Foreign exchange? Bonds? Stocks? Deposits? It seems like everyone is putting their extra money to work these days, investing in something or another. If you’ve read the first line and have no clue what we’re talking about, you should do some research, because you are missing out on good opportunities to make something out of your spare change. In today’s global reality, technology has made investing very simple and possibilities are endless.
Having said that, you must also remember that with every opportunity there’s also some risk – especially if you’re new to the game. And we’re not just talking about making bad investment decisions. You should be extra careful of the many crooks and scoundrels out there, who may promise you the moon and stars, but end up taking your money and vanishing into thin air.
Even if you’ve never invested a cent in your life (yet), you’ve probably heard of quite a few forex trading scams. While the scenery changes, the idea behind the mechanism is usually the same. A “trading website” lures you to deposit money in an account and to start trading foreign currencies on their platform. At this point, one of two things happens: either you lose your money after getting bad investment advice from the website’s “brokers,” or you gain money but when you want to withdraw it, there’s no one to talk to.
How To Start Forex Trading
Starting forex trading is similar to equity trading. You need to know some basic steps in order to get started with the forex trading regulations. So, without waiting any further, let’s learn more about forex trading regulations and how you can get a kick start with your forex trading.
Learning Forex
The first step is to learn more about forex trading. Forex trading is like a project that you need to learn before diving into. The leverage ratios for forex trading are more than the equity trading, so knowing more about forex trading is more important than just starting it. There are many online courses available for new traders to learn forex trading tips and tricks, perfect their trades, and get the best out of the trading market.
Setting Up Account
Then you have to set up an official brokerage account. This is where you will be able to input your knowledge and can officially get started with forex trading. Remember, the brokers do not charge you money but make money through your set pips. These are buying and selling spreads or prices that allow them to make money easily. It is feasible to start from a low margin if you are just beginning. Start with investing around 1000 dollars only and then take them up from there onwards. Once you feel comfortable with the market, you can easily increase your investments and increase your profits as per your choice.
Trading Strategy
Setting up a trading strategy in the forex market is essential. Most of the time, predictions are not accurate as you cannot predict the market movement, so having a trading strategy can help you out in such circumstances to have a guideline and save yourself from some huge losses. Who wants a loss, right? So, a great trading strategy is based on your finances and situation. This involves risks that you can tolerate if there is a loss and includes rewards that might help cover those losses.
Check Position
Checking the market position is another important step in forex trading. The majority of the trading applications allow you to keep an eye on the daily trades positions, but you must check your position every day when the market is almost closing. Always check if you have enough cash for future trades, and there are no pending trades that might wash out all of your cash in one go. So, keeping an eye on these is vital to get a complete hold of your forex trades.
Excuse Emotions
When you are a beginner, you have unanswered questions, and sometimes if you see loss as you are trading with your own money, it makes you anxious and sad. To get great profits and become an expert while trading forex, you need patience. You may not have that energy as a new trader, but it is better to excuse your emotions. You should never get too invested in your trading, as obsessing over the questions that have no answers might make you confused and make you get more losses than profits. So, always be rational about your trades and always get the best possible outcomes.
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The Golden Rules for Trading in Forex
After learning how to start forex trading, you might need some help to execute the perfect trades, won’t you? If that is the situation, then here are the ten golden rules that will help you get the perfect trade strategy and some cool profits as you dive into the forex world.
1. Properly Funded Account
The first tip that we can give you is proper funding in your forex trading account. That being said, let’s move forward. When we start trading, most of us go with the demo accounts to train ourselves for the real market. The demo accounts usually come with a $3.000 or more balance that is usually difficult to invest in real life. So a properly funded account matters that helps you manage your returns and profits.
2. Never Risk Capital Per Trade
When going for trades, always keep your capital safe. No one wants an empty account where they cannot trade or gain profit, right? This happens when you do not play safe and risk all of your profit in one go along with your investment. We can never trade a hundred percent of our investment and profit in the forex trade because if we lose it, there is no way to get it back. So, the best possible way is to save five percent of your capital per trade simply. This way, you will not have to risk all your profit and save yourself with worse trades that might lose all your profit. So, always keep an eye on the capital and set a perfect trading style for your trades.
3. Never Try Catching Turns
Catching a trade call is easy when you have unlimited equity, but it does not mean catching every trade call even if you are unsure about the result. There are tops and bottoms in forex trading, and you should not try to catch them every time. If you are tempted and go at every trade call you face while not analyzing the market, you might be taking some unnecessary risks that you definitely do not need. So, avoid such catches that might leave you without profits.
4. React not Predict
Predictions are not something you should look out for in the forex trading market. You need to keep an eye on the news, signals, and hints provided through the market and then take action as soon as possible. If you wait to predict or lose your signals, you will miss your profit, so catch them when you can.
5. Stop Overanalyzing
Profitable trades are lost due to procrastination and overanalyzing. To get the perfect profit and price for your trades, dive straight in. You should wait for the indicators, but if you trust your intuition, you can have the best trading plan than anyone else. You can never be wrong or right till you play your trade and get the best out of it. So, stop analyzing and find your best call.
6. Keep The Plan Going
Always go for your trading plan and do not listen to others. If your friends, websites, or anyone is telling you that the trade call is this or that, do not believe it. Simply go with technical aspects and other things based on trends and follow your selling and buying trade call plan to get the best out of your trading.
7. Be Trendy
There are time frames present that you need to follow because the trend is what tells you how the market will move. It would help if you usually looked at the weekly trend, then went for the daily trend, then went for shorter time frames such as hourly and second time stamps. These will help you learn the pattern of the flow of the market, and you can easily learn forex trading in a short period and can excel with ease. Knowing the timeframes and following the trend is suitable for setting your trade call and getting the best out of your trading. Also, remember never to give up no matter what. You might face huge losses or difficulties while reading the chart, following the trend, or getting the trade call, but remember to do whatever you want with proper knowledge and confidence.
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Are All Trading Websites Operating as Scams?
There are a whole lot of these shady websites out there. Trading through a financial institution like a bank or a well-known brokerage firm is always safer, but they offer limited service and usually charge high commissions and fees. Their service hours are also limited, making them not ideal for people who wish to trade anywhere and at any time.
If you decide to go for a trading website, one good way to know if it’s an honest one is simply to Google its name. In seconds, you can get access to the company’s history and to reviews written about it. Take a moment to read some of these reviews – both positive and negative – to get a better picture. Remember to also Google the name of the company which owns the site (go to the ‘About Us’ page on the website, the company’s name is usually there).
Is There Anybody Who Supervises These Websites?
The most important factor you should be looking at is whether the forex trading company is regulated and licensed or not – and by who. There are a number of official regulating bodies based in different places around the world, and the trading companies will proudly display their regulation and license on the website. If no information of this sort is provided, assume that the website is not regulated and, therefore, isn’t where you want to invest.
However, even when going for a regulated website, you need to take a closer look at the type of regulation. While these websites serve traders all around the world, they have offices somewhere and are therefore under the laws of a nation – including its financial regulatory bodies. It’s no secret that these sites usually choose to have their base in countries where regulation and inspection is lax. That’s why you need to know a thing or two about these bodies as well.
How Do I Know if A Regulatory Body is Strict Enough?
There’s no way to really compare these institutions, since each one abides by its country’s standards. There are a few ways to evaluate them, though. First of all, regulatory bodies of larger countries tend to be stricter. A forex website regulated, let’s say, by American institutions (the CFTC and the NFA) is more trustworthy. Same goes for EU member countries.
However, the best way to know a thing or two about regulatory bodies is to read about them. Asking Google here is also a good option, but you can also consult with professionals – your accountant or insurance provider, for example. Bottom line is that you should be aware of who gives the approval stamp to the website you want to trust your money with, and that you should make an effort to gain as much knowledge as you can before taking out your wallet.
I’ve Been Scammed, What Can I Do?
If the crooks have gotten to you, don’t panic. We can help you in your efforts to retrieve your money. We’ve been doing it for a few good years now, with over 500 satisfied customers to our name. Simply fill out the ‘free case review’ form on our website and we’ll get back to you ASAP. Remember: The sooner we start the legal process, the higher our chances of success are.
