Are you interested in investing your money? One option is the Foreign Exchange Market, otherwise known as FOREX. Before you put your money into it, like other investments, it would be wise to learn what you can for success. In addition, only use money that you can afford to lose! Following are some tips that others have found valuable in their FOREX endeavors, read on:
Watch the home location of your broker when picking a Forex broker. The majority of fraudulent Forex brokers are located in just a few locations: Boca Raton and other parts of Florida, southern California, and Russia. Not all brokers in these areas are scammers, of course, but you need to use some extra caution if you see a broker is located there.
Be aware of the risks of Forex trading. Trading in any market carries some risk and Forex is no different. Obviously, you should never invest more money than you can afford to lose. In such a volatile market, there is always the chance that you can lose your entire investment. Trade wisely.
If you do choose to take advantage of leveraged forex trading, minimize your risk as much as possible. Many forex brokers will allow you to leverage as much as 400 times the amount of money in your account, which can be a big problem should your investment not pan out. As a beginning trader, limit yourself to no more than a 10:1 leverage ratio.
Try splitting your trading capital into 50 equal parts. This can keep you from having major losses by having everything on the line at one time. This can also keep your losses down to about 2%. If you have a few losses that occur, you won’t be taking any major hits to your capital.
When pursuing forex trading, a great tip is to always carry a notebook with you. Whenever you hear of something interesting concerning the market, jot it down. Things that are of interest to you, should include market openings, stop orders, your fills, price ranges, and your own observations. Analyze them from time to time to try to get a feel of the market.
To find reports of forex brokers and brokerage companies that are scamming people, do a Google search using the search terms [company name] + [scam]. This helps you quickly find reviews, blog posts and websites with fraud complaints against the company which allows you to avoid shady brokers and brokerage companies.
Do not place multiple positions of identical size on forex markets. The size of your position should be calculated as a percentage of your available liquid capital, not as a lump sum. When you place one position, your liquidity drops, so your next position should be smaller. This will prevent you from unintentionally taking on more risk than you want.
Hopefully, the tips in the above article will prove to be valuable to you in your FOREX endeavors too! Apply the information that will fit your own circumstances. Remember, like other investments, only use money that you can afford to lose! Keep up-to-date with information that will help you to make wise decisions, so that you can succeed!