Learn to trade forex in seven steps


If you are interested in learning to trade forex successfully, the most popular path for an aspiring trader these days is to search

If you are interested in learning to trade forex successfully, the most popular path for an aspiring trader these days is to search the Internet for information to immediately apply it to a live forex trading account. The problem is that their research often leads them to destinations where there are a lot of false promises, bad and negative ideas, and an obsession with indicators. Many of the e-books on sale today are filled with recycled concepts or unfinished strategies that the authors themselves do not use. Many authors do not make money from Forex trading but do make their living by selling these e-books to a novice forex trader.

This easy access to forex experts who feed the notion that Forex trading is the Holy Grail of easy money, then feed those same people financially who sold them the idea. Ultimately, what many of these forex experts are selling is a flagrant misrepresentation of what it takes to trade foreign exchange for a living.

Forex trading is not easy. You can become a good Forex trader through dedication and by treating Forex trading as you would any other skill. The truth is that it is hard work and should be treated just as seriously as any other profession.

The effect of all of these experts is that many Forex traders begin to be overly optimistic with unrealistic goals. While there is nothing wrong with a positive mental attitude, this positivity should be built on strong foundations and realistic expectations.

New Forex traders usually start their careers by purchasing a secret set of indicators and they are quickly penalized for their gullibility. Many of these forex traders buy a different set of secret indicators until they are disappointed and then quit trading.

Many successful Forex traders now go through this learning process, myself included. This is only a problem if you refuse to learn from your mistakes. You need to get out of the cycle of relying on secret pointers and teacher ways to be successful.

You are helping yourself in the beginning. By learning to think for yourself and understanding that while anyone can trade foreign exchange, to be successful, you must learn to be a Forex trader.

To be a Forex trader


 

Forex trading is easy, all you need is a forex trading account with cash and then enter the foreign exchange market and start trading.

Being a Forex trader is more business. You need to grow from the starting point of having very little knowledge to the stage where you have a trading plan, understand the concepts and behavior of the forex market, be able to trade smart, and understand that gains and losses are part of being a Forex trader.

Learn how to trade forex by thinking like a forex trader in seven steps.


1. Understand your position in the Forex market

This is very important. You should understand that you are a very small fish in a large ocean.

 In the foreign exchange market, the majority of liquidity comes from major banks and experienced institutional traders. This is the big fish. Big fish will enjoy you as a small snack.

You're only deluding yourself if you think it will be easy to make money from these big forex traders.

You have to learn to swim alongside these big fish and catch the same currents that you do. Swimming against them just makes you prey and sooner or later you will be eaten.


2. Learn to read Forex charts and understand the foreign exchange market.

Many novice forex traders believe that these top forex traders have access to some secret forex trading strategies or use a secret set of indicators, but the truth is that this is not the case.

These major forex players use simple but proven technical analysis techniques - the most common are horizontal support/resistance, identifying trading ranges, and Fibonacci, then these fundamental topics are combined.

Start by accepting that the other key participants are highly experienced in the market and are making money because of experience and a full understanding of basic skills and not because they possess the Holy Grail of Secret Pointers.

3. Money management

You must understand as a novice Forex trader that the focus is not on how much you can get from Forex trading but on how you manage what you have.

This is the most common downfall of all beginner traders. It is common to see a beginner trader risk the majority of their account in one or two positions.

This style of trading is not sustainable and professional traders do not trade this way. Everyone at some point in their career is going to have a string of bad deals. The sample figure could be 10 losing trades in a row. The question is, do you have a money management plan that enables you to survive?

4. Focus on the market

Many novice forex traders open their forex charting software, activate their most recent indicator or hot instrument, and proceed to place their trades according to the instrument recommendations. This style of forex trading is unlikely to be a long-term success.

When these indicators fail to generate the required profits, these traders quickly move to another group of indicators.

You should focus on the forex market and understand what the indicators are telling you so that you can choose the forex trades that have the best potential to win.

Successful Forex traders use indicators and tools such as Fibonacci and Pivot Points, Price Channels, MACD, RSI, etc.

Many successful and unsuccessful traders use the same indicators.


The key is that successful traders understand how the market behaves around indicators and they understand what the signals mean.

The best way to achieve this is to stop switching between instruments and choose those that complement your trading plan, understand how they work, and then spend the time in the market to try them out.

5. Plan your trade and trade your plan.

The goal of every trader should be to earn points on every Forex trade according to his trading plan. Forex traders should treat every trade as a trading decision by calculating their risk and identifying entry and exit points, those that do not open themselves to large losses when a trade goes wrong.

Many beginner traders seem to lack the discipline to follow a plan for every trade. So what usually happens is the following; The novice trader will see a potential setup, decide some arbitrary amount to buy or sell with a quick guess, then place the trade without analyzing any risk and have an exit strategy.

Of course, this method of trading can be profitable in the short term, and this is more due to luck than skill. But eventually, luck runs out and the trader is caught falling asleep and the common finding is that the account no longer exists.

Do question 1 Beginner traders tend to ask themselves how much will I profit from this forex trade?
The first question experienced traders tend to ask themselves is how much risk/loss is likely?

6. Your mind is your strongest asset and your weakest link.

Entire books are devoted to the topic of psychology and its role in trading. This doesn't mean they will help you all, but you should take this as a sign not to ignore the topic.

You must learn to understand your personality traits and how they can affect your trading style.

A trader I know is a bad loser and when he has a bad trade, he has a habit of going straight back and trying to get those points back with worse results. But he understands this as a weakness and when he has a bad trade, he takes a 20-minute break before he returns to trading so that his emotions do not affect his trading decisions.

Second, you must make it your goal to never stop learning. You cannot reach a certain level and then you are satisfied. Every day is a learning experience in one way or another and you should be ready to learn lessons and invest time in improving your skills and experiences.

7. Understand that the forex market is always right or expect the unexpected.

The Forex market is an interesting place, but there is one thing every trader needs to know. Always expect the unexpected and don't get caught up in past successes. No matter what the charts or indicators tell you; Sometimes, the forex market does the opposite.

Whatever happens in the market, you must maintain an objective view of your strategy and the forex market and ensure that bubbles and crashes do not derail you in the long run.

By following these steps and learning to become a forex trader instead of just trading in the forex market, they will put you on the path to ultimate success as a profitable Forex trader.