Easy steps to start forex trading

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Posted by Felix Okoli on Friday September 21, 2012 at 8:44:13:

Ok, let me just break it down as simple as I can. To start online forex trading in Kenya, you would need some basic things.

Things you will need
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- Internet connection
- Online trading account
- A trading platform
- Economic calendar

Can you start forex without money?
Yes you can but you will only be trading on a demo or virtual account with virtual money and not real money. To start making real money, you will need to add real money.

How much do you really need?
You can start with as low as $50 or lower if you want. However, it's best to know how to trade first before putting in more money. Some professionals trade with as much as $1000 and turn it to $1500 or $3000 within 30 days. So from $1000 is ideal for making cool money but you should only risk about 1%($10) of that in trading.

Online Trading account
There are many online brokers that allow you to open a forex trading account. Just sign up with them as you would open a Yahoo email or facebook account. You would just need to upload further documents like scanned copies of personal id like international passport, utility bill and so on. When an account is opened, you can then download the trading software that will allow you to trade.

Internet connection
To trade forex, you will need an internet connection. You need a reliable internet connection that would allow you to trade. It has to be fast enough and not too slow else it may slow down your trade actions and news delivery.

Trading platform
This is the platform you would connect to when making a trade. It comes after you install teh software you have downloaded from your broker or forex account. There are many trading platforms like Meta trader and Streamster. I prefer using Streamster due to their simplicity and since I signed up with AGEA(formerly Marketiva).

Economic Calendar
Not many newbie forex traders know about this but it can help you especially when trading during news events and you want to know why the market reacts the way it does. Economic calendars are a time based report of market news. Some come with expectations while some are just open. When trading during active US, Asian or European sessions, using an economic calendar can help keep you in the loop. You can also make big money during this period if you know how to trade the news, whether bullish or bearish.
Economic calendars I like using are the ones from either http://www.forexpros.com/economic-calendar or forexfactory.com. For my mobile, I go to m.fxstreet.com.

Tips on how to start trading
- Sign up for a free account with a broker
- Download and install trading software on your computer
- Log into your platform
- Try out the demo trade
- Execute trades like buy(long) or sell(short)
- Always use a stop loss and target point
- Make money when there is price movement
- Repeat trades for more profits.
- When more confident, trade with real money

Adding funds and withdrawal
As a forex trader, when it comes to real money, you will need to add funds or make withdrawals at one time or the other. You should know that you can make withdrawals only through the same methods you have added them. There are many deposit methods acceptable by most forex brokers and these range from liberty reserve, credit card, alertpay, paypal, bank wire and so on. After funds are credited to your account, then you can start trading with real money else you can always make do with a demo account.

Piplove: It's really all about PIPS
PIPS is an acronym for percentage in points and it refers to the magnitude of movement of a currency price. Let's say the price of Euro appreciates from $1.3000 to $1.3100, then we can say it has moved by .0100 or 100 pips. You can make big money with such price movements if you took a stand before the move.

Statistical tools
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There are many tools forex traders use to analyse and predict price movement and that's where money really comes in. The tools are not 100% perfect for prediction as price movement is really based on how the market accepts it. No one is perfectly sure how the market will react but the idea is to follow the market based on logical calculations in order to make a profit.

Most newbie forex traders however rely on things like price action in order to trade rather than analyzing with tools like Moving average or RSI. Just trading with your level of understanding and maintaining a good discipline can help you a long way.

Example of a buy trade
Let's say I got a new report that US Job report did more than previously predicted, then it's good news for the USD and placing a buy order with a target of about 50 pips could earn me some money. If I'm right with my Long trade, then I could earn 50 pips and with an investment of about 1000 units, I could have earned 1000*0.0050 = $5 if I traded the EUR/USD.

Should I create a forex e-book?
Based on my almost 3 years experience in forex trading, I am somehow thinking of creating a forex e-book that can help guys get started and making profit with this business. Anyway, whenever, I do, I will let you guys know. This post is more of a compressed report of getting started with forex trading in Kenya. There's really a lot to talk about online forex trading.