Learn To Trade Forex - The Right Way

If you want to Learn to trade Forex the right way I can tell you it is not an easy task. While trading Forex for about 10 years now I get asked often by beginners "What are the keys to become a successful Forex trader?" Another frequent question is..."I want to Learn To Trade Forex the right way, what should be my primary focus  ?".

Usually they expect a recommendation list of good trading books, strategies or indicators for their chart. I always start by telling them when you start to trade you should first of all make a check list of yourself, Ask yourself:

Forex Day Trading - Am I ready for the game? If you start trading you compete against traders with much more experience than you. Most likely their trading skill level is much higher, unless your one of those rare  'naturally talented in traders'. In other words: When you trade everybody is playing in the same league. There is no Amateur League where you can practice. You stay on the field with the best of the best. It is like you never played European football but you have to play in the Champions League right away. I guess now it becomes clear why most traders completely destroy their account in the first year. Most of them never come back. Some come back but make the same mistakes over and over again. A few survive. A few of the survivors eventually become profitable. It takes a long time to belong to that elite group of profitable traders. There is no shame to make some mistakes at the start of your trading career. Mistakes are good to learn from. We just want to make sure we stay in the game to stand on the pinnacle one day. So I have to put a stop to the illusion  that it's  easy to make larger amounts of money with small risk in a short amount of time. Forex trading is a tough challenge and the sooner you accept this the better, so its best to start with this mindset from the beginning. The right mindset is an underestimated factor for most beginners. They often jump in the shark pool with an amateur attitude. You can nothing  against the big players if your lack of experience, but your attitude can be on pro-level immediately if you follow the following points.

Learn To Trade With Passion and Focus

The first point on your mindset check list should be passion. If your are not really passionate about trading and setting goals you will never succeed. You will have to invest a lot of time in trading. Trading  contains many responsibilities one is you must obviously to check  prices,news, and chart developments continuously. You will also only get better if you really focus. Reading charts and other sentiment indicators correctly can take thousands of hours of training. And it is always better if you see things as they happen than in hindsight. The time you spend on the screens and research will also depend in what time frame you trade but it should be always with 100% focus.

Learn To Trade Forex with a Humble Mindset

Don't expect to get rich fast. Set realistic goals! You will also have losing trades and always keep your performance in relation to the risk free deposit interest rates. Right now you get just 0.25-0.5% deposit interest rates in most parts of the world. If you make just 25% per year or 2%/monthly on average that is still 50-100 times more! You can not be on the winning side on every trade. If you try to push things by over leverage your account your will most likely have to end your trading career before it starts. Try to built up an account slowly instead of going all-in at the start.

Learn To Trade Forex with Self Control

Only risk money you can afford to loose. Risk is the thing we can control while trading. If you sleep bad because you worry about your positions then it is time to trim it down. Don't risk too much on a single trade. Never let your ego be in your way. If you stubborn hold a position against the market without an exit plan then you can blow up your account with one bad trade if things really go wrong. Remember the most important thing is to stay in the game if you want to win the game. The preservation of your capital should always come first. It is ok to be wrong sometimes. You just have to learn to accept that and take your loses when it does not hurt you and just move on.

Learn to Trade Forex With Patience

To honest trading can be sometimes a boring business. But boring is good in this case! Why? Because if the market is boring it is often predictable. We all love volatility but if things get too wild and exciting trading can be very hard as well. Wait for the good setups ! This is very important. A lot of traders fail because they just take trades to get some excitement. You have to wait sometimes hours or even days for a setup which has a high chance of success. To have an edge in trading is difficult. If you found an edge don't throw it away by getting in trades out of pure boredom. If you in a trade give it some “room to breath”. My best winners come often when I shut down my charts and get away from the PC.

Accept Mistakes at the start - Look for a Mentor

You will be probably doing some beginners mistakes at the start of your trading career. And I am not talking about trades which got stopped out but general mistakes like trading consistently against the smart money. You can learn to avoid the mistakes the hard way and trying to survive on your own or make a short cut by looking out for a experienced mentor. No mentor is flawless. But he can probably teach you enough that you don't blow your account like so many newbie traders. Your are still responsible for your own actions. Don't follow a mentor blindly. Make up your own mind but take his advice and make the best out of it. If you would like to learn more about my Euro session Forex trading room, then join me M-F. Please make sure you check out my videos on Youtube and my Twitter.

By Marco Hering
Research Director and Euro Session Trading Coach
www.fxlivedaytrading.com