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If you have seen forex trading online and you have seen all the opportunities to make money, you may be wondering what is the best way to learn forex trading.
You should take the time to read about how forex trading works, make forex trading, active forex trading time, etc.
The first thing I will say is nothing beats experience, if you want to learn forex trading, that’s the best way. When you first start, you have to open a forex demo account and try some demo trading. This will give you a good technical foundation on the mechanisms of making forex trading and getting used to using the trading platform.
The fundamental thing I’ve learned through experience, and no number of books or conversations with other traders can teach me this, is the value of exiting the market when the reason you enter a trade doesn’t apply. It’s easy for traders. Think the market will come back in their favor. You will be surprised how many traders fall prey to this trap and are astonished and heartbroken when the market only presses further towards the direction of the initial trade.
John Maynard Keynes’s famous and painful statement stated, “Markets can remain irrational, longer than you can liquide.” In other words, there is no point in saying that the market is acting irrationally and will happen (meaning towards your trades) because extreme measures define the capital market from the start.
Learning forex trading by demo account only is that you can’t feel what it’s like to get your hard-earned money on the phone. What I recommend for this, is that you open a micro forex trading account or account with a variable size broker that lets you make small trades.
Small trading will allow you to put your money on the line, but it is a small risk if you make a mistake or lose money. It will teach you more than anything you can read on forum sites, books, or forex trading and give you a completely new angle to all the things you will learn when trading on a demo account.
Along with that of course, comes the need to understand what you are trading. New traders tend to jump in and start swapping anything that looks like moving. They will usually use high leverage and trade randomly in both directions, usually leading to a loss of money.
Understanding the currency you buy and sell makes a big difference. For example, the currency may bounce upwards after a big fall and encourage inexperienced traders to “try to grab the bottom”. The currency itself may have fallen due to a poor jobs report over the past few months. Will you buy something like that? Maybe not, this is why you need to know and understand what you’re buying and selling.
Currency trading is great because you can use leverage, and there are so many different currency pairs to trade. This doesn’t mean, however, that you need to swap everything. It’s better to pick some who don’t have a relationship and focus on it.
Just having a few will make it easy to keep up with the economic news for the countries involved, and you’ll be able to feel the rhythm of the currencies involved.
Once you’ve been trading with a small live account for a while and you have a feeling for what you’re doing, it’s okay to deposit more money and make your account bigger. Knowing what you’re doing boils down to getting rid of your bad habits and gaining control over your emotions. If you can do that, you can successfully trade forex.
Manage risk and manage your emotions hand in hand. When we feel emotional, greedy or scared, that’s when we make mistakes with risk, and that’s what causes failure. When you look at trading charts, you should only see potential, or see nothing; It shouldn’t be a matter of excitement.
If pulling a trigger on a trade feels emotional in any way, you should re-evaluate what you’re doing to trade.