How to Start Your Forex Trading Career
Tips for Newbie’s
Trading the Forex market can be a very rich and rewarding experience for those who start from a solid foundation, and for those who jump in head-first with no previous experience and no pre-defined trading plan.
I mean that in the most literal sense because if you have no trading plan and no real idea of what being a successful Forex trader demand, then you will quickly develop and reinforce all the wrong habits that eventually will destroy your trading account much faster than you think.
Building a solid trading foundation
In my experience, many traders tend to skip over learning the basics of Forex trading. Even they don’t understand what the Forex market is or why it exists and how it works. It may seem like you can ignore learning about the basics of Forex, and making big mistakes that many beginning traders make. Sometimes many don’t even realize they are making it.
You need to take some time to learn about the Forex market and get familiar with the terminology used by traders. It is like, you would not expect to take university physics class and skip ahead to the most advanced chapters. I know, you start at the beginning and work your way up and everything builds off the previous information you learned. Actually, it is the same thing in trading but for some reason many traders don’t seem to behave as if it is. So, if you want to properly prepare yourself for a career as a trader, you need to start from the beginning and learn the basics to build a foundation.
How do you know when you are ready to trade live?
The first and perhaps most important factor in determining whether you are ready to trade a live forex account is to sit down and look at your entire personal financial image. If you are planning on funding your trading account with money that you might possibly need for any living expense than you are not ready to trade. In fact, you need to have disposable risk capital that you are totally OK with losing. This is the first step in developing the proper habits of a successful forex trader. And, if you are trading with money that you need for bills or anything else in your life then you are doomed to fail because you will be overly emotional from the very beginning while trading, and it is a sure-fire recipe for disaster.
I suggest you demo-trade for a month, two, or three before trading your real money in the markets. Develop a good method for entries and exits so that you already know what to look for and what to do when you trade with real money. Perhaps,you need to know what you are going to do before you get into the trade because if you try to decide while the trade is happening you will inevitably make the wrong decision due to emotion, and for this you have to be aware of trading psychology. You need to have all scenarios planned out before they happen. You need to plan strategic plans so that you have options, if one fail then to move another.
Learning from people who are already consistently successful in the Forex market is probably the best route to go. But, the problem is that many people claim to be successful traders but few actually are for long periods of time. Binary options or Forex trading is full of people trying to make a quick buck by selling some bogus trading systems that are overly complicated and simply don’t work.
So, before landing yourself in trading, do some research about the trading markets. Only trade money you can afford to lose, and start to study price action and naked price charts. Learn from a good mentor, practice with a demo-trade until you get your trading plan tweaked just right. After that, make the decision to dive in with real money.