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Forex Course: A Quick Forex Guide for Traders
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In this Forex course we will review some steps you need to takecare before you venture into your trading journey. Most tradersventure into the Forex market with little or no experience inthe Forex market. This results in painful experiences likeloosing most of the risk capital, frustration because it seemedso easy to make money, etc.
The first thing you need to realize is that, it is not easy tomake money. As every other endeavor in life, where importantrewards are to come after mastering it, you need to work hard.You need to get very well educated and experienced before havingthe possibility to receive important rewards on it. The key onmastering the Forex market relies on commitment, patience anddiscipline.
Ok, you have decided you are going to trade the Forex market,you have seen several advertisings featuring how easy is to makemoney in the Forex market. You might think this is youropportunity to reach your financial freedom, right away, time ismoney, why waiting any longer if you have the opportunity tomake money now. I know, I’ve been there, but you have a chancenow, 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. Oursystems tell us the exact time where we need to get in themarket and out the market in order to make a profit (i.e. buylow sell high.)
Creating a system is the first big step you need to take carefirst. Why is this so important? Because you need to build asystem that suits your personality, otherwise you are going tofind hard to follow it, thus hard to profit from. A system canbe based on technical indicators or what we called a mechanicalsystem or based on experience and intuition or what we calldiscretionary systems. I highly recommend using and trying firsta mechanical system, because discretionary systems are dangerousduring the early stages of a Forex trader (can lead toindiscipline.) With experience, on later stages, you will findout which signals work better and which ones to avoid.
The next step in this Forex course is to try your system on ademo account. Most Forex brokers offer a demo account, anaccount with virtual money. This is an excellent choice to testyour trading system as there is no money at risk. In this stepyou will figure out if the strategy works for you. If you feelcomfortable trading it, then it is most likely to produce goodresults. How much time should you stay in this step? It varies,but you shouldn’t go one step further until your system getsconsistent profitable results over a period of time. It can takemany months, but remember, you need to be patient.
You must be honest to yourself; you need to take every singlesignal generated by your system, not only the signals youthought were going to work, otherwise, you are going to haveproblems in the next two steps.
Ok, by know you had consistent profitable results on your demoaccount. You might think its time to go full. Nope, nope, nope.There is a big difference between trading a demo and a realaccount. The most important difference lies on emotions (fear,greed, anger, etc.) These are psychological barriers that affectevery single decision made by traders regardless of what he/sheis trading (stocks, bonds, Forex, futures, grains, etc.) Theseemotional factors, in my opinion, are the most determinantfactor that separates profitable traders from the others.
The next step in this Forex course is specially designed to dealwith emotions and to confirm the results obtained in the priorstep (consistent results in a demo account.) At this step youneed to trade in a real account with limited funds. Some brokersoffer fractional lot trading. Meaning you are able to trade anydesired amount (even cents.) The important thing here is thatthese emotions we’ve been talking about are present only whenthere is real money at risk. At this stage, you are going to seeif you are really comfortable trading your system and if you areable to trade with such system, remember different systemsproduce different emotions. If you are able to produce similarresults than those obtained in a demo account, then ready forthe next step. If you didn’t, then you might need to createanother system, there is chance your system never fit you. Ifyou created consistent profitable results on this stage, youhave a chance to produce similar results in the next one, on theother hand, if you didn’t produce good results in this stage,you will not be able to make on the next stage. Remember, youneed to do things right, and be honest to yourself.
The last stage is trading in a real account with sufficientfunds. If you are at this stage, and have passed successfullyevery prior stage, then you have a chance to make it, go aheadand try it, you need to be confident in yourself and in yoursystem, your strategy have already produced consistentprofitable results, there are reasons to believe you are goingto make it. Very few traders fail at this stage (if passedsuccessfully prior stages.)
Trading successfully is no easy task, it requires a lot of work,patience, discipline, and education. By completing the stepsoutlined in this Forex course, you have a chance to produceprofitable results. I repeat it again, you need to be honest toyourself about the results obtained in every stage. Some timesyou might need expert guidance regarding your system developmentstrategies.
About the author:
Raul Lopez is a full time Forex trader; his trades are based ona price behavior approach. Raul is also founder ofhttp://www.straightforex.com a high quality Forex training company.
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