Forex scares the uninformed. It looks like wizardry. Colored lines on a black screen, talk of pips, rapid gains and even faster losses.
We took the challenge and learned how to trade forex. What we learned: there’s no one way to learn to trade, and anyone who tells you there is… Is trying to sell you something.
Many people are successful. More fail. So, what are the best practices?
1. Be in it for the long haul.
You’ve gotta have nerves of steel. If you’re a gambling type, you’ll lose your shirt, and your lunch. Be patient as you learn, and be cautious as you go. Have an exit plan. Done incorrectly, forex is no better than the blackjack table in a Vegas casino.
2. Read. A lot.
If you can understand technical analysis and strategies, how central banks operate, how they affect markets, you’ll gain confidence. Knowledge of all the underlying factors helps turn your trading from gambling to a science.
3. Form your own opinions.
You can go to any forex site and find people asking what news means. Your best bet? Learn what it means for yourself, then make your own decisions. That’s the difference between a financial loser and a winner. …Besides, anyone giving free trading advice online… There’s a decent change they’re giving advice that will benefit them. …And it won’t benefit you.
4. Consider it an art form.
Just like an art like drawing or acting, there are many schools of thought. If you want to really be a pro at forex trading, learn various strategies, then find the one that works for you. What works for someone else’s temperament may not work for you. Find what works for you, and what makes you money.
5. Take the ego out.
Few things are as seemingly mystical as forex. Just like the ocean, you’re not going to beat it. You want to learn to surf it. Set yourself guidelines, stick to them. If the waves are too big, exit the water. If you can’t reconcile your ego, you’ll want to find an auto trading platform that can do it for you.
6. Be systematic.
If you really want to learn forex, take a slow, systematic approach. Some people begin with forex as they would the stock market: by investing a small amount of money and trading it to learn. That method may work- as long as you’re truly methodical and not just throwing spaghetti at the wall.
Forex can be a great way to make money. But it’s no safer than the stock market. In fact, it can be far riskier. The market is open longer hours, there is less regulation, and it’s like the wild wild west of investing.