Are you curious about learning Forex trading, however not making an attempt to be 'Wolf of Wall Street' regarding it? Then it is time you get familiar with Forex -
First, a history lesson: The Forex, or the foreign exchange market, want to be the domain of enormous money establishments, firms, central banks, hedge funds, and very flush people. But, a ton of things, the web changed all that and the barrier to entry for Forex is now, more accessible. Simply anyone can buy and sell currencies with the press of a button/mouse through online brokerage accounts.
Forex is additionally referred to as FX or currency trading and a decentralized international market wherever the world's currencies are traded.
It's a biggest, most liquid market in the world where daily trading volume prodigious around $5 trillion. The Forex market is open twenty-four hours every day, 5 days per week, apart from holidays — and any firm, person or country will take part.
Second, Learn Forex trading isn't difficult. The essential thing each novice should do first is to know the fundamentals and to take it moderately. So, if you are familiar or you have any experience in currency trading, you can learn pretty quickly.
Let's start the best way is to learn Forex trading
Study first the Forex basics
It's essential to understand the basics to trade effectively. Every trader wants to achieve their aim. But unfortunately, most of the traders due to terrible thoughts “get rich in a short time”, skip the basic information and instant jump into trading that will lead them, for this reason they can't a success.
So, be a successful, you need to learn first how the Forex trading work. With basic information you will get: pips, and quote, most famous currency, crosses, exotic pairs, jargon, spread, margin & leverage, risk management, market analysis, trading psychology and more. Check out ForexVolumes Forex basics guide. It won't make you an expert but build your foundation. It will not take plenty of time, should take a few days.
Learn risk management
It's necessary to learn proper risk management to success in trading. It's a control of your invested capital from losses. Think you have the best strategy in the world, but without proper risk management you have nothing. Trading without risk management is similar “jump onto the middle of the sea without knowing swim”. So it's very important to earn a profit with Forex trading.
Select one currency pair
In the Forex market, two different currencies quotation is called currency pair with a relative value that one currency being traded against another currency. In a currency pair, firs or reference currency is known as the base currency, and the second or quoted currency is known as the base currency. The profit and loss totally depend on currency movements. So, understand of currency move is very important. But unfortunately, due to different characters, densities, participants, and unpredictable nature of markets it's complicated. For this reason, recommending you to start with any single currency pair. With your experience growing up you can move to others. So to learn good trading, you may choose your nation currency or most famous currency such as USD, EUR, YEN, GBP, Etc.
Practice on a demo account
A demo account is almost similar a real trading account. It helps you perceive the trading platform completely without the stress of losing funds. So you can test any strategy and prepare yourself.
The main thign is in a demo account, forex brokers will give you virtual money for trading, you don't need to deposit your fund. I recommending you from my experience open a demo account and practice on it before a jump into real trading. It's a perfect method to begin with, a trading platform because it provides you the feel and access to any or all options before you invest your money in real trading.
Try to perform on weekly analysis
Forex analysis looks at the adjustments in the currency exchange market. Forex analysis includes seeing examples in value history to decide the higher possibility time and place to enter and leave the trade.
So, try to understand and perform on weekly charts to check news and patterns that would have an effect on your trade.
Develop a strategy
There is no specific trading strategy in the world to succeed. But, there's a fitting trading technique for the various market condition. A good strategy is a key to success on trading. Most cases 85% of traders can't success cause they have no good or specific strategy. They use generally many strategies and repeatedly changes their techniques. So build up a specific strategy from your own skills and experience. It may not happen in one day or one week or in a month, you will need lots of time to make. You can't do it at once, will fail again and again, but do not lose your confidence, depends on yourself that you can do. And do not be disappointed, remember that hard work is the key to success.
Conor McGregor said “There's no talent here, this is hard work. This is an obsession. Talent does not exist, we are all equals as human beings. You could be anyone if you put in the time. You will reach the top, and that's that. I am not talented, I'm obsessed.”
So keep trying until buildup a perfect strategy with 60-70% probability to win and experimenting on demo account that its working 3 times in 5 times.
Start with small funds
There are no different to start trading with small or big capital. But, there are many reasons: such as your skills, managing your risk and control your emotions, test your strategy, etc. Forex trading is highly risky to lose capital for a beginner. So, it's better to open mini, micro or cent account with a suitable broker that will allow trading with a small deposit. If you success on your first trade, undoubtedly it's a lot of wells, but if you make a mistake and loss, initially bad, but well for the future. This will teach you much more than a book, website or forum, which you might not think even, will more than what you learned from the demo account.
Work hard with confidence and love
You need a realistic mind to deal with currency trading.
There's an idiom: "The most ideal approach to end with $500 in Forex is, to begin with, $1000". Sad but true.
Earn with Forex isn't easy, hard if were that simple, most of the traders would become a millionaire.
You have to a deep love and passion for trading. Whenever you lose a big amount such $1000, or loss again and again then your confidence and love will give you the self-control to continue on trading.
Take a look at the image before I say something else:
If you look at the image carefully, you have guessed something. So, you have to work hard with confidence and patience and don't give up. In order to make a profit on the currency market you need to buy low and sell high, therefore it's competitive and a battle between you and other traders. That's reason work hard with creativity.
Furthermore, in the beginning, don't worry if you failed and don't change your trading strategy, it's common. Sometimes experienced traders also make a mistake and failed.
Define a realistic goal and Setting a good trading plan
Before start, you need a realistic goal or a good plan. A good plan will give you a guide to achieve your aim.
Benjamin Franklin said, “If you fail to do plan, you are planning to fail!”
Setting a good plan is a key to become a successful trader. So research and build up a strategic plan that includes short and long-term goal and the subtleties of trading: what you will trade, set your trading time frame, etc. Your plan and aim will motivate you to earn more that you loosed.
Be educated, Experiments and practices
To take trading to income for a long time, you have to learn new things regularly. People say's “There is no end to learning”.
Play a game with Forex - Yup, become an expert you need to try different techniques, method. You may experiment with different currency pair. Develop strategies, test them and compare with each other. Try to open orders, sell and buy, and more as your mind. You need to think, how to do well.
Keep on mind, this could be at no cost, initially, don't waste your money on doing experiment it. Don't hesitate to practice with a demo account, practice makes a man perfect. But be careful don't over practice on a demo account.
A little bit more to success in your next trade
- When you complete everything right way and move to live trading, those few steps will help you:
- Analysis of the market and take preparation.
- Check your last trade.
- At the beginning of trading, make a good trading plan.
- Set the key (stop losses) for your trade, otherwise, it will formally finish.
- Don't take risks 2-3% of trading capital - it's part of proper risk management.
- Don't forget to check the economic calendar before start a trade.
- Do not trade if you have any concerns other than trade.
- Don't be afraid of losses, it will make you nervous.
- Control your emotions and greed.
- Try to well than before you did - of course, you will succeed.
The final line
A structured approach must help you to become a successful trader.