.1 Educate Yourself About Trading.
A lot of people will hear about how they can easily make money trading. Either the Futures Markets or the Forex Markets. So because they lack the experience of a seasoned professional trader. They jump right in without learning the ropes first.
Some do it out of desperation to make money. And some do it because they hate their job. By doing so they have no clue what they are getting into. If you just start trading live without any know how. Or a trading plan, you are looking for trouble. In fact, you might as well head to Las Vegas and play Black Jack.
Because you will be doomed to failure right from the start. And, because a lot of traders convince themselves that trading is not gambling. Because they say they are using a trading strategy. Just how could it be a form of gambling. Right? Wrong!
Trust me I have been there and done this. And I know how easily you can lose money trading. This is why you need to educate yourself first. This way you stand a much better chance at success then if you just jump right in without learning how to begin with.
.2 Invest In A Trading System Or Create One Yourself.
The best investment you could ever do is to invest in your journey to learn how to be a professional trader. By either trying a system from another professional trader. Or by searching on google to read about trading systems on the internet.
Why jump in blind with no clue whatsoever about trading when you can self teach yourself how to do it. Or better yet. Take a short cut and trade another professional traders trading strategy.
.3 Study Action Movement Of The Currency You Are Trading!
Right now you can easily start by looking at all kinds of trading charts. Meta Trader 4 or Meta Trader 5 is the most commonly used trading platform among Forex Traders. This is where you will find all kinds of currency pair charts to learn from.
I will be frank here. Learning the price movement of trading charts is not something you can learn just like that. It take hundreds of endless hours of study to accomplish this. I myself have been studying charts for 15 years now. And til this day I still find new patterns to learn from. And so will you once you start to study them.
.4 Practice Your System On A Demo First.
Before you ever do any “live” trading. You must become familiar with the trading system and trading platform first. You not only need to learn how to trade a system. But you need to learn how to place your trades on the platform first.
This alone could cost you so much because you don’t know how to place the correct orders on a trading platform like Meta Trader 4. They are many different order types but I will just list the 3 that I use.
Sell/Buy By Market:
This is where you click on 1 button. To either buy or sell at the current market price.
Buy stop orders are when you want to buy above the current market price.
Sell stop orders are when you want to sell below the current market price.
Buy/Sell Limit Orders:
Buy limit orders are when you want to buy below the current market price.
Sell limit orders are when you want to sell above the current market price.
.5 Once You Are Confident – Start To Trade.
Once you are confident that your trading system will give you a greater win rate. Then. And only then you should consider to start trading live. You see, you need to learn how to setup your trading system on your charts. But you also need to learn how to place your own trade orders, too…
But there is one thing we forgot. You need to know how much money you will need to risk on each trade so you don’t blow through all your trading capitol. Everything I am writing here you can learn inside my blog. It’s all there just up to you to take the time to read it is all.
.6 Always Use A Solid Money Management System.
All the pro gurus say you must never ever risk any more than 2% of your trading capitol on any 1 or series of open trades. Some say less. Like 1%. I say it’s totally up to you what you want to risk whether it’s 1% or 10%.
Most trader will never list to the 1 or 2% rule. They will always risk much more like 20% or higher. The ones who have 80% or more at risk are the ones who will blow up their trading account a lot sooner than the lower risk traders. I am not. And I will repeat. NOT! A Financial Adviser so I can’t tell you or even suggest to you what to risk.
It only makes good money management sense that the more you risk. The more chance you will lose because of “Fear!” and “Greed!” So try to play it safe. And at first, don’t risk much on any 1 given trade.
Let me put it to you this way. If you can’t sleep at night then you are risking too much capitol on your trades.
.7 Plan The Trade – Then Trade The Plan.
This is so important it isn’t funny! Before you even think about risking thin dime in the Forex Markets. You need to plan the trade – then trade the plan. Why? With no trading plan you are doomed to failure from the get go!
There are a lot of people who can do the first part. [Plan The Trade.] But they can’t seem to stick to the trade plan. They see the setup which is the plan but fear or greed gets in the way and they close there trade with either a loss or a very small profit. When they could have reaped the huge reward if they only would have stuck to the trading plan.