The Best Way to Begin Learning Forex Trading
Forex trading provides traders the opportunity to make money trading the largest financial market in the world. The best way for traders to start learning forex trading is.
First thing is to find an online forex education website like this where you will find all the courses that traders need to learn before they start trading the market. These lessons are all listed in the learn forex courses section of this site.
By reading these tutorials a trader will learn more about how the online forex market works. A trader can also learn about currencies, how to trade with forex charts, how to place forex trades, the best hours to trade forex when the market is most active, how to come with a trading strategy as well as a trading plan to trade with.
The next thing to do is to open a demo trade account, this is a practice trading account that traders can open practice how to trade the market using virtual funds. For a demo trade account a trader does not need to deposit any money, the money traded on this trading account is virtual money.
With a practice account a trader can gain more experience of trading the online currency market. On the demo account a trader can learn how to navigate the software oftenly referred to as a trading platform, a trader can also learn how to place orders, how to trade currencies using forex charts, and how to place technical indicators on charts and how to do analysis of the currency market moves.
After this a trader should create a trading plan. The plan will be a set of rules that a trader will use to organize their trading. If you want to be successful when trading the online currency market then you must create your own forex trading plan. The forex trading plan is one of the lessons covered within our learn forex trading lessons section.
The plan will include rules that will determine when a trader will open and close trades. A trader will only open a buy or sell trade when the entry rules of their strategy are met and a trading signal is generated. A trader will then hold on to their trader until the rules of exiting the trade are met. A trader can close their trade once their take profit level is reached or a trader can close a trade if the market moves in the opposite direction of their trade by a specified number of pips.
A trader must follow these rules at all times and must not begin making trades based on their emotions or based on the current market moves after when they open their trades. For examples a trader must close their trades when the take profit is reached, a trader should not get greedy & keep wanting more profits from this particular trade. A trader should close the trade at the specified take profit level and look for another setup if they want to open another trade. Likewise if the market starts to move against the position of the trader, the trader should close the losing trade at their specified stop loss level & not keep holding to the trade hoping that the trade will reverse and therefore reversing the loss and hoping that the trade will eventually turn a profit. All these emotional decisions means that a trader is does not have the required discipline when trading currencies to follow the rules of their plan.
Traders should learn that they can't control market movements but they can control their decisions and therefore the plan will help them to organize their trading and this way they can make trade decisions early enough when the factors are within their control & avoid waiting long enough only to make decision when the market conditions are not in their favor.
After coming up with a trading plan a trader should continue practice trading with their plan on their demo trading account. Beginners will learn more about how to execute trades using their plan, traders will also gain experience of how to spot trends & learn how to trade these trends in a way that will generate profits for them.
A trader should also keep a trading journal that will record all their trades. Journal will help the trader to review their trades after a while and by reviewing their winning as well as losing traders can learn how to improve their plan & become more profitable when trading currencies. After a trader has practiced long enough & the trader is making profits on their account the trader should then open a live account and begin trading the real market.
At this point a trader should open a well capitalized account & begin currencies. For traders who want to trade micro lots they should open an account with at least $1,000. For traders who want to trade mini lots they should open an account with at least $10,000 and for traders who want to trade standard lots they should open an account with at least $100,000.
By this time a trader will have learned how to manage the account balance which they are trading with & therefore at this point traders can be able to trade with a well capitalized account & be able to manage the money in their account using the money management rules that they will have learnt and practiced when they were trading with a practice account.
A trader who has learnt money management rules will know what trades they should open the lot size they should use to open their traders. Traders should never risk more that 2% of their account equity on any one single trade. Traders should specify these rules and stick to these rules when trading so as to manage their account balance prudently & so that they can protect the profits that they will make from trading in the long run.
Traders should also learn not to use a lot of leverage when opening trades. Traders should use forex money management rules to determine what leverage they will be using when opening their trades.
Summary
By using this approach traders will learn how to begin currencies in an organized manner that will improve their chances of being successful when trading the online currency market. Traders will have learnt how to trade the currency pairs market trends and they will have learned how to analyze the market using analysis and how to place trades after generating signals, which currency pairs are best to trade based on their strategy & also traders will have learnt how to manage risks and how to avoid emotions such as fear and greed when trading. This approach will prove to be the best approach that traders can follow when they want to start learning how to trade the online forex market.
