Us FX traders are naturally impatient individuals. We want to engage with the forex market, execute our market orders and hopefully bank profit as soon as possible.
This enthusiasm must be controlled and channelled constructively. We must develop the patience to succeed in the retail trading complex. If we don’t, we can self-sabotage our potential before we’ve had the chance to build our skills and acquire the knowledge required to succeed.
Part of our self-discovery involves deciding what securities to trade, how and when. You shouldn’t open a forex trading account, start buying and selling FX currency pairs within minutes and hope to be profitable. That kind of approach is a sure-fire way to guarantee you’ll be part of the 75% traders who lose.
Our industry is not a betting shop, and you’re not betting on the result of a sports match, you’re engaging with a highly developed and sophisticated financial marketplace. If you take some care and invest the time at the beginning of the journey, you’ll give yourself the best chance to survive and then thrive and you lessen your chance of becoming part of the 75%.
Take time to rate the brokers you’re considering trading through
Once you’ve decided to trade, open a demo account first, this will give you an overview of the industry and allow you to evaluate the broker’s proficiency.
The broker must have minimum standards to deserve your business. They must operate an NDD, STP, ECN trading model (non-dealing desk, straight-through processing and electronic communication network).
Putting this transparent and ethical framework in place means you’re choosing a broker on your side and your side of the bets. NDD, STP, ECN forex brokers don’t trade against you, and they want you to win.
Set yourself realistic goals and milestones
Patience is a virtue when trading markets. You can’t rush your trading education, and there is no two-week crash course available in the FX trading industry that will leave you confident and competent enough to trade forex efficiently and effectively.
When you decide online trading is an industry you want to become involved with, it’s best to set yourself some timescales and milestones to reach. Let’s consider listing six critical achievements you can tick off to check your progress.
- You’ve tested your broker
- You’re familiar with MT4 or the alternative platform provided
- You have developed a trading method/strategy/edge
- You are profitable in demo mode
- You open you first live trading account
- You are profitable when live trading
- As mentioned previously, you must subject your broker to a rigorous test before even opening a demo account. Compare it to depositing your money with a bank, would you put your salary or savings in an unreliable bank? You don’t have to take a risk, and there are good brokers out there who comply with the model we’ve mentioned who offer MT4, and who are licensed by CySec and the FCA.
- Become familiar and competent with MT4 or the alternative. Do not execute live trades until you understand how the platform works, what leverage and margin are, and how to place technical indicators on the trading platform. Shock stories concerning traders who lose a significant part of their account because they’re unfamiliar with the complete process are all too familiar.
- Develop a trading method and strategy, resulting in a trading edge with positive expectancy. Explore the range of technical indicators on offer, match technical analysis with fundamental analysis.
- Test out your strategy on the demo platform your broker offers. Find out if you can back-test the system on, for example, MT4. Once you’re profitable in demo account mode, you’re ready to go live.
- Open your first live trading account. Use a modest sum that won’t negatively affect your family life if you lose a proportion of the funds. Do not use sums set aside for the day-to-day expenses, which will cause unnecessary stress leading you to make poor decisions.
- You are now competent, confident, and consistently profitable. You have a clear understanding of the retail trading industry. You manage risk appropriately and find the pastime exciting, enjoyable, but stress-free.
The process listed above doesn’t have to take an age. Depending on the time you have spare to dedicate to your part-time investment hobby, you could complete the checklist inside months. If you patiently take your time over the short term; the long-term benefits could be outstanding.
« All attention on the Federal Reserve as Jerome Powell delivers his first statement under Biden’s administration Germany’s business confidence falls to a 6-month low, DAX slumps, NASDAQ prints record high, USD rises »