The Best Way to Learn Forex Trading - Best Website to Learn Forex Trading
The best way to learn Forex trading is to learn how to create a Trading plan. The forex plan is the tool that every trader will use to determine when to open trades & when to close trades and what strategy will be used to determine when to open and close trades.
In order to come up with the best forex plan a trader must learn how to go about doing the following.
A Trader Should Find the Best Strategy for Their Trading Style
To become successful in forex trading - traders need to come up with a plan that's suited for their style method and trading personality.
A trader should look to find a method that can identify the market trends early and allow the trader to open trades in the direction signal of the market trend. In forex trading the most reliable method that's proven to make profits most of the time is following the general market trend.
In forex trading once currencies start to move in a particular direction, the currencies will move in that direction for some time because the market trends have momentum and this trend momentum will mean a trend will continue to move in the direction of the trend for some time.
Once a trader chooses a trading strategy that will help them to identify trends and open trades in the direction of the market trend a trader can then use this strategy & write it down on their Plan.
Creating a Trading Plan
A plan is a set of rules and guidelines that help traders to organize and structure their trading in a particular way that's easy for a trader to follow when trading the online market.
The forex plan will have different sections which will specify different aspects of trading that the trader will follow when trading the market. The different sections of a plan are:
Chart Timeframe the Trader Will Be Using
The forex plan should specify which chart time frame a trader will be trading with. If one is a scalper then the plan will specify the 1 minute chart time frame, for day traders the chart time frame will specify the 5 minutes chart timeframe or 15 minutes chart time frame and for swing traders the 1 hour chart time frame.
Currency Pairs Traded
A plan should specify which currency pairs a trader will be trading. A trader should only trade those currencies that are best fitted to making profits when traded using the strategy that the trader is using.
Forex Trading System Rules
This system rules section will specify when a trader will open a buy or sell trade and when a trader will close a trade.
This rules section will determine the rules of the entry and exit based on the system that the trader is using. If a trader is using an indicator based system, then the rules will specify when to open a trade when the rules of an entry trade setup are met and when to close a trade when the rules of an exit setup are met.
Money Management Rules
A plan should specify the money management rules that a trader will follow when trading currencies. The forex money management rules will specify what percentage of account balance a trader will risk on each trade. A trader may decide to only risk up to 2% maximum on any one single trade.
Practice Forex Trading with Your Plan on a Demo Practice Account
After coming up with your plan you should then test it on a practice account before trading with it on a real account. By using the trading forex plan on a demo account a trader can learn how to trade with the plan on a practice environment and learn the required discipline that is needed to trade forex using this plan on the real currency exchange market.
Once a trader has tested the plan on a demo trading account and forex plan is profitable on the demo account - a trader can then open a real account & trade on this real account with this plan.
Keep a Journal of All Trades Opened
A trader should keep a trading forex journal of all trades that are generated by this plan. As a trader it is always good to keep a trading forex journal and write down all the trades that you open in this journal, write why you opened each trade, when you closed the trade & also the amount of profit or loss generated from that trade.
After a while you can then review all the trades you have opened - try and look at why the losing trades made losses and why the winning trades were successful and after that you can then try and do more of what makes you successful & less of what's making you to open losing trades and that way keep on improving on your strategy.
As a trader if you don't keep a trading journal you may continue making the same mistakes over and over again without even knowing it, but if you kept a journal & keep reviewing this journal from time to time then you give yourself a chance to identify the mistakes you make in forex trading from reviewing your forex journal periodically.
This way you can then increase the percentage of your winning trades. You can also increase your profits and reduce your risk per trade because by increasing the percentage of your winning trades and reducing your losing trades - your forex plan can then make more money and help you to become more successful in forex trading & more profitable.
