Learning Forex trading and becoming a Forex trader can be a daunting task. In the beginning, trading terminology can be confusing, family may not be supportive and available trading funds may be tight. To make your Forex trading journey a little easier, we have created 10 simple steps to profitable Forex trading...
Step #1 - Learn as much as you can, for free!
The internet has allowed so many people to learn so much from the comfort of their own homes. Forex trading is no different. There are countless Forex educational websites, blogs and YouTube channels that will teach you the basics of Forex trading. These resources are usually very detailed and are for free.
As a new trader, we strong suggest that you make the most of the free Forex content online and start learning how to trade in your spare time. There is no need to pay someone to teach you the basics of Forex trading and technical analysis.
Check-out our free Forex trading courses page for a list of recommend Forex trading courses. We also offer our very own Forex 101 trading course.
Step #2 - Follow Forex traders who are already successful
There are many professional and profitable traders who write blogs and post videos to YouTube. Following these Forex traders can provide great insights into Forex trading and how the Forex markets work. These Forex traders can also be a source of inspiration and extra motivation.
Below is a list of some of the most popular and 'liked' Forex traders on YouTube...
Below is a list of some of the most popular Forex trader blogs...
Step #3 - Open a Forex demo account and start practising
As you spend time speaking with other Forex traders and learning about Forex trading, you will come to realise that there is a lot of criticism and negative reviews about most Forex brokers. One of the good things about Forex brokers though is that most Forex brokers offer free demo/paper trading accounts. Meaning that you can place trades and follow the actual market but deal in virtual/fake funds instead of risking your own. This is a great learning opportunity and it's for free.
We strongly suggest that you open a free Forex trading account and start practising. Below are 3 brokers that offer unlimited (no expiry) demo accounts...
IC Markets (based in Australia, take clients internationally) - click here
Darwinex (based in the UK, take clients internationally) - click here
Oanda (based in the US, take US clients) - click here
Step #4 - Take regular breaks from trading
In the beginning, Forex trading is very exciting and can provide a rush of adrenaline. It does not take long before reading charts can feel tedious and losing trades becomes discouraging though. When you start to feel down about trading or when studying charts is taking over your life, it is time to have a break. Walk the dog, go on holiday, read a book, watch a film... Whatever you need to do to unwind, do it. The markets will always be around and there will always be opportunities to make money. Don't get your life out of balance, take regular breaks from Forex trading and enjoy something else.
Step #5 - Discover what sort trader you are
Most wannabe Forex traders will say that they are a scalper. Unfortunately though, most wannabe Forex traders do not have the emotional capabilities to become full-time Forex scalpers. The lure of quick profits and trading excitement mesmerises them but the reality can be very different. After spending quality time on a demo account (and perhaps trading a very small live account), you will soon recognize your emotional strengths and weaknesses.
You will need to discover if you are most suited to scalping, day trading or swing trading. You will also need to decide whether you will trade using technical analysis, fundamental analysis or a bit of both.
Step #6 - Develop a Forex trading strategy to give you an edge
You will not be a long-term profitable Forex trader if you do not have an edge. Forex trading is a numbers game. It's all about putting chance in your favour. Developing and following a well-thought and back-tested trading strategy is a key to Forex trading success.
Learn our basic Forex trading strategies on our Forex trading strategies page.
Step #7 - Consider paying for a Forex mentor
Even though there is so much you can learn for free, most traders need a bit of help, support and guidance. In all industries, it makes logical sense to learn from those who have the relevant knowledge and experience. If you want to learn accounting, it's best to learn from an accountant. If you want to become a successful landlord, it's best to learn from a successful landlord. It's the same with Forex trading.
There are many profitable Forex traders that provide mentor services and are willing to take-on students. This obviously comes at a cost but paying for a Forex mentor can save you lot's money and time in the long-run.
Below is a list of some of the most popular Forex mentor programs...
Step #8 - Keep accurate trading records
If you keep accurate trading records, they will become a great asset to you. We suggest you keep record of trading strategies, trading results, dates and times of trades, market reactions to news events, trading ideas and general notes.
From personal experience, we can tell you that you will forget a lot if it is not physically recorded!
Step #9 - Start socialising with other Forex traders
Being an independent Forex trader is very rewarding but can be socially isolating. Most Forex traders work by themselves. What makes things worse is that close family and friends will either not care about the Forex markets or won't have a clue what you are on about - making your Forex trading career even more solitary.
Joining Forex trading forums and discussion groups can help reduce Forex trading loneliness.
Our Forex trading forum is free to read and join. Check-out our Forex forum.
Step #10 - Start saving
Once you are ready to take Forex trading more seriously, you will need to open a live Forex trading account. We strongly suggest you start small and only risk what you are willing to lose.
To make a living from Forex trading though, you will need a decent portfolio size. If you don't have the capital at the moment, we suggest you start saving now. As long as you can make a consistent profit, the more money you have in your Forex trading account, the more money you will make. Start saving!