,000 in profit. Trading on a live account is far different from trading on a demo account. Your temperament is called on at every move. If you’re not careful, you’ll lose your head and a lot could go wrong. Just stay calm and be positive.
Many beginners are in a hurry to rake home a $100,000. They are highly inspired and energized when they make $200 on a $10,000 trade in less than an hour. And the adrenalin shoots up into the roof. Next is they are biting big –taking big positions. That’s not how to start trading. I’ve more than tripled my capital in 11days of trading, but everything came to zero a few days later –because I began taking big positions. It’s always advisable to sail gradually through your trades. Don’t bite too hard until you have real teeth.
Follow these simplified steps to your first online forex trading. For readers in Ghana, Kenya and Nigeria, you should be excited about this. The industry isn’t vibrant yet and those who get ahead will land great jobs and some may even start their own shops.