If you want to learn how to make money trading the Forex market, you will have to have an open mind and throw away all your preconceived ideas about trading and what it takes to be a profitable Forex trader. It is a commonly accepted statistic that something like 90% of traders fail to make money in the markets over the long-run, there are many reasons for this, but most of them boil down to having the wrong mindset when interacting with the market. It is the mindset of a trader that determines whether or not they make money in the market, and how much money they make. Most traders inhibit their own success because they do not know how to develop the proper trading mindset, or they simply ignore the facts of what successful Forex trading is all about.
Trade only with money you can truly afford to lose
It is very important that you understand the risks involved in forex trading as you learn how to trade. Many people get interested in forex trading and start trading the market using money they really cannot afford to lose, and this is a HUGE first mistake that many traders make. Perhaps the biggest thing you need to understand as part of understanding the risks in trading is that you should only trade with money you can afford to lose. Don’t lie to yourself about this…if you can’t afford to lose the money in your trading account then don’t risk it; demo trade until you have some money you can truly lose and be emotionally and financially OK.
Money you can “afford to lose” is truly disposable capital, this means it is money that you can lose and still be able to pay your bills and maintain your current lifestyle without having to use credit. Once you start trading with money that you should be using to pay bills or for other necessities, you become too emotionally attached to it, this causes you to become overly-attached to every trade you take and thus increases the chances of committing emotional trading errors. The only way you can truly learn to trade objectively and stress-free is by making sure you only fund your trading account with 100% disposable capital, meaning money you wouldn’t mind losing and that you won’t lose any sleep over having at risk.
Master your own emotions first
Arguably the single most important factor to making money in the Forex market is mastering your own emotions. This means that you are in conscious control of your interactions with the market at all times, never acting on impulse but instead always acting on logic and commonsense thinking patterns. Most traders blow up their trading accounts by giving into their emotions, the biggest reason they do this is because they don’t pre-define their trading strategy, meaning, they don’t have a comprehensive forex trading plan. When you pre-defined your interactions with the forex market there is no room for emotional trading errors to creep in because you have pre-planned everything when you were thinking objectively, calmly, and logically. If you can actually stick to your pre-defined trading plan you will be operating off discipline and logic instead of emotion and impulse, and this will put you far ahead of 90% of the other traders you are competing with. So, if you want to know how to make money forex trading, you must first know how to master your emotions, and this is done most effectively and easily by constructing a comprehensive forex trading plan.
Master one effective trading strategy
Many traders become inundated with trading information; they confuse themselves by over-analyzing everything and trying to understand too many market variables at one time. To really learn how to make money forex trading, you must first understand that the actual technical trading strategy you use to make your trading decisions off of does not have to be complicated, expensive, or consist of numerous confusing and contradictory lagging indicators. Many Forex traders fall prey to the trap of complicated sounding and looking trading systems that are nothing more than a ploy for some internet marketer to make money. The bottom line is that indicators, trading software programs, and other such over-hyped trading systems are simply unnecessary and usually do not work nearly as good as they claim, if at all.
The key to learning how to make money trading Forex, is to learn simple trading strategies that have been around for years; price action trading is one example. Learning to trade the market with simple price action setups can drastically simplify and improve your trading, in some cases this can happen almost overnight. All you need to do is find one price action trading setup that you like the most and learn to master it, make it your own, dominate it, once you master it and are making consistent money from it each month, then you can add another price action setup to your trading toolbox. This strategy of learning to master one price action setup at a time is the quickest and most effective route to achieving master of price action trading.
Forex Trading Education
The most efficient and effective way to make sure you fully understand how to make money Forex trading is to get a high quality forex trading education. By learning to trade forex from a professional trader and mentor you can be sure that you are learning effective strategies that will help you make money in the market. Many beginning traders get confused and lost as they try to learn how to trade because there is so much inaccurate information about what it takes to become a successful Forex trader and which trading strategies are worth pursuing and which ones are a waste of time and money. The best way to avoid all this headache and confusion is to learn how to trade from someone who is already making money trading the Forex market. Learning from a Forex trading mentor like Nial Fuller is your quickest route to learning how to make money trading the market, check out his forex trading course for more information.