I used to be like you. I used to be a beginning forex trader. I wanted to make extra money, quit my job, and make a living trading the forex market. I used to want to be what you want to be now. Looking back on it now, I truly wish that someone would have shared some forex trading advice when I was just starting out.
I made some terrible mistakes. I made some mistakes that I knew better than to make, but I made them anyway. My mistakes cost me thousands, literally thousands, of dollars. Why did I lose so much money? Because I completely ignored sound forex trading advice.
The sad part is that you will probably ignore important forex trading advice too. Why? Because 95% of beginning traders do. They think that they are the exception. They think that the rules won't apply to them.
Listen, from trader to trader, read this article very carefully. It has some great advice and trading tips from someone that learned how to trade the forex the hard way.
1. Practice. Practice. Practice.
It sounds simple. It sounds inconsequential. It even sounds boring. But trading is just like everything else in life - you have to practice to become good at it. The great news is that you can practice trading the forex absolutely free - all you have to do is open a demo account with any forex broker.
Simply go to a search engine and type in 'forex demo account'. Choose a broker, follow their directions, and you can be trading in real market conditions in minutes - that's right, not hours or days. You can be trading a forex demo account with real market prices in just minutes.
2. Trade a system.
Once you open your demo account, do some research and learn the trading basics. Learn why the forex market is open 24 hours a day. Learn what market trends are and how to make money from them. Learn about some basic indicators - moving averages, candlesticks, and trend lines. Don't get overwhelmed; just take it a little at a time.
As you study, things will start to make sense, and you will begin to develop your own system. Trade that system in your demo account until you are comfortable with it. And you can't be comfortable with a system until you are comfortable losing money with it. Here's why.
Every trading system will lose money sometimes. If the market is acting strange, the system that worked so well all year might lose 3, 5, or even 8 trades in a row. Unless you have tested your system thoroughly enough to know that it will make money over the long term, you are not ready to trade with live money yet. So find a system and trade it until you are completely comfortable with it.
3. Start small.
Trust me, there will eventually come a time when you are ready to trade with real money. Amateur traders will start trading with real money after just a few days or weeks of trading in a demo account. Real traders - you know, the ones that will make money consistently - will make hundreds of trades in a demo account before risking their hard-earned money.
But when you start trading live, start small. You can make a lot of money in the forex, but you can lose a lot of money even quicker. Be patient, take your time, and realize that trading the currency markets profitably means that you are one of the few who actually followed good forex trading advice.