Author:Vishal Doshi

How To Start Your Online Trading Portfolio ?

Find suitable Brokerage :

1) Search for a broker who has worked for 10 or more years.
2) Verify your broker’s regulation under an oversight body
3) United Nations :National Futures Association (NFA) and Commodity Futures Trading Commission (CFTC).
4) United Kingdom :Financial Conduct Authority (FCA).
5) Switzerland :Swiss Federal Banking Commission (SFBC).
6) Check the range of products you selected broker covers to know his market value.
7) If you find the broker’s website unprofessional, don’t wait to step aside. Focus on brokers with a good reputation.

Choose between opening a personal account or a managed account :

  • A personal account is for the trader himself.
  • A managed account is for your broker.

Fill up the form :

  • Download a PDF file or ask for mail.
  • The amount you are transferring from your personal bank account into your brokerage account is your fees that will cut down on profits.

Your account is activated :

In the fourth step, your broker will send you a link in email, connect to that link to activate your account and get started.

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Learn to start trading in Forex Market

Do proper Analysis :

Fundamental Analysis :

This analysis is about reviewing country’s economic reports and then making trade decisions.

Technical Analysis :

  • You can analyze by comparing currency prices in graphical presentation.
  • In technical analysis predictions of price, change is due to past events of the market.

Sentimental Analysis :

  • Sentimental Analysis simply means to observe rise or fall in the market prices of currencies.
  • Your personal instincts play a vital role.

Decide your Investment limit :

  • You can earn more by investing less money.
  • Invest only 2% share of your cash in one specific currency pair.

Types of Orders :

Market Order :

Order given to a broker to buy or sell at the existing market price is known as Market Price.

Limit Order :

When you innate your broker to buy or sell a currency at a particular rate is called a Limit Order.

Stop Order :

When you decide to purchase the currency above the current market rate to increase your profits earned or when you decide to sell the currency below the prevailing market rate to reduce your losses incurred, it is called a Stop Order.

Keep an eye on your Loss and Gain :

  • You should not get emotionally trapped.
  • Trust your knowledge.
  • You should keep yourself updated with the market fluctuations and make decisions accordingly.

Capital requirement in Forex Trading Market :

Forex trading market has a strategy that higher the amount of capital in your account, greater will be your profitability.
  • An intraday trader should have a capital of $2500 initially.
  • If you are a scalper, you should have a minimum capital of $10000.
  • A long-term trader should have a minimum capital of $20000.
  • Day traders should restrict their investment to only 1% of their single trade.
  • For example, if your trading in Forex, per day, is $50000, then you should only risk for $500.
  • You can trade with lesser capital, but with a greater risk.
  • Traders try to cover their incurred losses by taking the risk of investing their capital.
  • Hence, the newcomers, learners or beginners start trading with minimal capital.
  • Traders are having more balance in their accounts, gain more due to a higher ratio of trading, and popularly known as Effective Leverage, in the trading account.
  • Small traders with almost no experience, they reveal their account to effective leverage. As a result, their losses increase because of higher leverage.
  • Eventually, you start keeping false hopes of earning profits shortly and keep on investing your capital in relatively higher effective leverage and are trapped in the circle of danger.
  • Your strategies will fail if you fail in making correct decisions of your capital investments by effective leverage.
  • You should trade with an effective leverage of 10 to 1.
  • Keep stop loss on all trades and effective leverage stable.
  • You can invest with a lower effective leverage of 5 to 1 or even 3 to 1.
  • The accurate leverage amount is determined completely by an individual trader himself.
  • You have to take the risk of the value multiplied by the position size and the difference in prices between stop loss order and your entry price.

Capital required=(Lot Volume*Lot Size)/Leverage

Lot Size :

Only Lot amounts were used in Forex earlier. A lot is a standard size of 100000 units. Now there are nano- 100 units, micro- 1000units and mini- 10000 units; of the lot, sizes existing in the market.

Lot Volume :

Some transactions between a buyer and a seller per day are a Lot Volume. It is an important tool in technical analysis to measure the worth of a market move. The strength of a price movement depends on the volume for that time. The price movement of the market and the volume are directly proportional to each other. In Forex trading market higher the volume, more important is the price movement.

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Who provides the best trade in Forex?

  • The cost paid by the trader to his broker to trade in the Forex market is called spread.
  • Spread is the deviation between the selling price and the buying price of the currency.
  • Each Forex transaction will lose by the spread amount, during the trade. Spread amount is added in the losing trade and added in the winning trade.
  • Every trader expects minimum spread possible for his Forex broker.
  • Tighter the spreads lower will be the trader’s losses.
  • Tighter spreads are critical for traders who open and close in many positions per trading session.
  • Sometimes low spreads demand high deposits in your account, which proves unfavorable for the trader.
  • More low spreads are available in mini and micro sized accounts.

Following are few of many brokers who provide zero spreads in Forex from all over the world

Name of Broker Broker Ratings Commission Maximum Leverage Minimum Position Size Minimum Account Size
alpari - - 1:1000 - $1
InstaForex 7.8 $30 1:1000 0.0001 $1
Interactive Brokers - - 1:40 - $0
e-Global - - 1:500 - $20
PFD - $10 1:500 0.01 $1
ForexMart 6.4 $20 1:1000 0.01 $1
TickMill 8.1 $2 1:500 0.01 $25
IronForex 4.2 $18 1:500 0.01 0.01 $500
FxGiants $18 1:500 1:500 0.01 $500 - $250 1:3 0.01 $10
FBS - $20 1:2000 0.01 $500
GBE Brokers(ex-Sensus Capital) 4.6 $3 1:500 0.01 $1000
Key to Markets - $3.50 1:100 0.1 $10000
Think Markets(ex-Think Forex) - $0 1:400 3.3 $2000

Top 6 Forex brokers for trading in India

Name of Broker Minimum Deposit Maximum Leverage
LMFX $50 1000:1
XM $5 888:1
NetoTrade $250 400:1
eToro $50 400:1
Plus500 $100 294:1
MARKETS.COM $100 200:1

How do Bankers trade?

  • In every trade of Forex market winner’s winnings are the loser’s losses.
  • Banks manipulate almost 80% of the Forex benchmarks and not follow the civil agreement, and so they are fined.
  • The mainstream media do not cover this manipulation.
  • Currency prices are either moved to the stop loss level or buy stop level or sell stop level.
  • Bankers foregather positions over time, appearing as a range bound market

Stepwise guidance for trading like bankers:

Look for a hasty move first :

  • The important currency has started its move in the first step.
  • You have to wait here for a retreat
  • Place stops when a first high swing in the price occurs
  • Here the original rate returns.
  • Sometimes the rates even go above the swing high.
  • Traders presume a rise in price rates at this stage, and therefore many stop orders are waiting.
  • After the high swing, banks target to stop orders, and suddenly price rates start falling.

A candle closes before the downtrend starts :

  • In the second step, describes three different stages of stop loss.
  • The candle fastens below the previous low, and because of this change, we predict price rates to continue to fall.
  • You should place a stop before the high of this candle and wait for the market to trend downwards.
  • Banks observe these stop orders and throw prices even more downwards. Such swings occur every time in the Forex market.
  • These observations could vary person to person, trader to trader.

Lower low or Higher high principle:

  • In this step, market conditions are about to revert.
  • You should place sell top orders, as prices may fall.
  • This phenomenon is observed repeating itself.
  • Such stops occur more than one time in the market.
  • Pips also occur at this stage.
  • The pair keeps trending downwards, after hitting the stop orders.

Price falls and rises back quickly :

  • Variations are observed because of the breaking of trend lines.
  • You should place stops above the high of this candle when prices close below the line of the trend.
  • After this trend line, prices fall a bit and tend to rise at an alarming rate and achieve the stop orders
  • As many positions get block as profit, you don’t want prices to fall too far after the breakout at the opening level.

Trend Lind breaks in this stage :

  • In this step, price rates continue to rise, and many times they are observed to bouncing, because of the new blockage.
  • The price rates break down and then boost upwards.
  • It is a clear manipulation.
  • At this level, buyers buy stop orders, and sellers place their stops with the expectation of price rise.
  • But, here the currency pair loses its value continuously.

Before a fall, price bounces up and then breaks down :

  • In the final step, again the price rates bounce a little and then tend to fall.
  • You should consider this little rise in price as stop loss placement.
  • Do not wait much for this level to change.
  • At this stage, you can understand stops, and currency pair continues their courses.

How to earn sustainable profits when you are an amateur Forex trader?

An amateur trader can easily become professional trader by following principles of trading and by changing his method of trading and developing a trading are few steps which would help you as an amateur Forex trader to become professional:

You should try to Focus :

  • You should concentrate only on one thing at a time.
  • 100% focus only on trading indicators and charts.
  • A clear watch on the time frame.
  • Don’t lose your focus even when the market is slow.
  • Keep yourself updated with market news.
  • If you get exhausted playing with numbers all day long, it will make a better decision to get relaxed.
  • If there are no more trading setups, involve yourself in developing your trading skills.

You should have a well-framed strategy :

  • You should not waste your time, only in collecting information.
  • You should go through changes in prices of trade you are planning to invest.
  • You need to keep patience for values to come according to your convenience.
  • Revise your mistakes and past performances to make better decisions in future.

You should not get overconfident :

  • You must not get too confident on winning a big deal or winning your few trades.
  • You need to understand that time after time winning and losing are a part of the trade.
  • You must stick to your strategic planning.
  • Don’t start taking unnecessary risks.
  • You need to learn to manage your trade well.
  • You should never violate trading rules, just because you won a few times, over and over again.

You should not lose hope :

  • You should not lose confidence in your trading strategies, even when suffering losses.
  • It should not matter you with the winning or losing streaks of the market.
  • Winning and losing in the Forex trading market are unavoidable.
  • You have to get used to gains and losses occurring any time in the market.
  • You must trust your knowledge-based strategies.
  • You should keep following your trading rules.

You should not get affected by negative results of single trade :

  • You should accept a rule that Stop Loss is a price rate, where you want to exit the market, thinking that your plan was completely wrong.
  • You have to learn that results of one trade will not decide your career in trading.
  • You should not take losses personally.
  • If you take the decision of delaying your stop loss or get added to the losing position to come out of losses faster or don’t take a stop loss at all, then you are wrong, and you will only incur a loss.

Don’t try to earn gains fast :

  • You need to understand that trading in Forex market is both, earning profits as well as incurring a loss.
  • There is no rocket science of only earning money.
  • You need to keep enough patience.
  • You have to trust your trading strategies.
  • You must keep following your trading rules.
  • You have to keep an eye constantly on price movements and do hard work.
  • You have to go through a lot of hustles before making money.
  • To be earning sustainable profits, you have to learn to reduce your losing trades rather than concentrating only on your winning trades.
  • Reducing your losing trades will cover the pace of your winning trades.
  • Losing in Forex market is unavoidable, so to be a successful trader, you must learn to minimize the amount of your loss.
  • You should always trade with a stop loss and only when you are ready to take the risk of losing the amount.
  • You need to learn to make potential and flexible trading strategies, especially when there are chances of high probation in the market.
  • Do not make hasty decisions or atomize your trading process.
  • You have to learn to decide, whether to take short-term, mid-term or long-term investments.
  • Short-term can be a few seconds or minutes.
  • Long-term can be a few days, weeks, or months.
  • Many times you need to decide your opening and closing positions in milliseconds.
  • You have to learn to understand the trading signals properly.
  • You have to learn the difference between types of trades, existing in the Forex market. For example, range trade, carrying trade, Counter-trend trade, swing trade, etc.
  • You must use a Forex trading journal.
  • Do not get emotional in making important trading decisions.
  • Learn to lock profits as and when available.
  • You can also hire a different person as you guide who will help boost our earnings, with his experience in the Forex market, over the years.
  • As an amateur learn to trade through pretend money, rather than risking your real money.