So You Want To Be A Forex Trader!
Starting a journey into forex trading is a dream that has come true for me. It hasn’t been a long journey and I finally became a profitable successful trader after three years. Some might think three years is a long time but in real life everyone is different and it will take what ever time it takes for each individual. I’ve been profitable every year now for over 7 years.
I love this industry and in my opinion, it is probably one of the cheapest businesses to get into with a potential for unlimited financial gain once you understand and learn to do it the right away. You can start with as little as $100 to open a forex trading account but as in any industry, if you want to turn it into a full fledgeling income you will need to take a few steps to get there.
You might be brand spanking new to forex trading or have been trading for a number of years struggling away and I hope this article and others in my website, help you find a way to become profitable and successful, and get that financial freedom that we all yearn for.
I’m going to give you some pointers that have helped me, and that I think, will help anyone that wants to start and make it in the forex trading industry. There will be links to articles that I say are a must read to give you a good foundation for heading in the right direction on this path of trading forex successfully.
image credit www.distel.com
Points that I will touch on…
- Understanding what forex trading is
- Know yourself…. Psychology and Emotion in trading…very crucial
- Understanding Money Management… very crucial
- Educating yourself with courses and mentors… must do
- Trading Platforms, Demo Trading and Live Trading
- Learn a strategy that works for you and plan, plan, plan every trade… make good habits
These are just a few that I feel are key to starting out or turning your trading around if you’re struggling, and you will learn more as you travel through trading and experience it first hand. Just remember that you are in control of everything and you can step back and take your own sweet time to get to where you want. As I’ve heard from a trader…
“It’s a walk to wealth, not a race to riches”
Understanding what Forex Trading is
I will keep this short as there is plenty of information on the internet about what forex trading is.
Basically, forex trading or the foreign exchange market is a global market place for exchanging national currencies against one another. Forex is traded 24 hours a day, 5 days a week by banks, institutions, and individual traders.
Traders use a platform to trade either buy or sell on what they believe a currency pair will move to in order to make a profit and make money. Different participants in the market use currency trading in different ways that are needed for their own business structure. For example:
- businesses can use the market place to hedge a currency price for a business transaction that they have entered into with another party to lock in a price so that they don’t lose anything from the agreement enetered, in case of the currency moving for what ever reason.
- we already exchange money when we go overseas for our hoildays
- investors invest in various currencies to balance their portfolios and to try to gain better interest returns against their own home currency
- investment firms trade forex as a different investment instrument for investors within a fund like a banking fund, hedge fund, etc
- individuals trade forex via means of a computer, laptop, or other device for a living or to complement their income. This can be done pretty much all over the world, barring some countries that don’t allow it. Theses individuals are called Retail Traders and that is what I am and I would say you are.
The movements of currency pairs are measured in Pips and because of leverage a small movement in pips can garnish profits and losses, so forex trading is a high risk industry and should not be taken lightly. Only risk what you are willing and able to lose.
Anyone can now trade and participate in the forex trading industry by means of a broker that allows individuals to use a trading platform.
Know Yourself…. Psychology and Emotion in Trading
I have an article that you should read on the Psychology and Emotion in forex trading. It is an article that explains what you should be aware of when entering the forex industry and how to understand, learn about yourself and what you should do to put you on the right track for entering into this industry. Psychology and your Emotion is something that is a very important aspect of forex trading, and in my opinion, learning to understand and control your emotions is a large part to becoming successful. Go to the article, Forex Trading Psychology – Your Emotions to read and understand why it is important.
I have put this high up on importance as this is one topic that will help in becoming a successful trader.
Understanding Money Management
Again I have an article that is a must read to put you on a good foundation on the understanding of what and how to use money management (MM) to your advantage. MM is another very important aspect of forex trading that once you get a good grip on it you can propel your way to success. Got to the article Trading Money Management – So Important to have a good read.
Again, I’ve put this up high on the points, as MM is just as important as Psychology and will help tie everything together within a trading plan.
Educating Yourself with Courses and Mentors
This is a topic that many traders will debate on. Some say that there is plenty of information for free on the internet that can turn you into a trader, and they may be right in some respects. I tried that way and subscribed to many free courses and even though the information was good, I found it was very generic in my opinion.
I discovered, like any profession, there is an educating process that must take place. Either by free or by paying, studying and learning from people that are supposed to be experts in their field that are willing to impart their knowledge and turn anyone into successful participants in what ever industry they choose. I did it with my butchering and my training was a four-year apprenticeship with on the job manual training from mentors and experienced trades-people and also theoretical learning through a technical college.
Forex trading is no different and even though free information is great, everyone knows that if you spend on the right learning education it is mostly a method of getting you to the end goal faster, which is success and financial freedom. People that spend money on education, no matter what it is, health club personal trainer, how to fly a helicopter, how to draw, etc, are investing in themselves because they want to learn their thing the right way from the right people that have been there before.
But beware, like any other industry, there are many unscrupulous people out in internet land that are only after your money and are not real bonafide traders that actually trade markets at all. They make their money from selling courses. I will give my experiences below and don’t worry, I have found a true course and mentor that has not only turned my trading around but many others all over the world, and I am still a member of this establishment since 2013.
As mentioned above, I firstly went the free method path attending many free seminars giving out basic information in the hope to sign up for the paid training. Subsequently I went a whole turn around ending up taking three full on paid courses. Two of them were over $5000 each with one needing to fly across Australia to attend a full on weekend training. Both of these courses were good and had good sound strategies and systems in place but ultimately they were really only interested in capturing as many people to pay the joining fee, and add-ons along the way. I am not saying that there are not successful people still using the strategies and systems, but they didn’t work for me and I didn’t like the marketing of… “if you pay extra, then we will teach you to become a super trader”... These companies made their money from selling the courses and not from trading and with what I learned I was still left floundering in my trading.
The very last course I reluctantly took, cost less than half of the other two, was fully online and turned my whole trading around. The trainer and mentor is always available and answers his own emails and is a full time trader that also gives his own trade calls that he takes himself… every day. You can actually earn as you learn right from the start of the training and be among st fellow member traders looking, learning and asking questions in the members only dedicated forum. I have a review on the course and it will probably be the only costing course that I will recommend to anyone. You can read my review HERE.
I am forever grateful to my mentor as his course and constant help turned me into a successful profitable forex trader.
It is important to understand that investing in yourself for educational purposes is what can turn your life into success. Even Leonardo DaVinci said,“learning never exhausts the mind”, so just as long as you want to do something the right way, paying for education is an investment in your development.
You must have a broker. A broker will give you a free Trading Platform that you will use for your trading. For forex trading there are so many brokers that the companies are far too many to list. They are everywhere all over the internet. My first up advice is that it is best to find one that resides in your country of citizenship.
Each country has their own regulatory requirements and you should always be aware and check if the broker you are thinking of using is:
- Firstly regulated by your government authority entity
- Has a good track record from reviews and from other trader users feedback.
- Is financially stable.
- Has very good support at all times. Again reviews are a great place for checking
- Can be contacted by not only online but by phone and has a physical address in your country.
- Have very clear information on what charges they have for trading. Normally they charge by spread of the currencies they list and some also charge a fair commission. These are most common but you must check and compare against other companies in your country.
Once you show interest in a broker they will be quick to be in contact with you as they are hungry for customers in this competitive industry.
I do have an article of reliable brokers on the sidebar of my website and the article also has a tip of how you can save money from charges with a commonly used rebate system in the forex industry. You can visit the article… Forex Brokers, for my recommended, safe brokers and more information, but as I said, better to stick with one from your country. It is easier to get in contact with them that way.
A great place for checking the points above is a website called Forex Peace Army. FPA is like a policeman for the trading industry and they have also helped many traders that have been cheated by brokers, trainers and con artist. They have a list of companies and people to avoid and also have a great list of who can be trusted. If you find someone that you might be interested in, it is best to check if they are mentioned by FPA.
Trading Platforms, Demo Trading and Live Trading
Most brokers have a choice of trading platforms with Meta Trader 4 and Meta Trader 5 being very popular. I use both MT4 and MT5 and have used others but found that these 2 are the most suitable and stable for my use. They are normally supplied for free with a download to your device and you are able to get a Demo account as a trial for normally 30 days. Some brokers do extend the period if you let them know you are going to be a funded live account customer eventually.
Some bigger brokers can charge for their platform but it may be because it is their own developed platform and they only want serious investing customers. Just make sure you ask the right questions if they ask for a payment.
I recommend that if you are new to trading it is best to download a Demo Platform Account and keep the dollar amount similar to what you intend to start trading with. Brokers will give you $100,000 play money but unless you are going to start with that amount be sensible and trade with what you think you will start with.
Mostly you can download from any broker by filling out your email address where they will send a download link for the platform. I suggest you try to use the broker you are intending to possibly trade with so that you become accustomed to their platform and pricing of the pairs and it will be easier to transfer to a live account once you are ready.
Each broker has short courses on how to use the platform and there is plenty of information via YouTube or websites that have helpful hints. Every platform has its common indicators and you are able to add some others that you may find on the internet for your trading strategy. Brokers don’t mind you adding extra indicators as they really want you to become a live account holder. That is when they start making money from you when you start to trade with money. If you get stuck with anything, feel free to shoot me an email and I can help as well. I also have a heap of indicators that I can send your way if you’re looking for something.
Practice trading like you are using real money and take it seriously because if you pick up bad habits then they will ultimately creep into your real live account trading. Trading is a business and loss of money is what happens in the real world of business if you do not concentrate on the job at hand. For a demo account the broker doesn’t normally ask for identification or legal information, but If they do, then look else ware. After all, it is only a Demo account you are wanting. The legal stuff is for when you open a live account and in the next section below.
Funding Your Live Account…
Once you have decided on the broker and decided to fund your account, you will have to submit personal identification information like address, bank account details and sometimes even a photo identification of yourself. Each broker may be different but this is a legal requirement for stopping money laundering and criminal activity. If your broker doesn’t ask for this information, then they are probably a scam broker so don’t hand over your money.
Just a tip, make sure you go through the legal identification process first before you commit or deposit any large amount of money into your brokerage account. Once the money goes in, and if you have a problem with the process, it is very difficult to get your money out. The brokers will let you deposit and trade without any issue but before you can withdraw any funds, you must have all of the identification process passed and approved.
Most brokers will only allow you to withdraw back to the same method that you make the original deposit from. Meaning, if you deposited through a Credit Card, then your withdrawl will be back to the same Credit Card. Brokers will ask you for updates when a withdrawl is requested if a change is requested. My point here is, when you decide to deposit, think hard about your depositing method.
The live account platform should be the same as the demo platform but you may have some extra add-ons to help you find trades and some better indicators for trade identifications. These should be free from your broker as well and sometimes they may ask you if you would like a program as an added benefit but they may charge you for it. To be honest, I have never needed anything extra than the MT4/MT5 platforms that I have from my broker and I have been trading with AxiTrader for most of my years and have never had a problem with them or the platform.
Who ever or what ever platform you decide to trade with, just learn it well, get accustomed to the brokerage firm and ask as many questions as you need. After all, it is your money that they want through brokerage and commission.
Learn a Strategy and Plan, Plan, Plan Every Trade
If you’re still reading then I must say you are on your way to becoming a successful trader. Don’t get me wrong, you still have a long way to go but you’re heading in the right direction. This next section is what traders call looking for the holy grail. Finding a strategy that works for you by earning you profits and keeping those earning rolling in and, in a consistent manner.
In the education section above I told you about the course that helped me become successful and profitable and I still use the same strategy that I learned all those years ago. This means that the strategy is stable and robust and has been tested and proven over these many years. I do have other strategies but the strategy from my mentors course is still my main money earner. It as survived the test of time and works well for me.
Once you find what works for you then it is a matter of replicating the routine over and over. Planning each trade by following the strategy steps is what must be done to make it in forex trading. Harvest good habits through routine and following the rules that are set out.
By failing to plan, you are planning to fail. I don’t know who came up with this saying but it is 100% correct.
Unfortunately, human character is that we like to bend some rules along the way. We think we know better than the market or the strategy and we end up burning our fingers. I have done it and many others have done it as well. It’s OK to slip up sometimes but you soon get a reality check when you lose some unnecessary money through a stupid mistake of not following your plan. You quickly get on board and get back on track. I can assure you of that.
Stick to the strategy, follow the plan and believe in your strategy and plan. The rest will fall in line on its own.
To get into the forex trading industry is relatively easy. Just be aware of some scammers out there in internet land and when you find the right recipe, so to speak, forex can be a rewarding business via self-confidence, control of your life and of course financial in the form of self sufficient and financial freedom for you and your family. Points to understand and work on.
- Learn and understand what the forex industry is about and how it works.
- Get to understand your psychology and learn to control your emotions while trading. Read and watch videos, as many times as you need.
- Understand Money Management and how it works. Just as important as psychology.
- Educate yourself and don’t be afraid to invest your hard-earned cash in good proper training, a course and a mentor. I did and it changed my life. I implore you to check out the course and mentor that did it for me. Visit my review here.
- Find a reputable broker. I recommend you find one in your home country for peace of mind and ease of communication.
- Use a stable platform. This ties in with your broker. I have used MT4 and MT5 for many years and have never had any major issues. Demo trade for as long as you need and only fund your account with money that you really won’t miss and hurt your well being if it all goes the wrong way.
- Learn a strategy that works for you and suits your current life conditions when you start out. Most people trade part-time as they work when they start out. It makes sense then that you find a strategy to fit in your current life conditions and you can always trade more when you get to the point of not needing to work as much or as long. I am pretty sure though, that you will still trade the same strategy you learned well, while you were working. Let’s face it, if ain’t broken, why change it at all.
All in all I think you’ve done well by reading the whole article. I hope it helped and you have a better insight on what you can do to become a successful profitable forex trader. Just a small thing I add, I still work part-time but only because I can now choose to do so. That is what trading has done for me. IT HAS GIVEN ME CHOICES.
And, I hope it will give you choices as well.
Happy trading and browse through my website for other useful information to get on the right foundation for forex trading.
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