Sometimes it's not so obvious what the process to getting started in Forex actually is. It's pretty easy to get lost in the technical jargon that's out there. Also there is such a wealth of information that is so scattered around the net that you can easily feel overwhelmed. So I decided to write this article to reach out to anyone new who wants the information given in a step-by-step manner which is easy to follow.
First things first, you need to familiarise yourself with all the trading terminology. It would be too much to write in here so the best thing to do is to view the full list and go through it via the terminology link shown in the resource section below.
Secondly, we're going to need to set you up with a forex demo account (see in resources below) where you can practice. To speed things up, use the demo link below to sign up with our preferred broker - they offer excellent terms and are one of the biggest brokers in our world. Make sure you put in your correct email address when you register because they will be sending you your login information.
Download the MT4 platform from the broker page to your computer and run through the installer wizard. Once this is done you can open up your trading terminal, which, if you've used our preferred broker, is installed as "FxPro - Metatrader 4". You will receive all the information to put into your account via email. So check your email for this. Go to File -> Login and enter the login information from your email and you're up and running! Nice.
Now, if you've never "played around" with the Metatrader 4 terminal, or any other terminal for that matter, it is a good idea to have a look at what different things the software offers you. You're hooked up on a demo account so you cannot do any damage so don't be afraid to try figure out what different things do. Some are self explanatory, some are not - but have some fun with it anyway.
Once you've gone through the first introduction to the system, now its time to learn how to create your first order to buy and sell a currency pair. Select the currency pair that you want to trade from the left-hand menu that lists all the currencies. Right-click on the pair and click on "New Order". This will pop-up a window enabling you to set the parameters of your trade - the "Stop Loss" and "Take Profit" (check out the terms from the terminology listed below if you're unsure what they mean). You can also do this directly from the chart which you want to trade from by right-clicking on the chart and again clicking on "New Order". You then click on either "Buy" or "Sell" and you have just created your first order.
To close the order you need to go to the bottom of the screen in the "Terminal" panel under the "Trade" tab. Here you can see your open trades. To close it, double (left) click on it, and hit the yellow "Close #... " button. That's it, you've just completed your first trade.
A word of caution, even though it is very easy to open and close a trade, and therefore make or lose money, don't fool yourself into thinking that you can make money on a consistent basis without enough practice. Any person can kick a ball well once or twice but only a person who has practiced kicking it long enough can do it well consistently over time and make a living from it (i.e. a pro footballer!). So let me just remind you not to commit the mistake of going straight to a live account or worse live trading.
As a rule of thumb, make sure you can be profitable for a minimum of 3 months before going onto doing anything on a live account. This is the best lesson I can give you so far and it will be the case for the first few months of your trading career.
So now that you've gone through the setup of the terminal and know how to open orders, the next thing to learn is one of the most essential parts of any type of financial trading - RISK MANAGEMENT. I have a great lesson in store for you next so don't miss it and check it out here.
Demo account link
Forex Basics Terminology
August 10, 2012
Getting Started in Forex, a Step by Step Guide
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