The best way of getting a foot into the forex trading world is by starting to trade part-time until you fully understand the workings of the financial markets. As a new trader, your best chances of making a success of your new venture is to use a simple strategy that requires very little of your time, yet allows you to get the feel of professional trading. Any trader who tries out a new strategy should first focus on perfecting the execution while making a profit is a secondary goal.
Preparation is the most important part of trading
To succeed in trading, start with the basics and take the time to get to know all the ins and outs before risking any real money. As a new trader, you’d first select a good broker and trading platform. Spreads is the most important factor to consider after which functionality and ease of use should be major role players. Spreads are measured in pips and the higher it is, the more each transaction cost.
In Forex trading, brokers often offer traders leverage on their accounts. Leverage is both trader’s greatest advantage and vastest risk. Keep leverage to the minimum for your own protection.
Part-time traders can benefit tremendously from brokers offering a functional mobile app – it allows you to manage open positions while continuing with other responsibilities. Another important word of advice is to make use of the Demo account option offered by all good brokers.
Once you know your platform exceptionally well and are comfortable with executing trades, you can start thinking about moving on to trading with real money.
How much to invest
All brokers have minimum investment requirements to which traders should adhere to. For some, it may be a good idea to start with investing the minimum amount and take a few test trades because there is a difference between demo trading and real trading. Please be advised that minimum investments are too little to trade with profitability and the investment will probably be lost.
The golden rule of thumb for any investment is to invest as much as possible but never invest more than you can afford to lose. Never borrow money to trade. Trading is a high-risk venture and new traders often wipe out their accounts completely – it’s not worth taking the risk with money that you really need.
Becoming a part-time Forex trader takes careful preperation, some learning and a lot of trial-and-error experience. Trading is not a get-rich-quick scheme but anyone willing to learn and do the work can become successful over time.
Read also Part 2, Part 3 and Part 4 of the “How to become a part-time Forex Trader” guide.