Forex Trading Success In 5 Steps
One of the most frequently asked questions by beginners is how exactly is the right way to start forex trading . Lots of people who start trading are only armed with trading signal subscriptions, or even pay dearly for training / workshops that discuss trading strategies even though they don’t really know forex. Even the term “lot” or “pip” may not be understood by them.
Traders who start trading without sufficient knowledge are like people who are desperate to jump into a lake even though he can’t swim. The result? Death. Yes, indeed there are some survivors. Some of you know , only a few . That was because they were lucky to be able to meet people who swiftly “threw buoys” at them. The less fortunate? Through.
You need to know that trading is not just glaring at charts and mixing various indicators. Trading is a skill that must be consistently honed every time you make a transaction.
Oh yes, I need to remind you that there is no such thing as a “ holy grail “ in trading. For those of you who are new to the term, “holy grail” is a term used to refer to a trading system or strategy that guarantees its accuracy. In other words: loss is impossible. Again: nothing like that!
So, before you get stuck in an endless search for the “holy grail”, allow me to share a little experience for those of you who just want to start forex trading.
Learn the basics of trading first
There is no one who wears a black belt overnight. He certainly had to start from a white belt, study horses, kihon, kata, kumite and so on. It takes a short process and time to at least become a black belt karateka.
Trading too. Don’t dream of being a great trader just because you have followed a day or two of workshops without having a basic knowledge of trading. At least you have to know what lots are, contract size , leverage , margin, risk management and trading plan .You must first understand what are the trends, support and resistance. Then you deserve to learn more complex trading techniques.
Practice recognizing patterns
Have you ever seen how table tennis athletes easily serve and play balls that move so fast? They don’t get that skill in just one day. It takes a lot of practice and pay attention to the direction of movement of the ball.
In (technical) analysis there is the concept of “history repeats itself”. History always repeats. In this context the iterative is actually a pattern, be it the pattern of price movements or patterns of technical indicators. By recognizing certain patterns, you will be able to estimate where the price will move by referring to “behavior” from time to time.
Develop a trading plan
This is the stage that will determine what kind of trader you will become. At this stage you will design a strategy that you will use and of course to be able to carry out this stage you must have successfully undergone the previous two stages.
At this stage you can experiment with a number of different technical indicators, several different currency pairs and later you will find a strategy that suits your personality as a trader.
You may try to adopt another trader strategy that has been successful, but you must remember that one strategy that is successfully used by others is not necessarily successful in your hands. This is because one good strategy requirement – as I mentioned in the previous paragraph – is a strategy that suits your personality.
Try the strategy on the demo account
Yes … yes … there are traders who skip the demo stage and immediately trade with a live account because they want to immediately get results from trading. Indeed there are also those who can succeed without going through demonstrations. There is.Not all.
Demo allows you to test the profitability of your trading strategy .Not only that, demo can also sharpen your skills .
It is at this stage that you will be able to learn where your strengths are and – more importantly – your weaknesses and your trading strategy. If you have not been able to profit consistently on a demo account, I do not recommend hurrying to use a live account.
Consistent profit on demo accounts, then then use real money .
This is the most important and the most difficult stage to do. At this stage you have to test whether the strategy that you use really can produce consistent or not profit. If not, then it’s time you make improvements to the strategy.
In doing your evaluation must be fair. There are times when the error lies not in your trading strategy but in the indiscipline of you running a trading plan. Sometimes people don’t want to admit that he made a mistake and this is fatal for a trader.
Forex trading is not the way to get rich suddenly. Even not computer games that you can win by typing in some cheat codes ( cheat code ).Trading is business and like business generally takes time, effort and – of course – enough capital to “win the game”.