Trading used to be known as barter, where you exchange goods with other goods that have approximately the same value. The same concept is actually also applied in trading activities. Trading itself is the process of trading activities (buying and selling) of financial products depending on where the trading activity market takes place. Before you enter the trading industry and make transactions, it's a good idea to know the steps on how to start trading properly and correctly.

Of course, understanding how to start trading will be very beneficial for you because it will minimize the risk of loss that you experience. There are at least 7 steps that you can take in starting trading. This article on how to start trading is here to help you so that you don't get caught up in misleading answers that appear in the midst of your ignorance.

So Here's How to Play Forex Trading to be Successful

Know the Types of Trading Before You Start

Trading is a trading activity that now also has many types. The first type of trading is stock trading. In this stock market, there are various access offers from various state-owned and private companies so that you can invest there by buying "ownership rights" in a certain percentage.

This stock trading will allow you as the owner of a certain percentage of shares that also get profit. The profit obtained depends on the size of the ownership ratio and the net profit of the producer or its dividends. The trading process can then be done again by reselling the shares when the price increases. Profit is also obtained from the difference between the selling price and the initial purchase price of the shares.

In addition to trading in the stock market, you can also trade in the foreign exchange (forex) market. This trading allows you to buy and sell foreign exchange based on the current exchange rate at certain times. In the past, forex trading had limited purchasing access. However, along with the development of the internet and digitalization, the forex market has become more open to individual trading with low capital.

Get Started with a Demo Account

After you understand the basic system and concepts, what you need to do then is really understand it by using a demo account first. Take the time to practice trading in real market conditions, in this case the forex market.

Another advantage besides being able to practice as if you were trading in the real forex market, you also don't need to spend any money first with this demo account. So, you can explore trading habits and activities while practicing without being burdened with the risk of loss.

At the same time, you can also test the system you want to apply when trading forex. Trading is a high-risk activity, so take your time to practice and carefully observe the effectiveness of the trading system you are trying. Simply register with a forex broker that provides a demo account feature.

Use MetaTrader

Considering your status as a beginner in terms of fluency in trading, you should equip your trading skills with features that can help you while practicing with a demo account. One of them is by installing a trading platform, MetaTrader. Usually, forex brokers already provide MetaTrader for traders to use.

This software has several features that can help you analyze trading activities, as well as the market. As a recommendation, you should use MetaTrader 5 software with the latest features and indicators. There is one forex trading application that already uses MetaTrader 5, namely GICTrade.

Get to Know Strategic Trading Times

The forex market is active 24 hours a day, 5 days a week. This means you can take more flexible time to do forex trading in addition to other daily routines that cannot be missed. The only thing to note in order to have an ideal and strategic time for trading is the division of time sessions.

Forex trading time especially, divided into several sessions, such as the New York session (America), the London session (Europe), the Tokyo session (Asia), and the Sydney session (Australia). There are three best ways to choose the most appropriate time. The first is in a way that can be called aggressive, namely by entering the overlap trading session between Europe and America which has a high level of volatility and liquidity. That way, you can get profit faster.

Second, if you want a more conservative way, it is suitable for those of you who prefer to play it safe. You simply choose to enter the Asian session which has much lower volatility and liquidity. If you have a lot of time to trade, this second way feels the most ideal to do.

The last way can be done by adjusting the trading opportunity itself, meaning you can enter any session by following the latest price movements. An example of this is if there is an opportunity in the EUR/USD combination with fundamental indicators indicating the European session, then you can enter that session. This method is usually done by full-time traders who actively trade every day. You just have to choose the method that best suits your conditions.

Understand the Use of Indicators

Another thing that is no less important is understanding the use of indicators when trading. There are two indicators that you need to understand fluently, namely technical indicators and fundamental indicators. Technical indicators, for example, are important instruments that help calculate prices, volumes, and market interest in trading. This makes technical indicators useful for mapping current market conditions and predicting the direction of price movements.

The next indicator is a fundamental indicator. Just as important as technical indicators, this fundamental analysis helps you analyze price movements with economic data, including news that is the axis of market players. If technical indicators whose analysis is more about monitoring graphs and candlestick patterns, this fundamental indicator observes information on economic conditions, such as unemployment, inflation, and the country's economic prospects in a macro way.

That is why fundamental indicators tend to be more difficult to identify because of their nature which borders thinly between objective and subjective. There are many factors to consider, including the sensitivity and high observation skills that you must have when conducting analysis.

Get to Know Candlestick Analysis

As mentioned above, it is important to understand technical indicators which means you also have to understand and learn how to analyze candlesticks properly and efficiently. Not a few beginners in trading also experience confusion when learning candlesticks. This candle-like graph is used to read price movements in the forex market.

The body of the candlestick chart consists of a rectangular center section also called the body. Then, the other part is a thin line that stretches across the top and bottom of the body called the shadow. A red body indicates bearish, while a green body indicates bullish. The clarity of the information from this candlestick makes it an important instrument for analyzing the market.

Learn About Risk Management

This trading activity has very high profits, but has equally high risks. Therefore, you must have prepared good risk management to deal with possible rush scenarios that could occur before starting trading activities.

The application of risk management that you can do is to determine the most appropriate risk percentage limit for each transaction. This tolerance limit also varies, depending on traders like you. It can start from 2% -5%. Keep in mind that the greater the risk tolerance you set, the greater the profit percentage you will need to position yourself to breakeven or the original condition. It is no wonder that some professional traders recommend not to make the risk tolerance more than 2%.

Finally, the right way to start trading is to start by recognizing and following market trends. Because trading is an activity that requires patience and precision, you can monitor and identify trends using the two indicators above, namely technical and fundamental analysis. Happy learning and starting trading!

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