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Forex Course: A Quick Forex
Guide for Traders
In this Forex course we will review some steps you need to
take care before you venture into your trading journey. Most
traders venture into the Forex market with little or no
experience in the Forex market. This results in painful
experiences like loosing most of the risk capital, frustration
because it seemed so easy to make money, etc.
The first thing you need to realize is that, it is not easy to
make money. As every other endeavor in life, where important
rewards are to come after mastering it, you need to work hard.
You need to get very well educated and experienced before
having the possibility to receive important rewards on it. The
key on mastering the Forex market relies on commitment,
patience and discipline.
Ok, you have decided you are going to trade the Forex market,
you have seen several advertisings featuring how easy is to
make money in the Forex market. You might think this is your
opportunity to reach your financial freedom, right away, time
is money, why waiting any longer if you have the opportunity
to make money now. I know, I’ve been there, but you have a
chance now, I didn’t, no body told me what I am going to tell
you.
We, Forex traders, make transactions based on a set of rules.
These sets of rules are what we call a Trading System. Our
systems tell us the exact time where we need to get in the
market and out the market in order to make a profit (i.e. buy
low sell high.)
Creating a system is the first big step you need to take care
first. Why is this so important? Because you need to build a
system that suits your personality, otherwise you are going to
find hard to follow it, thus hard to profit from. A system can
be based on technical indicators or what we called a
mechanical system or based on experience and intuition or what
we call discretionary systems. I highly recommend using and
trying first a mechanical system, because discretionary
systems are dangerous during the early stages of a Forex
trader (can lead to indiscipline.) With experience, on later
stages, you will find out which signals work better and which
ones to avoid.
The next step in this Forex course is to try your system on a
demo account. Most Forex brokers offer a demo account, an
account with virtual money. This is an excellent choice to
test your trading system as there is no money at risk. In this
step you will figure out if the strategy works for you. If you
feel comfortable trading it, then it is most likely to produce
good results. How much time should you stay in this step? It
varies, but you shouldn’t go one step further until your
system gets consistent profitable results over a period of
time. It can take many months, but remember, you need to be
patient.
You must be honest to yourself; you need to take every single
signal generated by your system, not only the signals you
thought were going to work, otherwise, you are going to have
problems in the next two steps.
Ok, by know you had consistent profitable results on your demo
account. You might think its time to go full. Nope, nope,
nope. There is a big difference between trading a demo and a
real account. The most important difference lies on emotions
(fear, greed, anger, etc.) These are psychological barriers
that affect every single decision made by traders regardless
of what he/she is trading (stocks, bonds, Forex, futures,
grains, etc.) These emotional factors, in my opinion, are the
most determinant factor that separates profitable traders from
the others.
The next step in this Forex course is specially designed to
deal with emotions and to confirm the results obtained in the
prior step (consistent results in a demo account.) At this
step you need to trade in a real account with limited funds.
Some brokers offer fractional lot trading. Meaning you are
able to trade any desired amount (even cents.) The important
thing here is that these emotions we’ve been talking about are
present only when there is real money at risk. At this stage,
you are going to see if you are really comfortable trading
your system and if you are able to trade with such system,
remember different systems produce different emotions. If you
are able to produce similar results than those obtained in a
demo account, then ready for the next step. If you didn’t,
then you might need to create another system, there is chance
your system never fit you. If you created consistent
profitable results on this stage, you have a chance to produce
similar results in the next one, on the other hand, if you
didn’t produce good results in this stage, you will not be
able to make on the next stage. Remember, you need to do
things right, and be honest to yourself.
The last stage is trading in a real account with sufficient
funds. If you are at this stage, and have passed successfully
every prior stage, then you have a chance to make it, go ahead
and try it, you need to be confident in yourself and in your
system, your strategy have already produced consistent
profitable results, there are reasons to believe you are going
to make it. Very few traders fail at this stage (if passed
successfully prior stages.)
Trading successfully is no easy task, it requires a lot of
work, patience, discipline, and education. By completing the
steps outlined in this Forex course, you have a chance to
produce profitable results. I repeat it again, you need to be
honest to yourself about the results obtained in every stage.
Some times you might need expert guidance regarding your
system development strategies.
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