The Forex market has a lot of advantages and that’s why so many people want to trade it. But before you start trading Forex, there are a few things you need to do first to make sure you cut your risks to the minimum.
1 – Understand that there is risk involved. This is one of the most basic and also overlapped conditions to trade in this market. If you want to succeed, probably even make a living from Forex, you need to understand that you will win and that you will also lose. You should never trade with money you can’t afford to lose. Believe me this will have a major negative impact in the way you trade because this will directly affect your emotions. It will pressure you to make money: if you have a win trade you’ll think you could have done a lot better; if you have a loss, you’ll think that you’re a terrible trader and that you need to recover what you lost as soon as possible, and this will make you lose money even faster. Being aware of this condition but also of your emotions is critical if you want to be successful in this market.
2 – Getting Forex education. Forex is a unique market. Even if you already have experience trading other financial markets such as stocks, options, futures, or others, you’ll find out that this is a particular market, with its own advantages and disadvantages. It’s truly important to learn about Forex, to understand how things work… And I say this even if you’re thinking about buying a Forex robot that does all the work for you. If you don’t know anything about Forex, if the robot starts to lose you money, how will you be able to change it to be profitable again? How would you understand the inputs behind the robot. Besides, there are lots of currency pairs you can trade. Each one has its own personality and each one has its best hours (when it has more volatility and liquidity).