The forex business is now being considered as a viable and profitable type of investment. Pioneered in the late 90s, forex is increasingly popular among business people and includes people interested in investing. So, what is forex and how to play it?
Forex is an online foreign exchange exchange where profits can be made on the movement of currencies around the world. Apart from being safe to do, forex can be a consideration for those of you who wish to have more income. Before starting, understand and follow the following 6 tips for playing forex.
Choose a Trusted Broker
There are so many online forex brokers and platforms that offer lucrative benefits. You need to remember that playing forex requires real money capital and is not an activity that needs to be underestimated. Wrong in entrusting your money to fake forex brokers can have a bad impact on your finances.
For your convenience and security while trading forex, learn in advance the advantages and licenses of online brokers. How to play forex safely starts with choosing a trusted forex trading broker with a license from a credible regulator such as FCA from England and ASIC from Australia. Forex brokers in Indonesia have been protected and regulated by the Commodity Futures Trading Regulatory Agency (BAPPEBTI).
This official regulation from BAPPEBTI can protect you in trading and playing forex. Not only temporary feasibility tests for the registration process, BAPPEBTI regularly monitors the feasibility of forex brokerage facilities. If you get a forex broker that is not supervised by BAPPEBTI, its feasibility and legality are questionable.
Choose the Appropriate Account Type
After that, you need to look at the account type options offered by the broker. Each broker offers different account types, but they are categorized into three levels, namely micro, mini and standard levels. A micro account is a trading account with a small lot size (0.01 lot), only one tenth comes from the mini account and one hundredth comes from the standard account. For this account, a minimum deposit of US$500 to US$1000 is recommended.
If a micro account is suitable for beginners who want to try forex, a mini account is the next level with a larger lot size, which is 0.1 lot or one tenth of a standard account. If you are a beginner who wants to reap more profits and are ready to face the risk of greater fluctuations, prepare a deposit of at least US$2000 to US$5000.
Finally, there is the most common standard account offered by all forex brokers. It does require a larger initial capital, approximately US$10,000, but the facilities obtained include more. You can trade different types of currencies and earn more profit. The lot size comes from a standard account which is larger, namely 1 lot with a minimum size per lot of US$100,000.
It is highly recommended for beginners to try the demo version of Forex before choosing an account type. By trying the demo version of forex trading, you can find out more about how to play forex before finally investing and choosing the appropriate account type.
Understand World Market Conditions
Like most investment products, forex is also influenced by external factors, such as market and economic conditions in the world. You need to diligently read financial news to be able to estimate the right time when playing forex. If there is an economic crisis or a situation that can affect the value of forex, avoid opening positions to avoid losses.
This needs to be remembered because in uncertain circumstances, forming tricks and predicting forex trading steps can be more difficult to do. No one can know for sure what kind of choice will have an advantage. What’s more, broker platforms tend to experience server problems due to the high number of incoming orders.
If you already know the forex trading process better, then you can know market movements more closely. Every economic news can be used as a golden opportunity to play forex. However, you always need to be careful with possible losses in the future.
One of the foundations for playing safe forex is risk and financial management. It is undeniable that every forex player has a risk of loss. Nothing can escape this. Therefore, open positions with margin or capital below 20% to minimize losses that can occur.
Many beginners invest all their capital because they are tempted by great potential. Unfortunately, this is not a smart move that you should take, especially considering the high risk of a loss occurring. Don’t be