A simple guide to trading forex in the UK

forex

Trading in the UK, you will need a minimum of E500 available to open your account. 

Before doing this, it is helpful to consider how much money you would like to use for trading and whether you have enough. 

This sum of money should be represented as your initial deposit – also known as an ‘account margin’ or ‘minimum deposit’.

Open a demo account

The next step is to open a demo account with a forex broker before depositing any funds. 

It is always advised to learn how the markets work and become fully aware of what potential risks are involved before putting any real money on the line.

Deposit money

After you open a demo account with a broker, go ahead and deposit money to fund your trading account. 

All of the best Forex brokers have an easy-to-use online funding system with various payment options available, allowing you to pick the most convenient one for you. 

These include credit/debit cards, bank transfer or eWallet services such as PayPal.

Start trading

Once you’ve funded money into your account, you can start trading on the markets. 

Although it’s possible to place orders manually using a trading chart (like the ones included below), most traders prefer using automated software that allows them to automate their trades based on predefined settings they input beforehand.

There are currently several top forex robots available on the market that allow traders to make use of automatic trade systems. Each one has unique features and characteristics, with some being more suited to beginners than others. We suggest reading up on the various robot products available before making your choice.

With any new venture, you will want to be sure of success. The same can be said for trading foreign currencies. 

This handy guide aims to give you all the information that you need to begin trading successfully without any hiccups along the way. 

When it comes down to this, if something sounds too good to be true, then it probably is (or at least there is likely some form of fine print). 

Tips for successful forex trading

  • Start small

Although most brokers allow traders to deposit as much money as they like to start trading, you should think about how much money you would be willing to lose before doing so. 

  • Avoid FOMO

Avoid FOMO (fear of missing out). 

Try not to place any trade that doesn’t allow you control over your invested amount – especially when using leverage or margin services offered by most brokers.

  • Don’t risk too much

Never risk more than 5%of your total trading capital on one trade.

  • Stop loss

Set a stop loss on each order so that no matter what, you minimise the potential for loss by limiting it to 5%. 

A good way of doing this is by setting a stop loss at around 1 or 2 pips below your purchase price.

  • Reading signals

Learn how to read signals and avoid false ones. 

Although most reputable services are accurate over time, be aware of the risks of using free services, which can appear too good to be true.

  • Improving strategies

Focus on improving your strategy rather than trying to copy someone else’s – whilst it may seem like a prominent piece of advice, many traders fall into the trap of following others without developing their system first. 

  • Reading charts

Learn how to read charts and invest time in developing your knowledge of markets and economic times so that you can identify potential trends before they happen.

In conclusion

This final tip might seem like a no brainer, but we feel it’s worth stressing. 

When trading any market – stocks, shares or forex – there is always the risk that you may lose your money. 

Although many brokers offer various insurance and protection for their clients, you should never trust a broker entirely with your money: test them out first by depositing a small amount until you are confident in their credibility. 

Do not rush into anything—investing money should be taken seriously at all times.

For more information, read this article.

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