Thanks to the newbie for this helpful, relatively easy question. The answer is in parts:
1) At all costs avoid exchange-traded products, where cold-blooded volatility puts your position at risk. Forex futures on the Chicago Mercantile Exchange are an example. CME forex futures are priced according to market forces and, if at any point there are more sellers than buyers for the currency future youâve bought, youâll lose big time. No mercy.
2) Scrap together all you have and all you can borrow and open an account with a spot forex dealer. There are dozens to choose form. At the one you choose, the dealing desk personnel will set the prices, in contrast to exchange-traded products. The dealer is there to help, offering a fascinating trading platform free of charge, with juicy extras like charts, streaming news, and commentary. The dealer is giving you access to international finance, and at a pittance of what the big players pony up to participate.
3) Quit your job.
4) Use the extra time you now have to read all the most active posters on boards devoted to forex. Some of those boards, like Moneytec, have an unusually high percentage of posters who make money trading forex. Those traders have developed systems, particularly systems grounded in technical analysis, that consistently deliver profits. Follow those systems in your trading. They can do it, so you can, too.
5) Closely follow each new post of successful âsystemsâ traders. Eventually, the poster will let slip the name of the spot forex dealer he trades with. Thatâs the dealer you want to go with (see item #2 above). Itâs easy to start because that same dealer usually sponsors the board youâre reading. Just click on the dealerâs ad and youâre set.
