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5 ways to make the most out of forex trading

4th June 2017 Print

If you've decided to start trading Forex, good for you. You've taken a step towards increasing your earnings without doing too much extra work. It’s an accessible, relatively straightforward way of making some extra money on the side. For some people, it even becomes a full time job.

But there are those who succeed and those who fail too. In order to ensure you're one of the former, here are 5 ways to make the most out of Forex trading.

1. Choose the right Forex broker

I’m sure you know this already, but not all Forex brokers are made equal. There are those who are out there to help you, and those who just want to take your money. Do you know how to tell the difference?

A good Forex broker will have certification from the authorities in an easily recognisable country. For example, it will be certified by the UK or US regulators, and not only by those somewhere like Cyprus (where laws are more lax).

Another way to tell if your Forex broker is there for you, is if they have a trading academy.

2. Learn the fundamentals

A trading academy helps you learn the ropes before you get started. Good Forex brokers provide all the resources, online videos and tutorials to get you going. They even provide classes that will help the more experienced Forex trader.

Although Forex trading is immediately accessible and does not require prior experience, you will do much better if you've done the research beforehand. Yes, you can learn on the job. But the learning curve will be much bigger if you've already got a basis on which to stand.

3. Use MetaTrader 4

Another thing your Forex broker should offer is metatrader 4 trading platform (MT4). MT4 is the universally accepted gold standard of Forex trading platforms. It is what you use to actually make the trades, and while there are others out there, none of them compare - not even MetaTrader 5!

MT4 is so great because it is intuitive, lightweight, and comes with a large array of tools and instruments.

4. Use Forex indicators

MetaTrader 4 comes with a range of Forex indicators. These tools, such as the momentum indicator, give you insight into what exactly the market is doing and how to take advantage of it. The momentum indicator, for example, shows whether there is currently a trend in the market, and how much momentum it has gathered.

5. Trade responsibly with leverage

Because Forex brokers offer higher leverage than in any other markets, you have the potential to make a lot more money than you invest. On the other hand, this also gives you the potential to lose a lot more.

So, you should use leverage if you are to make significant money. However, it is imperative that you are responsible with it. Just because you can get leverage of 200:1, does not mean you should. Start small, and once you've got the hang of it, build yourself up.