The foreign exchange market can be a tricky beast. You know what would greatly increase your chances of success? By looking at your first steps in trading as you would your first steps into any business venture.

Research is vital

This goes for pretty much every type of pursuit when it comes to investment and trading, I’ll admit. But people forget just how important it is to get really stuck into your research when it comes to foreign exchange. There are an alarming amount of people who will make all their bets based on a cursory glance of an exchange rate website.

In business, following endeavors based purely on a few numbers is fast route to failure. You need to be making much more nuanced decisions than, say, starting a business making sneakers just because sneakers sell well. You need to know the who, why, and where. You need to keep up to date with currency news, and to research the good and bad decisions that have come before.

Always have a plan

You must have heard of the business plan. When someone decides to start a business, they come up with a solid plan that they’ll stick to as much as then can throughout the pursuit. It helps them figure out how much they need to spend. How much time a particular endeavour will cost. How the actions of others may affect the business. What the goals and requirements are.

You need something similar in foreign exchange endeavors. Come up with a thorough trading plan. Start putting it into practice by, well, practicing with foreign exchange simulations!

Good software can help you

What business these days doesn’t use some form of software? A lot of modern businesses are office-based, with rows of people facing computers and typing and clicking away. Even people in farming are often using some kind of helpful software on their phone to help predict weather or crop yields. Good software can go a long way in business.

As with business, so with foreign exchange. When you exchange currency, you’re doing it via some kind of ‘third party’. You’re doing it through a broker, a payment system, or local software. You can look into a virtual forex broker if you want a comprehensive way to trade effectively.

You need strong startup capital

One of the perennial pieces of advice when it comes to trading is to start small. And hey, I don’t want to tell you that you should start getting reckless with your funds. And a lot of the advertisements that want to lure people into forex indeed imply that all it takes is a little. INVEST JUST A FEW DOLLARS FOR MASSIVE PROFIT!, that kind of thing.

But the fact is that a tiny amount of capital is rarely going to see you succeed. Just like in any business, you need a strong amount of starting capital to get on the right foot. Starting in foreign exchange on a shoestring budget has worked for very, very few people. A decent starting amount is often around $1000 - and that’s considered a small amount in this field.