Forex trading, also known as foreign exchange trading, is the process of buying and selling currencies to make a profit. It is one of the largest and most liquid financial markets in the world, with an estimated daily trading volume of over $5 trillion.
Trading forex live in 2016 requires a good understanding of the market and the trading tools available. Here’s a guide on how to trade forex live in 2016.
1. Understand the Market
The forex market is influenced by many factors, including economic, political, and social factors. It is important to understand these factors and how they affect the market.
Economic factors such as inflation, interest rates, and GDP growth can impact a country’s currency value. Political factors such as elections, government policies, and international relations can also affect currency values.
Social factors such as disasters, protests, and other events can also have an impact on the market. Traders need to stay up-to-date with the latest news and events to make informed trading decisions.
2. Choose a Forex Broker
A forex broker is a company that provides access to the forex market. Traders need to choose a reliable and reputable forex broker to ensure their trades are executed efficiently and securely.
When choosing a forex broker, traders should consider factors such as regulation, trading platforms, fees, and customer support. It is important to do thorough research and compare different brokers before making a decision.
3. Learn the Trading Platform
Forex trading is done through a trading platform, which is a software application provided by the forex broker. Traders need to learn how to use the trading platform to execute trades, manage positions, and analyze the market.
Most trading platforms have a range of tools and features, including charts, technical indicators, and news feeds. Traders should take the time to learn these tools and how to use them effectively.
4. Develop a Trading Strategy
A trading strategy is a set of rules and guidelines that traders use to make trading decisions. A good trading strategy should be based on sound analysis and risk management principles.
Traders can use a range of analysis tools to develop a trading strategy, including technical analysis, fundamental analysis, and sentiment analysis. It is important to test the trading strategy on a demo account before using it in live trading.
5. Manage Risk
Risk management is an essential part of forex trading. Traders need to manage their risk to ensure they don’t lose more than they can afford to.
One way to manage risk is to use stop-loss orders, which are orders that automatically close a position when a certain price is reached. Traders should also use proper position sizing and not risk more than 1-2% of their account on any single trade.
6. Monitor Trades
Once a trade is executed, it is important to monitor it closely. Traders should use the trading platform to keep track of their positions, set profit targets, and adjust stop-loss orders if necessary.
Traders should also keep an eye on the market and be prepared to exit a trade if market conditions change. It is important to stay disciplined and not let emotions cloud judgment.
Conclusion
Forex trading can be a lucrative and exciting activity, but it requires skill, discipline, and patience. Traders need to understand the market, choose a reliable broker, learn the trading platform, develop a trading strategy, manage risk, and monitor trades to be successful in live trading. With these tips, traders can improve their chances of success and profit from the forex market in 2016.
