Successful Forex Trading In 5 Steps
One of the most asked questions of beginners is how exactly the right way to start trading forex. Lots of people who start trading only armed with trading signal subscriptions, or even pay for expensive training / workshops that discuss trading strategies when they are actually not familiar with forex. Even the term "lot" or "pip" may not have been understood.
Traders who start trading without enough knowledge is like a man who desperately plunge into the lake when he can not swim. The result? Death. Yes, there are some survivors. Some you know, just b-e-b-e-r-a-p-a. That is because they are lucky to be able to meet with people who swiftly "threw buoy" towards them. The less fortunate? Through.
You need to know that trading is not just glaring at charts and mixing up various indicators. Trading is a skill that must always be sharpened consistently every time you make a transaction.
Oh yes, I need to remind you again that there is no such thing as "holy grail" in trading. For those of you new to the term, "holy grail" is a term used to refer to a system or trading strategy that guarantees its accuracy. In other words: impossible loss. Again: such a thing does not exist!
So, before you get caught up in the endless quest for "holy grail", allow me to share a little experience for you who just want to start forex trading.
Learn the basics of trading
No karateka has a black belt overnight. He must certainly start from the white belt, study the horses, kihon, kata, kumite and so forth. It takes a process and time that is not short to at least be a karateka black belt.
Trading too. Do not dream can be a great trader just because you have followed a day or two workshop without having previously had a basic knowledge of trading. At least you should know first what it is lot, contract size, leverage, margin, risk management and trading plan. You must first understand what is the trend, support and resistance. Then you are worthy to learn more complex trading techniques.
Practice recognizing patterns
Have you ever seen how a table tennis athlete can easily serve and play a ball that moves so fast? They do not get that skill in just one day. It takes a lot of practice and watches the direction of movement of the ball.
In the (technical) analysis there is the concept of "history repeats itself". History is always repeating. In this context the recurrence is actually a pattern, be it the pattern of price movements or patterns of technical indicators. By recognizing certain patterns, you will be able to predict where the price will move with reference to its "behavior" from time to time.
Develop a trading plan
This is the stage that will determine what will be your trader later. At this stage you will design a strategy that you will use and of course to be able to carry out this stage you must have successfully undergone two previous stages.
At this stage you can experiment with several different technical indicators, several different currency pairs and later you will find strategies that fit your personality as a trader.
You may try to adopt another successful trader's strategy, but you must remember that one strategy that successful people use will not necessarily succeed in your hands. This is because one of the requirements of a good strategy - as I mentioned in the previous paragraph - is a strategy that suits your personality.
Try the strategy in demo account
Yes ... yes ... there are traders who skip the demo stage and directly trading with a live account because they want to get results from trading. Indeed there are also who can be successful without going through a demo. There is. Not all.
Demos allow you to test the profitability of your trading strategy. Not only that, the demo can also hone your skills.
It is at this stage that you will be able to learn where your strengths and - more importantly - your weaknesses and your trading strategy. If you can not profit consistently in demo account, I do not recommend to rush to use live account.
Consistent profit in demo account, then use real money.
Evaluate
This is the most important and hardest stage to do. At this stage you must test whether the strategy you use can actually generate consistent profit or not. If not, then it's time you make improvements to the strategy.
In evaluating you must be fair. There are times when mistakes do not lie in your trading strategy but on indiscipline you run a trading plan. Sometimes people do not want to admit that he made a mistake and this is fatal for a trader.
Forex trading is not a way to get rich quick. Also not a computer game that you can win by typing some cheat code (cheat code). Trading is business and businesslike in general takes time, effort and - of course - enough capital to "win the game".
Good luck.
Traders who start trading without enough knowledge is like a man who desperately plunge into the lake when he can not swim. The result? Death. Yes, there are some survivors. Some you know, just b-e-b-e-r-a-p-a. That is because they are lucky to be able to meet with people who swiftly "threw buoy" towards them. The less fortunate? Through.
You need to know that trading is not just glaring at charts and mixing up various indicators. Trading is a skill that must always be sharpened consistently every time you make a transaction.
Oh yes, I need to remind you again that there is no such thing as "holy grail" in trading. For those of you new to the term, "holy grail" is a term used to refer to a system or trading strategy that guarantees its accuracy. In other words: impossible loss. Again: such a thing does not exist!
So, before you get caught up in the endless quest for "holy grail", allow me to share a little experience for you who just want to start forex trading.
Learn the basics of trading
No karateka has a black belt overnight. He must certainly start from the white belt, study the horses, kihon, kata, kumite and so forth. It takes a process and time that is not short to at least be a karateka black belt.
Trading too. Do not dream can be a great trader just because you have followed a day or two workshop without having previously had a basic knowledge of trading. At least you should know first what it is lot, contract size, leverage, margin, risk management and trading plan. You must first understand what is the trend, support and resistance. Then you are worthy to learn more complex trading techniques.
Practice recognizing patterns
Have you ever seen how a table tennis athlete can easily serve and play a ball that moves so fast? They do not get that skill in just one day. It takes a lot of practice and watches the direction of movement of the ball.
In the (technical) analysis there is the concept of "history repeats itself". History is always repeating. In this context the recurrence is actually a pattern, be it the pattern of price movements or patterns of technical indicators. By recognizing certain patterns, you will be able to predict where the price will move with reference to its "behavior" from time to time.
Develop a trading plan
This is the stage that will determine what will be your trader later. At this stage you will design a strategy that you will use and of course to be able to carry out this stage you must have successfully undergone two previous stages.
At this stage you can experiment with several different technical indicators, several different currency pairs and later you will find strategies that fit your personality as a trader.
You may try to adopt another successful trader's strategy, but you must remember that one strategy that successful people use will not necessarily succeed in your hands. This is because one of the requirements of a good strategy - as I mentioned in the previous paragraph - is a strategy that suits your personality.
Try the strategy in demo account
Yes ... yes ... there are traders who skip the demo stage and directly trading with a live account because they want to get results from trading. Indeed there are also who can be successful without going through a demo. There is. Not all.
Demos allow you to test the profitability of your trading strategy. Not only that, the demo can also hone your skills.
It is at this stage that you will be able to learn where your strengths and - more importantly - your weaknesses and your trading strategy. If you can not profit consistently in demo account, I do not recommend to rush to use live account.
Consistent profit in demo account, then use real money.
Evaluate
This is the most important and hardest stage to do. At this stage you must test whether the strategy you use can actually generate consistent profit or not. If not, then it's time you make improvements to the strategy.
In evaluating you must be fair. There are times when mistakes do not lie in your trading strategy but on indiscipline you run a trading plan. Sometimes people do not want to admit that he made a mistake and this is fatal for a trader.
Forex trading is not a way to get rich quick. Also not a computer game that you can win by typing some cheat code (cheat code). Trading is business and businesslike in general takes time, effort and - of course - enough capital to "win the game".
Good luck.
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