Ready, Steady, Trade: Becoming an
Experienced Forex Trader
Doing forex trading regularly and smartly can help you fill the pockets and procure decent savings for the future. Yet, the keyword here is ‘smartly’, and in the world of foreign exchange, ‘smart’ has its own meaning.
To be financially successful on the market, you need to become a serious forex trader. A trader can be a person or a legal entity that trades in some assets or instruments. In our case, a trader is you, a person who trades in forex with the goal of gaining profit due to rates difference. This future difference can be predicted based on general information about the world economy and specific technical data. But trading requires more than learning about leverage, opening, and closing positions, and doing swing reading. To be a forex trader, you need to develop a special state of mind, a new way of thinking, and approaching the task.
1. Locate a reliable broker
2. Learn about the instruments of the forex market
No one can swim without learning to swim, and the same applies to trading. This occupation requires you to know basics about fundamental and technical analysis, popular trading strategies and principles, and the use of risk-reducing tools. Do your homework before you invest any money.
3. Develop your plan and match your trading strategy with this plan
You cannot just buy and sell forex lots randomly. You need a plan, i.e. what and how you want to achieve, and what steps will take you there. When you know where you are going, you can pick the trading strategy and instruments that match your plan best. In times of market hype or panic, it is the plan that will help you stay sober-minded and calm.
4. Have the plan B, that is, ways to manage risks
Trading is about dealing with risk regularly, and you need to have tools to counter this risk. Losses are unavoidable, and you have to accept this idea, but they can be minimized and become only a small hitch on your way. Stop-loss tool, ability to read trends, and refrain from decisions made in FOMO will save you in uncertain times.
5. Be the master of your emotions
Taming your greed and FOMO are your key tasks in the realm of emotions management. Many a trader lost everything in the first week of trading because of these two irrational urges. Learn to discern them in your attitude while they are still small and wipe them away for good. If you have the plan and the chosen strategy, stick to them, and your emotions will settle down soon.
6. Do some demo trading first
Learning theory is half of the job, and practicing it safely is another one. Forex brokers offer a valuable opportunity to do demo trading, so use it. You do not have to deposit anything, so you will not make any money (or lose it, for that matter). The rest is the same as if you were trading with real money. Markets, positions, indices, and outcomes represent the real trading process. So when you master a demo version, you will feel assured in real trading.
7. Start small and keep your eyes on the prize
No, you won’t gain tons of cash overnight, don’t entertain such hopes. You have to start with small investments, see if your strategy works and you read the charts accurately. Then, after some time, you can risk bigger sums. Remember what you want to achieve in the long run, and don’t let fleeting emotions set you off track.
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