Earlier I mentioned that currency trading is simple. That’s true. But you can make it as complex as you want it to be. What I’m saying is, do you want to learn everything there is to know about the Forex markets, or do you just want to make some money?
If the latter is the case then you’re in for a surprise. I’ve said before I honestly don’t know that much about the markets myself, so that makes my job simple.
I just have to teach you how to make money!
However, if you insist, I can tell you the best book on the market to learn all about this business is “Day Trading The Currency Market,” by Kathy Lien. You can get it at
www.amazon.com for under fifty bucks.
Now, let me start by explaining how all this works. We are basically buying and selling a line on a chart, just like we would buy and sell a house. It’s no different.
We’re hoping our line will give us a profit, the same way we’re hoping our house will increase in value. The only difference is the time frame. A few minutes with Forex – a few years with a home.
We begin with a small position until we’ve made some money. If the trade starts to fail we dump it with a small loss – something more difficult to do if we’re buying and selling houses.
If our trade is successful we stick with it. We may even add to it. But basically we just want to make a series of small profits until we reach five percent for the day.
We’ve seen earlier how we can make a profit just by buying or selling the “Latitude Lines.” It’s somewhat easy to do if we have everything set up properly and wait for the market to come to us. But this means watching our screen almost minute-by-minute for that moment to arrive. I have a better way of doing it.
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But first, I want to show you exactly how to open an account, fund the account, and set up your screen. I didn’t go into that much detail in the first part of this manual, so that’s what I’m going to show you now. If you are using another dealer, that’s okay too. First, go to http://www.fxtrade.oanda.com There are a number of links at the top where you can click and get a pretty good idea of what they offer. I personally like the very low spreads they support – about the lowest in the industry.
To get an idea of the different spreads offered by OandA and their competitors go to the site here: www.fxtrade.oanda.com/spreads/comparing_broker_spreads.shtml
Understanding spreads is important because the spread represents the up-front cost of trading. Unlike stocks, there are no commissions in the Forex market. Forex market makers, like OandA, generate most of their revenue from these spreads.
Now go back to http://www.fxtrade.oanda.com and at the top, left side, click on “Forex Trading” and select either the FXTrade (real account), or FXGame, practice account. The choice, of course, is up to you. But, since you’ve come this far and are probably serious about making money, I would suggest opening an actual account. Why? I can tell you from experience you’re going to learn faster with a real account simply because you’re going to pay more attention to a real account! Plus, if you’re successful with a demo account you’ll end up getting the real thing anyway.
Don’t forget, you can start with as little as you wish! OandA even says $1 but I would give yourself a little more wiggle room. Perhaps $100 to $500 dollars. As I said earlier, “Your training starts with your first deposit.”
Finally, check out all the links to interest payments of which OandA is the leader of its competitors: http://fxtrade.oanda.com/fxtrade/interest_payment.shtml
Okay, let’s open an account: http://fxtrade.oanda.com/fxtrade/open_account.shtml
One thing I want to emphasize again. OandA does not participate in kickbacks to
affiliates as many do. I want you to be successful, and that’s why I recommend them.
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Everything is self-explanatory. Just follow the steps, 1-2-3. One question they will ask is what leverage (margin) you want to use. We’ll go into that later in detail but for now simply use the default setting of 20:1.
They will also ask you to verify your ID. I presume this is to discourage money
laundering, but in any case it’s no big thing. Download the “id_confirmation.pdf” form and follow the instructions.
Lastly, you should also review and print out the “Platform User Guide” (.pdf) by going to Help=> Support=> Platform User Guide.
Now, let’s stop here and watch a video on selecting our latitude lines.