In order to become a successful Forex trader, you have to go through the following steps:
You need to be educated in Forex – this can take anywhere from three to five years.
You will lose money – the only way you are going to know if you’re a successful trader is by opening an account and losing money. You will need to learn what your personality type is and how you will react to losing money in trading. Until you’ve lost eight to ten trades in a row, you won’t know how you’d react.
Take part in this practical learning – it’s all part of the learning curve.
Let’s use an analogy of a football team.
What do you think is better preparation for winning a grand final; Winning every game by 50 points; or knowing how your team reacts when they are well behind at half time?
A good football team that meshes together is always going to go through both winning and losing positions so they understand that they need to work hard and go out and give it their best. It’s not that these teams have an ‘I’ve never lost’ mindset. You can’t assume how you will react in a situation, you’ve just got to go and experience it.
You have to go through an unprofitable period where you lose money trading to know how to deal with such circumstances, so unless you’re willing to lose money trading don’t even attempt to get into the market. It won’t be easy, Don’t think you’ll start trading within three months because you won’t. By the time you understand the market, the risks of money management, setting up a strategy, and signal servicing – all of the things you need to be able to establish a trading plan – you are looking at a good six months of solid effort.
Next, you need to take your strategy into a stimulating environment. There’s no real risk taking your strategy to the stimulating environment – your emotions aren’t attached to it and you won’t be losing any real money. Test your strategy to know that it works and has longevity in the market.
While taking your strategy into a stimulating environment you’ll be learning different technical analysis tools required for trading Forex including Fibonacci Code and Bollinger Bands. This is only executing the trade, then you’ve got the platform learning to do – to start understanding the ‘how to’ of Forex trading.
You’ll need to learn such things as how to: Place the trade
Execute the trade place a stop loss
Put a bracket order inPlace a limit order