Tips For Newbies - How to start your forex trading career.

Tips For Newbies - How to start your forex trading career.

Trading the forex market can be a very rich and rewarding experience for those who start from a solid foundation. For those that jump in head first with no previous training and no pre-defined plan to trade the forex market, disaster is only a trade a way. I mean that in the most literal sense because if you have no trading plan and no real idea of what being a successful forex trader entails, than you will quickly develop and reinforce all the wrong habits that eventually will destroy your trading account much faster than you think. This article is written out of personal experience and knowledge and will give you some idea of how to get started trading the forex market with the goal of consistent profits in mind.

The first and arguably most important factor in determining wither or not you are ready to trade forex is to sit down and take a look at your entire personal financial picture. If you are planning on funding your trading account with money that you might possibly need for any living expense than you are not ready to trade. You need to have disposable income that you are totally ok with losing; this is the first step in developing the proper habits of a successful forex trader. If you are trading with money that you need for bills or anything else in your life, you are doomed to fail because you will be overly emotional from the very beginning while trading, a sure fire recipe for disaster.

After determining that you do have enough disposal income to open a forex trading account you can then begin to develop a personal method or system for trading the market. I will save you months or even years of frustration, time, and money by telling you this; all you need to make your entry and exit decisions is a naked price chart. That’s right, you don’t need a bunch of fancy indicators and you certainly do not need to buy some two thousand dollar black box system. Trading is mostly psychological and most people over emphasize the technical analysis side of it. A good foundation in price action analysis is all you need as far as the technical side of trading goes. Once you know the basics of price action in the forex market you can then develop risk/reward strategies and concentrate on maintaining your self control and discipline.

I suggest you demo-trade for a month or two or three before trading your real money in the markets. Develop a good system for entries and exits so that you already know what to look for and what to do when you trade with real money. You need to know what you are going to do before you get into the trade because if you try to decide while the trade is happening you will inevitably make the wrong decision due to emotion. You need to have all scenarios planned out before they happen, so if x happens you will do y, if a happens you will do b, there should be no deciding while the trade is open.

Finally, learning from people who are already consistently successful in the forex market is probably the best route to go. The problem is that many people claim to be successful traders but few actually are for long periods of time. Forex trading is full of people trying to make a quick buck by selling some bogus trading systems that are overly complicated and simply don’t work. Simplicity is your friend when it comes to trading the forex markets. Remember that, it’s important.

So do your research before jumping in the forex market. Only trade money you can afford to lose, study price action and naked price charts and learn from a good mentor such as myself, demo-trade until you get your trading plan tweaked just right, then and only then should you think about diving in with real money.