The forex market is a continually flowing river of financial opportunities. Each week the market presents opportunities for savvy trader to take advantage of in combination with using leverage to multiply their money. However, it is no easy to ask to trade the forex market with consistent success, this is reflected by the fact that the majority of traders give up, usually out of frustration from losing so much money.
So, as you learn forex trading, you must understand some basic truths that many novice traders either are unaware of or that they simply ignore. Some of the truths you must learn are; over-trading and over-leveraging are the two quickest ways to lose all your money, simple forex trading strategies are the best, elimination of emotional trading is necessary to succeed in forex, and learning from a professional trader and mentor is the ideal forex education scenario.
• Learn Forex Trading Without Committing These Two Errors:
Over-trading and over-leveraging one’s trading account are probably the two biggest and most committed trading mistakes. They are also the reasons why most traders end up blowing out their accounts and quitting all together. As you learn forex trading, you have to be very conscious and cautious of these two trading errors, they often sneak up on you without you really being aware you are making them. The most vulnerable time for traders to commit one or both of these mistakes is right after a trade closes out, whether it’s a winner or a loser.
As you learn forex trading, you must realize that each entry into the market is unique, and it cannot be influenced at all by your previous trade. It is often hard to tell if you are letting your previous trade(s) influence your current one, so the best remedy is to simply walk away from your trading station as soon as a trade closes out, walk away for at least 24 hours. Many amateur traders will jump right back in the market as soon as a trade closes out, either to try and “make back” money they just lost, or because they are on a euphoric high from hitting a winner or a series of winners. You should never force a trade where there isn’t one; you cannot control the market, but the market CAN control you if you let it, all you can do is control yourself.
• Learn to Be Emotion-free as You Learn Forex Trading
As you learn to trade forex it is very important to understand the impact of your own thoughts and emotions on your trading account. The more you treat the forex market like a casino; becoming addicted to being in a trade and getting a “high” from the feeling of greed and hope, the more money you will lose. This seems like pretty obvious common-sense advice, yet most traders end up trading emotionally, whether they realize it or not.
The best way to learn forex trading without becoming emotional is to become calm and calculating in every interaction you have with the market. If you pre-plan for all scenarios you might experience while trading the market, there will be no surprises, if there are no surprises then you will have nothing to become emotional about. Most traders simply do not have a trading plan and they don’t have trading journal, they trade in a very haphazard and unorganized way, thus opening their minds up to become emotional. As you learn forex trading, it is imperative that you understand the importance of creating a forex trading plan and a forex trading journal, keep both of these and you will be far ahead of the majority of other traders.
• Learn Forex Trading from a Professional
Many aspiring traders want to become professionals and learn forex trading good enough to make a full-time living at it. The problem these aspiring forex traders face is that they often do not learn forex trading from a trusted and experienced source. This source should be someone who is already a full-time professional trader, instead of someone who is simply out to sell you their forex trading “robot” or mechanical trading system.
The importance of learning to trade from someone who is actually already successful at trading cannot be over-emphasized. Just like you need to learn from a mentor or a professional in any other field when acquiring a new skill, you need to learn from a mentor and professional trader when you learn forex trading. Many beginning traders think they can teach themselves to trade successfully, while it is true that with enough time and effort you can teach yourself to trade, it is much cheaper, quicker and more effective to learn from a trusted professional trader.
• Learn Simple Forex Trading Strategies
When trading the forex market it is important that you do not over-complicate your trading strategy. As you learn forex trading, you need to make sure that you don’t fall prey to one of the many internet scammers out there who are trying to sell some trading software system or lagging indicator system. These trading strategies do nothing but over-complicate your charts and your mind to the point where you become confused and frustrated and start second-guessing yourself.
When you learn simple forex trading strategies you can see the market more clearly, and you can read the price movement easier and more effectively. It is very ironic that so many traders decide to over-lay indicators all over their charts, all this does is cover up the raw price action of the chart, and it is this price action that you are trying to interpret. It is analogous to trying to read a book with glasses on that are the wrong prescription and make everything all blurry. Yet, floods of newbie forex traders try to interpret numerous lagging indicators and trading robot signals, when they could just simply learn to analyze the price action setups that occur on a plain vanilla price chart.
So, as you learn forex trading, the best way to learn is from an experienced professional trader who trades using nothing more than price action analysis. By learning the method of price action trading from a trusted professional, you will obtain a perspective on how markets move and how they work that you did not possess before. This perspective is born from understanding how price action is somewhat like the “language” of the markets, once you learn to “speak” this language it will be like a whole world opening up before you that you did not previously know about. Check out this forex trading course to learn more about price action trading.