How to Trade Forex for Beginners
Before you learn how to trade in forex using puts, calls, options, advanced indicators, etc. you need to learn the basics of trading. This may seem tiresome but most advanced traders will tell you that these four basic principles form a deep and solid foundation that goes beyond even the most advanced forex strategies. This article does not purport to be a magic cheat sheet to the inner workings of forex but rather a simple guide to gathering your thoughts.
How to Trade Forex: Due Diligence
Do not expect to read a few e-books, purchase a practice account, or forex robot and immediately make a few thousand dollars in the span of one day. Heck, forget about one week or even one month. Learning forex the right way starts with school. This does not mean going to an Ivy League university. In fact vocational college, night school, online classes, etc. can work. But you need to work hard to get the diploma. Next is start training, and reviewing to get your license. Of course, you can forego the license and formal schooling if you are okay dealing with a broker. But getting the proper background information is still essential.
How to Trade Forex: Find a Mentor
You do not need to Yoda or Gordon Gecko. All you need is an experienced trader to show you the ropes. Of course, online tutors/mentors are there for you but there is still no substitute for actual face-to-face interaction in the high-pressure environment of the forex floor. Bear in mind that you need to learn a realistic approach to trading and actual application of the theoretical knowledge you received in class.
How to Trade Forex: Practice then Dissect Forex Strategies
Education, training, and experience will immerse you in different trading strategies. This can range from basic, advanced, to downright gray area techniques in forex. The best traders go back to their strategies and analyze what works and what does not. After a few years of practice, you then learn to modify even advanced strategies for your very own purposes.
How to Trade Forex: Short term vs. Long Term
Regardless of what self help book you have read or online genius that approaches you “You can only go one way on a particular trade!” Choose between short-term swing and momentum trading or long term trends. Of course, you can switch or manage different types but you cannot have it both ways in a single strategy. With that said it is best to inculcate in you the fact that swing trading may seem more profitable with more action that has you on the edge off your seat every minute of every trade. However, there is still nothing that beats a well thought out long-term forex strategy that is designed to catch a trend as it happens and then keep your position for the long haul.
In Closing
Remember, you cannot win them all, but you can learn from your mistakes. The mark of a true trader is not the number of times they are correct but the fact that they never commit glaring mistakes and then repeat the same. And in order to do this you need to build a solid and deep foundation based on due diligence.
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