There are three simple steps to take in forex trading training that will ensure that you will make profits on a consistent basis. I will mention them now and go through each one in more detail in the rest of the article. Step 1, Learn. Step 2 Practice and Step 3, Action!
Step 1. Learn
No doubt you are reading this article because you are interested in training - you may not have realized it yet but you are in the learning process. This is a great attitude!
What you have to learn is an incredible amount of information and it is always best, especially if you know nothing about forex and trading, to learn the basics.
Without the basics there is no foundation upon which to build the rest of your experience on. I know that you will hear many traders say that the best way to learn is by doing and learn by your mistakes. Well, in a way I agree with this but logic and common sense demands that if you can save money, time and stress by learning a few fundamentals first then you will be much better off!
The first thing that you need to learn is the terminology, the market jargon. You need to know what 'pairs' are, how rates are quoted, how the market works, what is fundamental analysis and technical analysis? What is mean by support and resistance, take profit and stop loss orders? - You need to read, read a lot and digest.
Give yourself a period of time for this. Get a few books from Amazon, join a few Newsletters, and read the financial press especially the Financial Times (or go online and go FT.com). A great wealth of information can be got from CNN especially their markets news. You would be amazed when you focus on this aspect of knowledge acquisition how much things make sense to you later as you advance!
Step 2. Practice
This step is essential and should not be skipped. There is always the temptation of new traders to get their feet wet as soon as possible - try and resist this. The reasoning is solid here. By putting yourself in a practice situation, with say for example a dummy account (usually supplied as a hook by some forex brokers), you are at least practicing 'trading methodology' with 'action'.
It's all fine and well being academic but you need to experience the results of your actions on a neutral ground to try and develop either a trading strategy and/or technique. However the most important aspect on this exercise is as a 'confidence' building step.
It is estimated that up to 40% of would be traders, at this stage decide not to go ahead with forex trading for a mixture of reasons. One of them is a recognition that they don't have the analytical skills combined with the 'risk taking' aspect to be successful and recognize this. Others lose confidence in their abilities because more trades are unfavorable and they 'give up'.
You should use these practice sessions to 'identify' your weaknesses (all traders have weaknesses) and work on them - perhaps it's a need of more knowledge, perhaps it's fear - only you can make that analysis about yourself - but it has to be done in order to confidently progress to the next step!
Step 3. Action
When you feel able to, confident and enthusiastic - just hold back a little. All the forex trading training that you have been going through has only been 'foundational'. Actual trading with your 'own money' feels totally different and has it's own stresses, which you will need to come to terms with - especially you first 'loss'. You will have to deal with losses as this is a risky business but the rewards are also exhilarating.
Put it this way, I don't think you would get into a hot bath without dipping your toe in first! This is the method I suggest. Enter the market gradually, start small and as you get more success - build on it, build your confidence and build your deposit at the same time.
When I started trading both interbank and on personal account I had a golden rule that limited my losses to no more than 50% of my profits. You just have to accept that there will be days, even periods where you misread the moves - that's trading and that's part of learning as well.
To find out more how you can become a profitable trader on a consistent basis sign up to my Free Weekly Newsletter [http://www.forex4traders.com]. Here you will learn valuable tips to help you make money. Join Forex4Traders.com [http://www.forex4traders.com] here to receive all the benefits.
Step 1. Learn
No doubt you are reading this article because you are interested in training - you may not have realized it yet but you are in the learning process. This is a great attitude!
What you have to learn is an incredible amount of information and it is always best, especially if you know nothing about forex and trading, to learn the basics.
Without the basics there is no foundation upon which to build the rest of your experience on. I know that you will hear many traders say that the best way to learn is by doing and learn by your mistakes. Well, in a way I agree with this but logic and common sense demands that if you can save money, time and stress by learning a few fundamentals first then you will be much better off!
The first thing that you need to learn is the terminology, the market jargon. You need to know what 'pairs' are, how rates are quoted, how the market works, what is fundamental analysis and technical analysis? What is mean by support and resistance, take profit and stop loss orders? - You need to read, read a lot and digest.
Give yourself a period of time for this. Get a few books from Amazon, join a few Newsletters, and read the financial press especially the Financial Times (or go online and go FT.com). A great wealth of information can be got from CNN especially their markets news. You would be amazed when you focus on this aspect of knowledge acquisition how much things make sense to you later as you advance!
Step 2. Practice
This step is essential and should not be skipped. There is always the temptation of new traders to get their feet wet as soon as possible - try and resist this. The reasoning is solid here. By putting yourself in a practice situation, with say for example a dummy account (usually supplied as a hook by some forex brokers), you are at least practicing 'trading methodology' with 'action'.
It's all fine and well being academic but you need to experience the results of your actions on a neutral ground to try and develop either a trading strategy and/or technique. However the most important aspect on this exercise is as a 'confidence' building step.
It is estimated that up to 40% of would be traders, at this stage decide not to go ahead with forex trading for a mixture of reasons. One of them is a recognition that they don't have the analytical skills combined with the 'risk taking' aspect to be successful and recognize this. Others lose confidence in their abilities because more trades are unfavorable and they 'give up'.
You should use these practice sessions to 'identify' your weaknesses (all traders have weaknesses) and work on them - perhaps it's a need of more knowledge, perhaps it's fear - only you can make that analysis about yourself - but it has to be done in order to confidently progress to the next step!
Step 3. Action
When you feel able to, confident and enthusiastic - just hold back a little. All the forex trading training that you have been going through has only been 'foundational'. Actual trading with your 'own money' feels totally different and has it's own stresses, which you will need to come to terms with - especially you first 'loss'. You will have to deal with losses as this is a risky business but the rewards are also exhilarating.
Put it this way, I don't think you would get into a hot bath without dipping your toe in first! This is the method I suggest. Enter the market gradually, start small and as you get more success - build on it, build your confidence and build your deposit at the same time.
When I started trading both interbank and on personal account I had a golden rule that limited my losses to no more than 50% of my profits. You just have to accept that there will be days, even periods where you misread the moves - that's trading and that's part of learning as well.
To find out more how you can become a profitable trader on a consistent basis sign up to my Free Weekly Newsletter [http://www.forex4traders.com]. Here you will learn valuable tips to help you make money. Join Forex4Traders.com [http://www.forex4traders.com] here to receive all the benefits.
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