So you are thinking about getting started in Forex trading. You already know that it is one of the most risky forms of investing. You have investment capital to risk and are not going to be using your monthly rent money to trade. enough time to follow the market daily has been set aside.
Fabulous! You now have the basicsof what everycurrency trader needs to get started . But have you prepared yourself by covering the three most important things to do before you risk any money?
Educate yourself first! This is perchance the biggest slip beginning forex traders make. These traders make up the lions share of the 95% of all traders who do not succeed . Before you even risk one dime or even open an account with a forex broker take the time to study a few books or enroll in an online training program about forex trading. You need not master all the esoteric details of every trading strategy. I am talking about the fundamentals. Basic aspects of the market, what the charts entail and what the symbols mean. The lexicon and lingo used among traders. Long vs short, pips, spread, margin etc. By knowing all these basics you will be ready when you begin to trade. You need to be surefooted in your knowledge if you want to make good decisions. There is no “pause for added research” button in live forex trading.
Understand and mold a “winning trader” mentality. Currency trading can be extremely taxing on the emotions leading to poor decisions and losing trades. It is important to be prepared for these emotions and have techniques available before hand to keep them in check. The elite currency traders are the individuals who have the ability to operate in the market arena separated from powerful emotions. There are all sorts of resources available to help you understand this aspect. Many techniques used by martial artists, elite soldiers and law enforcement officers can be adapted for this purpose. Learn about it, prepare and practice your personal mindset techniques before you trade with your hard earned money .
Practice, practice, practice! This is listed third for an important reason . inexperienced would be currency traders who begin by immediately fiddeling with a demo account can become overwhelmed and discouraged promptly. Trying to figure it out on the fly is difficult or nearly impossible. The practice account is where you apply the fundamentals of what you have discovered in the first two steps. Hopping in unprepared is like joining a Karate school and starting out sparing with a champion on your first day. You can consider this practice a mental version of military or self defense training. You refine the skill set until it becomes automatic when it is really needed. If you have prepared yourself you will learn quickly how the market works. You will then be better able to process the lessons learned from practice and adapt your strategies accordingly with little second guessing. Many successful traders will tell you that they practiced for months prior to putting even one penny in the market. This is a winning approach!
By following the steps I have expressed in this article you will become a a more successful trader. The prior education gives you knowledge. The mental preparation gives you confidence to apply that knowledge. The practice gives you the ability to react to sudden changes and act in the proper way on reflex without hesitation . These three things are by no means the only things you need but they are the core foundations for getting off on the right foot in currency trading.
There are a lot of beginning traders using something more to help them get started quickly in currency trading. Automated currency trading with a forex robot. In the third action above I talked about practice. Using an Expert advisor(EA) with your practice account is a great way to learn. An EA is a software application most often referred to as a forex robot. An EA can be set up to run on your practice account. There are many robots to choose from. Just one example is Forex Ironman from the Next Generation FX Trading Team. This EA is very easy for a beginner to set up and use. Following along as an EA makes practice trades can be a great training tool.
Hassam 