A beginning forex trader in today’s age faces many challenges that didn’t exist 20 years ago when the internet wasn’t as prevalent as it now is. There is a virtual sea of information on the internet for any topic you can think of, and forex trading is no exception. In fact, since trading isn’t something typically taught in schools and universities, most traders feel as if they are on their own as they begin their journey of learning how to trade.
Whilst the internet is an amazing learning tool, full of information and data, it also has its limitations and downsides. The main problem a beginning forex trader faces today, is as they sit down in front of their computer to begin their journey, they are faced with countless different options for learning how to trade and there is really no one there to guide them on their journey and show them the proper path. It can become overwhelming and frustrating, to say the least.
This is one of the main reasons I have dedicated myself to helping beginning currency traders learn how to trade and to teach them about the many pitfalls they need to avoid so that they don’t get started down the wrong path at the very start of their trading journey….
What do you need to know as a beginning trader?
I know how it feels to be a beginning trader because I was once one myself. I know the feeling of not knowing where to start or who to ask for help. As I mentioned in the introduction, this is partially why I have dedicated my life to helping other traders learn to trade properly and learn the proper path to take.
The primary thing you need to understand as you begin your trading journey is that you NEED to learn from someone more experienced than yourself, someone that is already an example of what you hope to become; a successful trader. This may seem obvious to you but it never ceases to amaze me just how many people think they can learn to trade entirely by themselves with no help from anyone else. It’s analogous to believing you can successfully perform brain surgery or fly a commercial airliner without training and instruction from someone who is already qualified and successful in those fields. Just like those professions, trading requires the help of an experienced professional mentor / trader who has taken the journey you are embarking on and found the right ‘formula’ to success.
Some of the other key things to keep in mind as you begin your trading journey are:
– Find an experienced trading educator / mentor to learn from and stick with their method, don’t waffle back and forth between multiple methods. You cannot become successful at anything in life if you don’t stick with it and give it the time and energy it requires.
– Understand that there is no ‘Holy Grail’ or magic trading system that is going to give you never-ending winning trades. Trading is about learning to take advantage of probabilities in the market, not certainties.
– No matter what you do or what systems / method you end up learning, the one undeniable fact of trading is that you will have to learn how to read the raw price action of the charts if you hope to become a successful trader. Price action is the language of the market and if you can’t read it, interpret it and trade from it, you will never make money as a trader.
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– Patience and discipline are going to be your new best friends if you hope to make money consistently in the market. If you don’t learn to love being patient and disciplined in your trading, you will never make money.
What are some common pitfalls for beginning forex traders?
Now, as you begin your trading journey, there are a number of pitfalls / traps that you will definitely want to try and avoid. These are things I wish someone had told me about when I first started. But, luckily for you, I am here to share my experience and knowledge that I have gained through over 15 years of trial and error and figuring out what works and what doesn’t as a trader….
Things beginning traders should avoid….
– Not getting a proper trading education – you would not try to become a professional lawyer, accountant, doctor, etc. without a proper education nor should you try to become a professional trader without one. Learn from a professional trader who is ‘been there and done that’ already. It will significantly shorten your learning curve and save you A LOT of time and money in the end.
– Trading with real money before you’re ready – don’t go risking real money in the market until you have learned a solid trading strategy, ideally a price action based strategy, and you thoroughly understand it and have had some success trading it on demo.
Listening to everyone’s opinions – you need to focus on one strategy and one mentor when learning how to trade. There will be many, many opinions out there, but if you listen to them all you will get distracted and over-loaded and that will not help you trade profitably. Focus on one strategy and master it, then trust yourself and tune everyone else out.
– Trading too frequently – once you do start trading real money you need to be extremely careful you don’t start over trading. Over trading is when you trade too frequently and it means you aren’t being disciplined or patient, it will result in a lot of unnecessary losses.
– Not managing risk – you should be far more concerned about risk than reward as you trade. If you do not control your risk to contain it under a dollar amount you are comfortable with potentially losing per trade, you won’t be around very long in the market.
I hope this article has given you some insight and guidance into the best way to get started on your trading journey. I know that it can seem like you are lost in a dense forest of contradicting forex trading information, strategies, systems etc. But, if you follow the points I’ve discussed here and learn a simple yet highly-effective trading method that is based on the raw price action of the market, you will be on the right path. Don’t get discouraged, remember, there is always someone who has walked in your shoes and found the path to trading success, find them and learn as much as you can from them, because that is the fastest way to your own trading success.
This article was written by Nial Fuller. Nial is a highly regarded professional trader and author. He is the founder of Learn To Trade The Market, the worlds foremost trading education resource. To learn more, visit www.LearnToTradeTheMarket.com