ODL Markets is a ‘no dealing desk’ forex broker offering foreign exchange trading, spread betting, and CFDs through the MetaTrader software.
With the growing popularity of online Forex trading comes crowds of prospective traders eager to try their hand in the currency market. However, in the procedure of learning the art of Forex trading, it is widely accepted that the majority of new traders will fail for one reason or another, being lucky not to lose their entire investment in the process.
So why does failure happen so often?
Primarily, it is because most beginners do not have a good idea of what online Forex trading actually involves and they fall into the trap of believing the hype surrounding the business of Forex trading. Novices also usually lack the necessary discipline that is a crucial requirement in currency trading, as well as often jumping in at the deep end, learning only the most primitive of guidelines.
With this in mind, these 5 tips are highly recommended to be read by anyone looking to enter the world of Forex trading:
1. Learn the basics, as if you rush into currency trading you will often find yourself on the losing end of your trades. Take the time to familiarize yourself with the basics of Forex trading and it will pay off in the long run. You should be familiar with technical and fundamental trading strategies, as well as the common indicators used across all markets, such as Fibonacci retracements, price pivots and moving averages. Most importantly, though, you should find a mentor to help guide you through the process of learning about the currency market.
2. Do not get overly influenced by the hype surrounding Forex trading. Many beginners enter currency trading with the wrong impression, probably due to the number of fantastic claims made by various parties within the Forex industry itself. Treat currency trading as a real business that requires a disciplined long term approach to be able to earn consistent profits.
3. Do not rush to open a live trading account and learn to trade with a demo account. Ideally, you should trade on a demo account for at least a few months, as this will help you get a feel for how the markets work over a longer time span than just demo trading for a couple of weeks. Those that open a live account before they have adequately traded on demo accounts often lose a lot of their investment, with their eagerness ruling over their sensibility.
4. Do not get overwhelmed by the number of currency pairs available. Whilst online Forex brokers offer a variety of currency pairs in addition to commodities such as precious metals, novices should stick to a single currency pair until they are fully familiar with it. EUR/USD is a good currency pair, to begin with, because it is the worlds most traded currency pair, has a decent daily range and is not particularly volatile (in Forex terms at least)
5. Avoid automated trading robots. Robots, or Expert Advisors, are only as good as the parameters that you set them up with and as a novice, it is unlikely that you will have the experience or judgment to operate them or to know when to close a trade manually if need be.