How do I become a forex trader?
Becoming a professional trader takes time, it doesn’t happen overnight. There is no perfect strategy out there that people use to become successful professional traders, as many people believe. Rather, they develop their skills over time. One great mistake that beginners make is to believe all the information they come across when researching about trading.
They end up losing precious time applying ineffective strategies. Professional traders have gotten where they are by making losses, learning from their mistakes and verifying every strategy they come across to find out which one works and which one doesn’t. Verifying a strategy entails looking at various charts and determining whether it is profitable or not.
There are many successful traders out there who have mastered trading the likes of George Soros, Andrew Krieger, Stanley Druckenmiller, Warren Buffet …
They are proof that it is possible to create or increase wealth through trading. These people share characteristics such as being passionate and consistent, something many amateur traders lack. They have also invested a lot of time acquiring knowledge about this field and do not just rely on following the crowd or asking for guidelines from other traders. They also have the right psychology for trading. Trading in the live market can be a roller coaster of emotions for beginners and only those with the right mindset about wealth and money can succeed.
Another important thing that every new trader who wants to become a pro should realize is that a small deposit of $500 and less will not make them millionaires. What they should be concerned about when starting off is making consistent small wins over time and learning all they can about trading along the way.
Professional traders keep trading journals, which they refer to from time to time for the purpose of assessing their trading strategies and performance. Therefore, at first, you should not be concerned with becoming rich rather you should focus on mastering the game.
Here Are The Stages That Professional Traders Go Through To Learn To Trade;
Learn the Basics
Education is important if someone wants to develop a certain skill. Forex trading is not any different. If you want to become a professional trader, you should invest time and effort learning the basics of trading. When it comes to Forex, for instance, you should know what it entails from its history to how it works. You should also learn about risk management, trading hours, pip values and order types among other things. Once you have learned the introductory concepts, you should also learn about price action, which is the most basic strategy that other strategies are built on.
It is advisable to learn the basics instead of jumping straight into the trading field without some knowledge to draw from. There is no short cut to success and Forex is one place where this philosophy holds true. So do not sleep on your laurels and wait to make money on Forex, you have to do your homework, study, and research extensively. If it means taking an online course, do it because it will be worth it in the end.
Find Your Strategy And Stick To It
Professional traders will tell you that you cannot survive in the trading arena without a good strategy, one that you truly believe in. Basically, having a strategy means you know the possible market movements and how you are going to act. The strategy should be one that you have tested and proven that it works. The best strategy to use in Forex is the price action.
It will help you to master chart reading, which is crucial in Forex trading. Price action enables you to know when to enter a market and how to analyze the volatile market conditions. It consists of prices bars and candlesticks that help you analyze price action minute by minute, patterns, support, resistance and the swings. Price action analysis is subjective, and everyone has their own way of analyzing the patterns.
There are many other strategies available such as a positional trading, swing trading or scalping. The secret is to find the one that you like most and master it. Developing a strategy is a long process that requires a lot of patience. Do not give up along the way, just stay on course and you will be successful in the end. Over time, you will develop a trading plan that will help you trade like a pro and avoid trading with emotions.
Demos And Why They Are Important
A demo is an important tool for anyone who wants to learn to trade. However, you should not over trade on a demo. Your ultimate goal of trading with a demo account should be to eventually switch to a live account because you cannot make real money with a demo. If you want to make money at some point, you should have the courage to trade with a live account.
A demo is important because it will help you get the feel of trading in a real market. It will also help you know trading basics such as how to place a trade and stop-loss orders among other things that you cannot learn theoretically. It will help you overcome the anxiety of placing an order. One thing you should avoid when you want to become a successful trader is procrastinating, and a demo can help you deal with this issue.
Practicing is vital when it comes to trading. A demo is designed for this, and it will help you test out your strategies without the risk of losing any money. While practicing will not make you perfect, it will help you improve your performance. Losses are part and parcel of trading; the important thing is to ensure that the wins are more and greater than the losses.
One month is a reasonable period of trading with a demo account. Try not to spend too much time on a demo; you should not go beyond the third month.
When you move to a live account, avoid all the mistake new traders make which we highlighted in the previous article, and you will set yourself up for success.