Many people are jumping into the Forex market as traders today. However, most fail because they envision quick money and don’t take teh time to learn what they need to first. They would have much more success if they did.
Here, I’ll discuss things to avoid if you want to be successful as a trader, and what you can do to increase your chances of success.
First, the obstacles. The two major obstacles to successful Forex trading, psychologically speaking, are fear and greed. If you operate from a base of fear and greed, you are going to fail time and again in the Forex market.
When you tradein Forex, be aware that you’ll lose sometimes, as all do. However, if you take care and do your trades with careful calculation and caution, you’re likely going to have more wins than not. This should give you an overall profit when you trade in Forex. However, if you let fear and greed run you and your trades, the opposite will also be the result. You’re going to lose more than you win.
So, let’s talk about fear and greed as obstacles for a minute. When you begin to trade in Forex (also known as “foreign exchange”), you’re going to have a lot of learning to do first.
Therefore, if you go in with the mindset that you want to make a huge killing and you want to do it right away, stop. You’ll fail. That’s all. You won’t succeed; you’ll fail and you’ll be sorry. So don’t do it that way. Here’s what you should do:
First, learn everything you can about Forex trading. Research Forex brokerage firms and choose one with a good reputation. Most good Forex firms have something called “demo trading” or something similar. When you demo trade, you trade with “fake” currency until you’ve learned all you need to know about Forex trading. Then and only then should you trade with real money.
Let’s say that again. NEVER trade until you’ve had a least a month or two under your belt doing demo trades. Learn everything you need to know about the different kinds of orders you can place, when to place them, how to place them, and so on. Learn how to properly analyze data and charts so that you know when you should get in and get out of trades.
Second, get as much practice as you can. When you think you’ve gotten enough, practice some more. DON’T start trading with real money until you know what you’re doing. Most learn how to read trends and charts by doing two different types of analysis, technical and fundamental.
Some people chose one or the other specifically and do just that; if you’re truly a successful trader, though, you’re going to use both methods to analyze data and decide how you’ll move on a trade. Keep practicing until you are very, very, very comfortable doing trades and your pretend “successes” far outnumber your occasional “failures.”
Third, when you’re ready to start trading with your own money, take it easy. Many Forex traders will let you trade with as little as $10. Your gains are going to be small that level, true, but your losses will be, too. This is where you should stay until you really have experience enough to do larger trades.
Fourth, when you’re ready to start trading with larger amounts, NEVER trade with more than you can afford to lose. Don’t trade with money meant for your mortgage, food, or with anything that you can’t spare.
Fifth and finally, recognize that with some care and prudence, you can make money through Forex trading. You should also recognize that you are NEVER going to win on every trade. You will lose some.
That said, if you practice and learn your way around Forex trading so that you develop your own system that works, you’ll likely be successful. Follow your system and don’t let greed or fear drive you. This should make you profitable over the long-term.
In summary, take note that Forex trading is not a guaranteed income maker. You’re taking a chance with your money in hopes that you will actually make money. However, this can be risky, just as other types of trading are.
Many people make very decent money from this, but they are the ones who are prudent and who take care to study the market carefully before they make a move. If you do this, too, and you never risk more than you can lose, you should be able to learn to be successful at Forex trading as so many have.
Author: Rosalina Mavaega