The Broker Dilemma
There are hundreds of Forex brokers out there, all wanting your account open with them. Unlike most, I'm going to pitch it like this "Don't trust any of them". They are all out to make money out of your money. That's their job. It's how they get paid.
If you start from that perspective then searching for a Broker becomes an exercise in finding what I call "The Least Worst Option". A concept I find I'm having to use far too often in life these days. Many other sites give good advice on Market Makers, ECN, NDD, STP and all the different types. If you don't know what those are yet, you're not informed enough to choose yet. If they guy ringing you up trying to convince you to open an account today because you opened a demo account doesn't know what they are? .... Draw your own conclusions.
In all of those fields there are "Least Worst Options". I'm not about to recommend any or snipe at any. That's not what I'm getting at here. Many people do seem to trade happily with all the types of brokers out there. Sadly ... some really are plain nasty fraudulent or run on such a shoestring that complaints seem sky high.
Complaints? Uhm. Welcome to Forex review sites. Muddy world. You''ll find novices who lost money and want to blame someone. (Pause for a second. You might be one of those in a few months. You sure you want to do this?) Sometimes these people will post the same tale with a "Don't touch them" review across many sites. So that's your first problem, spotting the unlucky with a grudge from those who really were taken for a ride.
Your next problem with Forex review sites is Forex brokers. It seems a few have enough spare time to not only create entire bogus websites that look like blogs praising themselves in a review format, they'll also put down the opposition with bad reviews and ratings on as many sites as they can. I've seen one review site with three "different" reviewers all exposed as being from the same IP address linked to a competing broker, and that's on a site that bothers to check IP addresses. Most don't.
By this point? You'll be figuring out that ... Forex broker review sites really aren't that useful. Well spotted. Use them anyway, some have good advice and the odd post from genuine users. Glean what you can to help make your choice, but don't ever take a single review site or a single persons opinion as the truth.
Sadly, your best option is to narrow it down to a few by research and reading pages and pages of mixed dross and information. Then you open a few demo accounts right?
You do have the option of giving a false (oops! did I type that wrong?) phone number here. In some cases I'd recommend it. Some brokers can be very pushy on sales once they have your number. One or two can be perfectly reasonable about it.
Take your time, get a feel for what's on offer at your own speed, keep doing the research, don't let them pressure you in to anything.
That's about all the wisdom I have on the hideous task of broker selection.
Doing the dirty...
A minimal view on tactics for you aimed purely at risk. Yup. Go elsewhere to learn what all the pretty lines on the charts mean. This is ultra basic stuff and my own personal risk management at work.
First. Understand it's gambling pure and simple. Yes you can win overall, but that's about strategy and tactics. The worst thing you can do is be a bad gambler. Accept there is an urge to "Just make another trade", especially if you just lost one. Accept you might just be sitting there with this burning itch to just place a trade to see what happens. It's gambling. If you're not good at controlling yourself in a gambling environment? Walk away. No really. Do. This won't be a kind environment for you.
I'm a cautious type. Hopefully. So I'll pass on this much:
Get your head around what you are actually doing with the leverage, pips, stop losses, trailing stops and take profits. Some platforms are very good at helping you see exactly what you are doing to your margin. Others will need a handy calculator and some quick checks to see what you're about to get yourself in to by opening the next trade.
Put it this way. After you've placed a trade with a set take profit and your set stop loss, possibly with a trailing stop. You should be able to walk away from the screen without panic. Even if it shoots the wrong way 60 seconds later and hits the stop while you're just making a cup of tea. The worst you should feel when you get back is something like "Oh ... maybe I need to rethink that trailing stop plan", instead of "H*ly Sh*t that's wiped out most my margin! Where's my credit card?"
If your broker will let you (far as I know pretty much all will), keep the demo account and keep using it. Test your new insights on the demo first, ok so you didn't win, but it looks like it worked. Or better yet. Hell that was stupid! Glad that wasn't on the live account! And it's also the best place to figure out your stop & trailing stop positions for different types of market days. It varies over time and some days are just bitches. Get used to it. Better yet, get used to spotting a bitchy day.
Aim for more small wins than small losses and aim to get better at making more wins than losses over time. Apart from figuring how many pips to win or loose on each trade, the single biggest factor in that is how much margin you stake. It's important to know what your position means when you place it in terms of what you can win or loose bottom line and not be in some fuzzy "Well I didn't want to get stopped out so I set it to X pips to be sure, and actually, that's done a fair bit of damage". There's almost no point setting the stop if you can't take the loss.
Log stuff and teach yourself. Yes you have in effect sent yourself back to high school. Brokers vary in the support they will give you trading, use what they offer, but in the end it seems the best teacher is yourself. My weapon of choice is a stupidly large spreadsheet with all kinds of notes on it. Export reports, note them up and go back over them. How often was the problem a news event you didn't see coming? How often is it a stop you missed by a fraction? Could you have stretched that take profit further and why? Would you have been better off just using a fixed stop? Which indicators were you using? Was it your trend line that was out? Do you need to look at an additional way of marking up the chart? The questions are endless. Keep questioning both the wins and the losses. Over time you begin to get a feel for your own style and shortcomings, what to look out for.
It's basic stuff I know and I intended it to be. But it's not stuff I've seen laid out quite like this elsewhere. Hope it helped .. or even dissuaded the right people from tinkering with the world of Forex. In the words of Portishead - "You don't get something for nothing"
Edit: A find the day after I posted this. A rather good guide for noobs can be found here @ BabyPips