Written by: Casey Stubbs Published: January 05, 2015 at 12:58 PM

So, You Think You Want to Start Trading Forex…

The first great thing you should know about getting into Forex trading is that there is a ton of information available to you. If you take the time to do your research, you will find that you can learn just about everything you need, right from your laptop.

Once you have done some research and decided that investing in the currency market makes good sense for you, get started with the following steps:

Start Shopping For a Broker: Although you may find hundreds online, begin your search by narrowing the field. Ideally you want your broker to be within the confines of the United States, or at least in the U.K. or other regulated nations. If you sign on with a broker in Sri Lanka, or other unstable or underdeveloped nations, your account is not secure.

Now that you have narrowed down your options, look for the following key points on their website, or call them if necessary. If they cannot provide the right answer, then mark them off of the list:

• What countries are they regulated in? While you have already honed in on the US and or the UK, it could be helpful if the broker has also taken the time to be regulated in other countries.
• How large is the broker and how much capital do they keep on hand? US regulations are now making sure that brokers are funded to handle the volume of trade they engage in.
• Is there 24-hour support? This is going to be especially useful when you get stuck while trading the Yen in the middle of the night.

Once you have narrowed down the choices to 3 or 4, start trying them out. Respected brokers are going to offer you access to their trading platforms via a demo account, where you get to make trades live, using play money. This is a great way to learn the various functions available in trading platforms and which ones are most beneficial to you.

The demo account is a unique advantage to Forex trading that you don’t find in other markets. You can use these to not only find a broker, but to practice your strategies and learn how to make money trading currency.

Look for a Mentor: A good mentor is going to be a successful trader who is willing to share his trading techniques with a newcomer to the Forex market. This should be someone you can trust, but also someone who is not going to be shy about letting you know when they think you are getting trading wrong.

The best way to find a good mentor is by asking other Forex investors. They will be able to steer you in the right direction towards individuals who are good mentor candidates.

Getting the Right Tools for Trading: Besides a good internet connection, start up capital, a mentor and a broker, the only other thing you really need is a journal. Keeping a Forex journal allows you

to track your progress and ascertain where you are doing well, and where there is need for improvement.  Your mentor is going to want to see that you are using a journal, and that it is full of relevant information about your daily trading activities.

Sit Down and Set Goals: For optimal success in any new venture, an individual should have clearly defined goals. For a new Forex trader, these should be specific to learning as much as you can about Forex trading, rather than working towards a new Porsche.

Make it your goal to learn something new each month, such as choosing entry points one month, and then exit strategies the next. If you focus on building skills strategically, you are going to soon become a skilled Forex trader.

Start out Slow: There is a lot of benefit to playing with that demo account for an extended period of time. In fact, I would recommend doing so for a few months, or at least until your successful trades are far outweighing the flops. Once you feel confident with your strategy, then go ahead and begin trading live.

Become Emotionally Disengaged: The only difference you are going to find between demo trading and live trading is the way in which you react to it. It is one thing to lose with play money, and something entirely different when that money is yours. Learn what is driving your emotions and get a handle on that before it destroys your Forex account. For most new traders, it is as simple as trading more than they can afford to lose. Learn how to measure your risk to reward and manage your Forex money and you will no longer have problems with emotional trading episodes.

A surgeon doesn’t use a scalpel on his first day of med school, and you shouldn’t be jumping right into the market just because it seems like a good investment opportunity. Above all else, take your time to set up for success, and Forex trading will be much more lucrative for you in the long run.

Casey Stubbs is the founder of WinnersEdgeTrading.com which is one of the most widely read forex sites on the web. Winners Edge Trading has trained thousands of people to trade the Forex markets.

Risk Statement: Trading Foreign Exchange on margin carries a high level of risk and may not be suitable for all investors. The possibility exists that you could lose more than your initial deposit. The high degree of leverage can work against you as well as for you.