While its average daily trading volumes may have fluctuated over the course of the last few years, an estimated $5.3 trillion is still transacted through the forex market during every 24-hour period.
If this highlights the popularity of the marketplace, however it does little to underline its volatile and challenging nature. These elements are inescapable, while they also highlight the need for individuals to proceed with caution when trading currency for the first time.
In this respect, online trading platforms have become the lifeblood of the market in recent times, as they have removed many of its barriers to entry and create an accessible sector that can generate huge returns for investors.
3 Ways in Which You Can Effectively Use Online Trading Platforms as a Forex Trader
This is so long that you are able to use them effectively, however, so here are three tips to help you get the most from online trading platforms such as LCG:
1. Use the Demo Account Feature
If you are new to the market or simply using an unfamiliar platform, it is imperative that you consider utilising the demo account feature. This is a token feature of all reputable platforms, and one that enables you to test your carefully cultivated strategies in a simulated, but real-time, market environment.
So, while every single aspect of the market will be simulated accurately, you will be able to implement trades without using your hard-earned money.
You can operate from such an account for between three to six months, but you should ensure that you are comfortable with and confident in your strategy before trading for real.
2. Tailor the Interface to Suit Your Needs
Most online trading platforms offer access to an ever-expanding range of live and historical analytical tools, but the likeliness is that you will not need all of these to implement your strategy and execute trades.
Fortunately, you can tailor your platform’s interface to list your most prominently used tools, while also selecting your preferences to determine how charts, graphs and data sets are presented. This enables you to process information quicker, and this can make a world of difference in a volatile and fast-paced market such as the foreign exchange.
This may require some experimentation, but do not be afraid to play around with your interface to optimise your trading efforts.
3. Use Your Platform to Diversify
Even if you are drawn to the markets by the lure of currency and the liquidity of the forex market, the most successful investors learn to diversify their portfolio over time.
This is also a key advantage of online trading platforms, as these entities usually offer access to a huge number of markets and asset classes across the board. It therefore makes sense to leverage this natural and competitive advantage, by gradually expanding your knowledge base and embracing new assets to create a more balanced portfolio.
If you fail to do this, you may undermine your chances of achieving success as a financial market trader and ultimately miss out on one of the core benefits of using virtual trading platforms.