If you have done your homework, done your trading on a Forex demo and decided it is the right thing for you to do it is time to start investing on Forex with real money. Except it is not that simple. There are still steps you have to go through before you fund the real account to make sure you have created as low a risk situation for yourself as possible. The steps aren’t difficult, but they are a final checklist before you start.
Know Your Limits
Trading on using a Forex Demo trial should have shown you exactly what limits work best for you as far as setting parameter options. You may have found that you are adept at handling binary options to help direct your straight forward trades, or you may have found that staying with standard stops and time expirations make more sense in how you analyze and apply information regarding the market. That is one limit you have to be aware of before starting. The other is to know your financial limits. You need to clearly commit to an amount of money you can invest and commit to how you will handle profit points that get returned. If you have this outlined then you do not have to worry much about loss, it is more important to contain the loss so it does not begin to infect your off line assets.
Meeting the Right Robot
A popular way of handling Forex trading is to enlist the aid of a Forex robot. These are scripted sets of parameters and commands that automate the process of monitoring the market and triggering trades. The types of robots and their capabilities change frequently as programmers work to refine their abilities. Make sure that the robot you choose, if you are not going to do hands on trading, is designed for handling real money and not a hybrid script for working with Demo funding. Read each review you can find carefully and don’t be swayed by the hype.
Considering a Broker
Many people prefer the currency markets to the stock market because it is easier to be an independent trader. However, there are benefits to using a broker or brokerage service. The main one is their ability to provide you with leverage to increase your investment ability. Leverage is funding provided by the broker to you based on a preset percentage of your funds. For instance, they may agree to match every dollar you have with an additional $49, giving you a total of $50 to invest. This creates a higher profit return, which is how they are paid. They do not get a commission but are paid out of the spread, or difference in points between the buying and selling price. The leverage also helps to increase the return on investment you see dramatically. The risk is small, but it is present. Make sure to check out reputations and reports of returns before deciding to go with any broker. Also, consider splitting your investment funds and keeping a portion for independent trading, this can give you the best of both worlds.
Getting the Funding in Place
The next step is to create your online funding resource by transferring money to the broker or service. The minimum amounts to do so vary according to broker and plan, as to the methods you can use to get the money to them. Some brokers will only accept transfers from brick and mortar accounts and other offer electronic alternatives such as PayPal. It is very important that you are clear on how profit percentage points are translated into real funds and transferred back to you. Don’t assume that because a broker will accept funding via an electronic financial source that they will be willing (or able) to deposit profits in the same way. The fact that Forex crosses global time zones and boundaries is both blessing and bane. It means you can be on Forex in the dead of night, but that you may also be subject to the financial regulations of another country.
Keeping Track of it All
The best traders have one thing in common; they know the history of their trades. Many keep a trading journal and review the contents frequently. This not only lets you see market patterns, but it will reveal subtle patterns of your own behavior. Preference and irrational discriminations play a larger role in investment than most would like to admit. In foreign currency markets, which are largely influenced by public and political perceptions of events that may not even happen, personal preference can come out in a very large way. By keeping track of your own behavior, you can better manage your bias and stay with your analysis of potential market trends.