Most forex
beginners tend to think that it’s all about depositing money with their
preferred broker and then starting to trade. How misconceived can that be? Forex beginners are so concerned about
making money trading forex that they are self- dispossessed of the
essentials
that should accompany their forex trading capital. Any good chef will tell you
that he or she likes having the day’s recipe all set before he can begin
preparing the delicacy. The same applies to those traders who would want to be
successful at the business of trading
forex. The forex trader’s kit is not all about having the forex capital and the show beginning.
With such an attitude the curtain might fall soon when what you have in the account
is wiped out in entirety. Making money as a trader of forex is not all about the availability of capital.
Below is a list
of the things that the forex beginner needs inorder to trade forex
successfully. Some of them are obvious stuff. But it is the obvious that
constantly escape our minds, not so? Read the list and see if you had included
all that is mentioned. And it is even mush better if you have more in your beginner’s
checklist. This shows your commitment to detail which is good for any beginner
hoping for success trading forex.
1. Laptop
or personal computer
You’ve probably been told that you can execute
your forex trades from a cyber café. Whereas that may simplify matters for the forex beginner who cannot afford a
laptop or pc, it is not a good idea. If you are using an forex broker that
requires you to download the trading station software, you will be unable to
trade in an internet cyber café. This is because the period of downloading the
trading station may be longer and time consuming. Some trading systems such as Meta-trader
4 also require to be downloaded onto your pc. The speed of internet in a cyber
café is also not guaranteed. The need for a pc or laptop is therefore essential
for any beginner intending to trade forex successfully. You need to
manage your trades and to save screen shorts of every set up that leads you
into taking a trade. That cannot be achieved by trading on a cyber café. A personal
computer is therefore essential.
2. Fast
internet
In trading
forex successfully you don’t just need an internet source. You need a
faster and uninterrupted internet connection. The dangers of a slow internet is
that the period between placing an order and when the order is filled in by
your broker might be big and will eventually cost you in slippage. Execution must
therefore be as quick as lightening. And even though we at times blame the
broker for the slow execution, occasionally it is due to the slow internet
connection on our systems. Subscribe with an internet provider that appreciates
the need for faster streaming. Also make sure that there is enough data bundle
on your machine before the trading day begins. And remember that as a forex trader you are in business and it
is therefore essential that you have a book recording all amount spent on
internet or power connection. At the end of the month your forex returns should be able to pay for all that and leave you with
a surplus. Slow internet connection has been ranked by surveys as the eighth most
annoying thing on earth. It should not become an impediment to your desire to
make money when all the factors constituting your forex trading strategy are
available.
3. Uninterrupted
Power Supply
Nothing is a guarantee so safety measures must
always be in place. Electric power might go off due to a storm or an accident
and if you were in the middle of a trade especially during moments when major
data is coming out, it may cost you a great deal. What you need is a backup
system to the possibility that you might at any moment experience a blackout. I
wouldn’t advice you to acquire a power generator just for trading. But you
should definitely get an uninterrupted power supply. Even if has a life span of
only ten minutes after the main power switch is off, it will still do. For you
only need to protect open positions or to close a pending order and wait for
the main switch to be on again. If you are using a laptop that is able to save
power then this may not be necessary.
4. An
active bank account
You need an active bank account. It is the only
way that you can fund your trading account. We have written an article on theprocess of funding a forex trading account and have noted that whether you
are using a wire transfer, debit card or credit card, a personal bank account
is a must. Remember that there is no single forex broker that will permit you
to fund a trading account with money that is directly from a third party
trading account. The bank account must be in your names and the details on your
debit card or credit card must all match with what you filled in when opening
your trading account. We also urge you to maintain a bank account with the base
currency of your trading account. If you have a dollar trading account, then
try and open a dollar bank account. It will save you a lot in terms of
excessive charges when depositing or withdrawing funds from your forex trading
account.
5. A
forex journal
Forex beginners must maintain a register of
wrongs. They must also maintain a list of all their good traders. The register
of wrongs helps refreshes your memory on the reality of losing trades. It insulates
you from the repetition of silly mistakes that have once or twice cost you a
big deal. If you have no register of the wrong trades you are bound to find
yourself in the same cycle of losing trades by doing the same bad thing as
before. Commit yourself to maintaining a small book with records of all your
trades. You can forget to record the successful trades. But you must never
forget to record all the wrong trades. Include things like why you took the
trade, the timeframe, why the trade failed to work and the set up that had
guided you into taking the trade. With time you will have mastered most of the
trading set ups and you might then choose to discard the trading journal. But as
a forex beginner, don’t fool
yourself into thinking that your mind is a great tool of memory. Record all the
trades you take.
What we have discussed here is in no way
conclusive. You still need to have an active phone line, an email address, a
utility bill and a residential address. Without these things you will not be
able to open a live trading account. The things discussed here are all
secondary to the trading strategy that you use. But there is no way you will
benefit from your trading strategy without what we have discussed here. In a
way the trading strategy and the secondary items are complementary. A forex beginner rarely knows where to
start. We hope that there was a little magnetic effect in this article that has
guided you to the right trader’s direction.
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