The high liquidity of the forex market and the volatile nature of currencies is a perfect combination that creates countless opportunities to make money from trading. Due to this reason, many people prefer to trade forex over other asset classes. Many traders often enter the market with high hopes, to make huge profits. After all, trading only requires sitting in front of our desktop and these days we can even trade on our smartphone by installing a trading app. But building a successful career in the inherently risky Forex market requires a lot of learning, preparation and perseverance.
What we need here is patience and playing it safe until we crack the code of profitable trading. However, getting started with online forex trading is easy and quick if we keep the learning part aside which is a time-consuming process. In this guide, I will take you through the steps that have to be completed to kickstart your journey in the lucrative currency market.
How to choose the right online Forex trading platform?
Traders must use a feature-rich platform for trading to analyse the market information and implement the trading decisions that they make. It is not just a random software but a complete package of all the tools you have to use for a seamless trading experience. Therefore, traders must be careful while picking a platform for forex trading. Another thing to note here is that traders can only use a platform that is supported by their broker. MT4 is a top platform that almost all brokers offer to their clients. You can download the platform from the broker’s website itself.
MT4 was launched in 2005, yet it is the most preferred platform for forex traders simply because it is user-friendly. The same company then launched MT5 in 2009. This one is superior to the first version with additional tools and advanced capabilities. MT5 can be a perfect option if you want to trade multiple markets alongside forex. MT5 provides more options, which makes it a perfect companion for modern traders as it helps them implement complex strategies.
Besides MetaTrader platforms, there are other trading platforms that you can check and consider using. Many brokers provide their clients with numerous options to choose from, so you can check out all the trading platforms, their features, tools and other important points before picking the right one for yourself. The platform must have customisable charts with technical indicators and different time frames, as we need them to analyse the market and make informed trading decisions.
You can consider platforms like cTrader, ActTrader and more based on your personal preferences and requirements. Still, MT4 is the most commonly used due to its simple layout, which makes it easier to navigate. Those who are just in the learning phase should start with demo trading to get familiar with the platform and trading tools that are available. Demo trading is more like a practice session to sharpen our trading skills by practising with these tools and placing trades in real-time market conditions.
The best thing about a demo account is that our capital remains safe, as we get to trade with virtual funds in a risk free environment. So, you can freely learn and trade without having to deposit any money. Opening a demo account is very easy and you can get it within a few minutes after registering with your name, phone number, address and email ID.
Setting up an online Forex trading account
After demo trading, it is time to break into the real space to make some real money while being exposed to real risks. I am talking about the live trading process for which you have to open an account with actual funds as a deposit. For this, you have to filter your broker options and select the best one. Once you have made a final choice, you can sign up for a live account by submitting your personal details and a soft copy of your valid ID proof for the KYC procedure. Opening a live account with a legitimate broker will always require online identity verification.
If the broker is providing different types of accounts, you need to select the most suitable option after considering the minimum deposit requirement and other features you get. You can check out brokers offering commission-free, swap-free, micro and standard accounts etc. After registering your account, log in to the trading platform using the login credentials provided by the broker.
Understanding MT4 Platform
You don’t have to think twice before choosing MT4 as it is being used by millions of forex traders all over the world. The MT4 user community ranges from beginners to expert-level traders and it is still growing even after all these years. The power of MT4 lies in its simplicity as we can avoid the confusion of having to make a choice from a number of complex tools that we don’t even need. Basically, MT4 is a platform for minimalist traders who don’t want to crowd their charts with unnecessary add-ons. But this does not mean that MT4 does not give you options to choose from.
Before you start using MT4 for trading, go through the charting tools, technical indicators and analytical objects and you can find everything that is needed. You will also get different types of orders which include both market and pending orders.
Advantages of online Forex trading
A number of advantages have made the forex market an attractive space for all as you get more than enough trading opportunities to make consistent profits. However, Your profitability in the long run depends on your skill level, strategy and discipline. Having a sound strategy with a favourable risk/reward ratio and optimal win rate can take you a long way but you must be able to control the losses as well. Hence, risk management is something that decides your future prospects in forex trading.
Now, coming to the benefits you get from being a trader in the forex market, the low trading cost has to be mentioned first. The only costs involved in currency trading are the spreads and commissions that your broker charges. You can even find a commission-free account to make things easier. If you are a swing trader or position trader planning to keep the trades open for a longer duration, you should also consider the swap/rollover fee. But the charges are not hefty and you can minimise them by selecting the right broker which is an advantage.
Not to forget the benefit of leverage as we can grow our account and maximise the profits even with a small amount in hand. The high leverage offered by forex brokers is definitely helpful for magnifying your potential gains. Apart from active trading, you can also engage in passive trading which allows you to diversify for earning more as a beginner.
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Final Words
In the end, indulging in in-depth learning and taking your time to tailor a sound forex strategy are the keys to unlocking success as a forex trader. But once you attain success, you have to keep learning and improving to retain it in the long run.
