If you want to learn forex trading, you need to get the right Forex education and work smart and you will be able to join the elite 5% who make big profits and avoid joining the losing majority. Let's look at how to learn Forex trading the right way.
1. You are Responsible
If you think that someone can sell you an e-book or forex trading system and make you rich think again. While you can get good forex education from some sources you can not follow it blindly.
Successful trading comes from within and means having a forex trading strategy you understand and have confidence in, so you need to do some homework.
If you do not understand EXACTLY how your Forex method works, you will not have confidence in it and you will not have the discipline to follow it through losing periods.
2. Avoiding Common Pitfalls
Many traders put in a lot of effort but get the wrong forex education and try methods that are never going to work.
Here are the two most common errors you can make:
This method makes me laugh, you can not win and its obvious why – all the data is random. 95% of forex traders lose but this increases to 100% in the case of day trading.
Many traders think they have to predict where prices are going to win – but predicting is really hiring or guessing and you will not make money relying on hope. You need to act on confirmation and I will come back to this later.
Also many traders fall for the markets move to scientific theory – rubbish! They do not. If markets moved to scientific theory, we would all know the price in advance and there would be no market.
There are two most common mistakes and there are many more – they are mostly believed by lazy traders who think trading is easy.
3. A Forex Trading System For profit
You can build one easily and it only needs to be simple and your all set to trade for profit.
If you learn Forex trading correctly you will see why – simple trading systems are more robust and have fewer elements to break.
Use Forex technical analysis and charts and ignore the news. If you do it based upon charting you will be able to simply follow price trends and lock into them.
A simple currency trading system that trades support and resistance is ideal – you either look for it to hold or break and go with the potential move. What you need to do is CONFIRM you're trading signals before entering.
Most traders like to simply buy into support and hope it holds and predict.
What you really need to do is wait for support to hold, by watching price momentum turn up – You are then trading with the odds. If you do not know about momentum indicators look them up.
If prices break above resistance learn to go with the break and learn breakout methodology. Most major moves start from new market HIGHS not lows – so learn to go with the breaks based upon momentum.
That's a simple system outlined that will work just support resistance and some momentum indicators.
4. Deal With Risk and leverage
Leverage is what makes Forex trading so lucrative and also destroys novice accounts because they can not handle it.
You need to learn to take calculated risks when the odds are in your favor and employ strict money management. Do not make the mistake of trying to restrict risk to much as you will simply create it and guarantee you will be stopped out.
It's a balancing act you need to take risks but make sure the odds are in your favor when you do
5. A Plan For Profit
In any business you need a plan and Forex trading is no different, set a target and work towards it.
If you were to compound 100% per annual you will be up there with the best traders in the world.
Be patient in reaching your goal – good high odds trades do not come around everyday, so trade sparingly.
I know traders who trade just a few times a year and compound 100% or more!
Keep in mind in forex trading you get paid for being RIGHT not the amount of times you trade.
If you want to be a professional Forex trader you can, if you learn Forex trading the right way and get the right Forex education.
Most traders are too lazy, or think it's easy to win and while it's not difficult, you do need to take responsibility and work smart in the right areas.