Online trading has continuously grown in popularity along with the development of technology and strategies that will give traders the skills needed to navigate the financial industry.

Numerous brokerage firms have emerged over the years, stemming from the need for better guidance in the navigation of the volatile financial markets, FSMSmart being one of them.

But do you really have the right amount of knowledge in order for you to be an effective trader? Don’t take a risk that you can avoid, and learn more by reading this article.

Different Ways to Trade

Trading does not force you to stay on a single market for the rest of time. You can take part of the different markets available in the financial industry. There are numerous markets that you can choose from including the stock market, foreign exchange market, and the commodity market.

Foreign Exchange Currencies

Foreign exchange, more commonly known as forex or simply FX, is the trading of foreign currencies. The forex market has proven itself to be one of the biggest, most exciting and fast-paced markets in the whole world.

Reviews from a variety of people will tell you different things about the forex market. But you should not believe all of them as other traders tend to exaggerate their own experiences to stop people from trying. It would still be better to learn from experience.

Before the emergence of the internet, forex trading in the currency market has been largely dominated by huge financial institutions, corporations, central banks, and incredibly wealthy individuals.

But within the past years, as technology continues to develop, even average investors can buy and sell currencies. It can easily be done with a simple click of a button through online brokerage accounts offered by firms such as FSMSmart.

There are different sized lots available for currency trading. The micro lot is 1,000 units of a currency; a mini lot is made up of 10,000 units of currency, and a standard lot is 100,000 units of currency. Opening an account funded in U.S. dollars will put the price of a micro lot at $1,000, your base currency.

You should also remember that forex trading has a 24/5 market. This means that the market operates for 24 hours a day and only closes from Friday evening to Sunday evening.

Currency Pairs

One of the most important things you should consider when entering the foreign exchange market is that all currency trading are done in pairs. This market does not employ the same methods that the stock market does. You can’t just buy or sell a single currency, which is why currency pairs are used when trading in the forex market.

A currency pair is the quotation and pricing structure of the currencies you get to trade in the forex market. There is a process that the currencies undergo to help determine their value against that of another currency. The value can then be seen as rates.

When looking at a currency pair, the first listed currency is known as the base currency while the second currency is called the quote currency. You will then be able to determine how much of the quote currency you’ll need to trade in order to obtain one unit of the base currency.

Forex Market Hours

As was previously stated, the forex market is open 24 hours a day, 5 days a week. It can be accessed at any time of the day or night. It’s considered to be open 24 hours a day because the forex market operates on a global scale, meaning that there are different time zones used in the market.

You should stay updated on when the different opening and closing hours are to stay updated on the perfect time to gain profits. Brokerage firms, like FSMSmart, are able to provide traders with forex market hours charts which will give you the information about the regions’ business hours.

CFDs Trading

A contract for difference or CFD is one of the most popular forms of derivative trading. It allows you to speculate on the possible rise or fall of prices of the fast-moving global financial markets or instruments like shares, indices, commodities, currencies, and treasuries.

You can gain profits or incur losses depending on the movement of the underlying asset without actually owning the said asset. Basically, it’s a contract between the client and the broker.

Metal Trading

You can choose to trade precious metals in order to expand your portfolio. Most brokerage firms offer Spot Gold and Spot Silver in their respective firms, allowing you to trade in various platforms available on their websites.

Aside from portfolio diversification, you can also take advantage of the volatility of the market with the use of trading strategies.

Trading Strategies

There are plenty of strategies that different traders have developed over time to help them in their own trading journeys. These strategies were soon used by more traders as they prove to be effective.

Some strategies are not allowed in the majority of brokerage firms as it can potentially put you in a very difficult situation, or because they are simply illegal.

One of these strategies is scalping. These transactions mostly take place in the black market, and can potentially provide you with more damaging consequences than rewarding.

With scalping, the amount of damage you incur can be boundless. If, for example, you decide to enter the market and miss your exit, then you can end up stuck with an open position that has the potential to clean out your account.

One strategy that is encouraged on most brokerage firms is hedging. FSMSmart, among other firms, allows the use of hedging since it will give you a better chance at protecting yourself and your trades from any losses that you may incur in the future. It will not completely prevent the negative event from happening, but hedging will help lessen the damage that you incur.

There’s also the use of fundamental and technical analyses which will provide you with a better understanding of the markets through various indicators such as economic data, company performance, supply and demand, as well as mass market psychology.

Other trading strategies include day trading, which involves trades that are entered and exited before the end of the day; trend trading, considered to be one of the most common trading strategy in the market, which gives you the opportunity to gain profits by following the movement of the trend and entering the market based on the direction that the trend is taking; and position trading, which is a trading strategy that can last over a period of weeks, months, or years and aims to maximize profits through the major shifts in prices.

Numerous reviews are also available for each strategy, each person sharing their own experiences when using the trading strategy. You should find the right trading strategy that will suit you best before embarking on your own trading journey.

Tips to be a Successful Trader

Tip #1: Always Have a Trading Plan

A trading plan is a set of rules that will detail when you enter and exit a trade, as well as money management criteria. This will allow you to save a huge amount of time.

Technology can be of great help when it comes to testing a trading idea before you actually risk real money.

You can then first develop a plan, use technology to test whether it will actually be effective, make improvements along the way, and then employ the solid trading plan on your own account.

Tip #2: Use Technology to Your Advantage

Technology continues to evolve as time passes, you should use the development in technology to your advantage. There are now charting platforms that will give you various methods for viewing and analyzing the markets.

You can also choose to backtest an idea on historical data before you decide to risk any of your hard-earned cash. Your smartphones can now also be equipped with the ability to deliver market updates so that you can monitor your trades virtually anywhere.

Furthermore, having high-speed internet connection can prove to be a great improvement to your trading performance.

Tip #3: Always Use Stop Loss

Stop loss is a predetermined amount of risk that you’d be willing to accept in each trade. This can either be a dollar amount or percentage.

This can either be in the form of a dollar amount or percentage and limits your exposure during a trade. It’s important to remember that ignoring a stop loss is bad practice, even if it does lead to a winning trade.

Tip #4: Stay Focused

It’s important that you stay focused on your goals when trading. The results of the trade, whether good or bad, should not affect you drastically in any way.

If you end up losing a trade, you should accept it as a part of trading but strive to not let it happen again. Likewise, treat your winning trade as another step to reaching profitable trading. You should keep in mind that cumulative profits are the ones that make the difference.

Accepting that winning and losing trades are natural parts of trading, your emotions will not have too much effect on your trading performance. It’s important that you set realistic goals to be able to keep trading in perspective.

Tip #5: Protect Your Trading Capital

When you decide to fund a trading account you need to have a certain amount of money saved up. Saving up money can take a long time; it can even take longer on the second time around.

You should remember that protecting your trading capital is not the same as having no losing trades. All traders go through the loss of trades; it’s simply part of the experience. You must not take unnecessary risks in order to protect your capital.

Tip #6: Only Risk What You Can Afford to Lose

Before you decide to use real cash in trading, you must first ascertain that all the money you use to fund your account is truly expendable, otherwise, you should consider continuing to save more money first.

No matter what the possible outcome might be, you should keep in mind that losing all the money you decide to use in funding your account is still possible.

Therefore, don’t use the money you have saved up for other important things like your children’s tuition for college or the money you use to pay the mortgage. Losing money is a traumatic event, it can even be more so if it ends up being the money that you were never supposed to lose in the first place.

Tip #7: Know When to Stop

You should learn to accept it if you’ve made some wrong choices along the way which led to the decision that you need to stop trading. Two reasons that could have greatly affected this decision would be an ineffective trading plan, and an ineffective trader.

These two can go hand-in-hand or separately. You might have been able to draw up an effective trading plan but did not stick to it in the long run.

Also, having any personal problems – health, stress, or anything else that might stop you from being an effective trader – can greatly affect your trading performance negatively. In such cases, you should consider taking a break from trading to deal with it first before continuing.


You should first understand the trading process as much as you can before taking risks. There are numerous steps you can take to ensure that you will not be putting yourself in a difficult situation and can instead stay ahead of any competition.

Online brokerage firms offer you with numerous options that will allow you to have a much easier trading journey. There are educational articles, videos, and e-books that can help you get better with your trading problems. FSMSmart can provide you with all these options and more.

There are reviews available in the internet which can help you make the decision as to which market you’d like to take part in. Do your research, find out as much as you can and remember those seven tips to help make sure that you stay on top of all your trades.