Foreign Exchange Market | Forex Online Trading For Beginners
What is Forex Trading
For starters, it’s an income opportunity accessible by anyone with a computer and internet access. However, few truly understand this activity. To increase your chances of success, be sure to do your homework. The trading part is straightforward enough, as it involves exchanging one asset for another.When it comes to Forex, this means trading currencies and related financial assets.Governments, businesses, and retail investors all participate in this market, which is open 24 hours a day.Because of this robust participation and availability, the Forex market is the world’s most liquid and accessible market.
The basics are pretty simple.To turn a profit, a trader buys assets he believes will rise in value and sells ones he (or she) thinks will decline.For example, if a euro is worth 1.1250 U.S. dollars and you think it will appreciate in the next 24 hours, you could place a Buy order.Should the euro rise to 1.1300 against the greenback, you could close out this position for a 50-pip profit.
The amount generated by such a Forex trade would depend on the initial amount invested.Breaking the process down into its component steps reveals a more complicated situation.
Let’s start from the beginning: First research available brokers, accounts and trading strategiesThen create and fund an account.Now you are ready to begin Forex trading online with the very first baby steps.Yes, it’s that simple to start.However, regardless of which currency pair you want to trade and any particular strategy you want to use – you must prepare.Forex traders frequently follow trends, and this might make it more tempting for a novice to set up positions without conducting the proper due diligence.Religiously follow your trading plan!.The proximity of important economic events.Once you have performed this analysis, you can place your trades through the relevant software package. Selecting a reliable and broad platform like the MT4 platform can help ensure your Forex online trading expertise can grow.Online Forex trading is a unique way to make additional income or even a living! If you decide to take this route, you’ll have no boss, no schedule and no quota.There are many variables you must consider before taking the plunge and becoming a professional trader:There is no salaryPaying the bills will likely require consistent profitability, which is a challenge in itself.However, if you have the right self-motivation and determination, this may be the role for you.Keep in mind that as a professional Forex trader – all research, legal, accounting and high-level decision making will be your responsibility. Your discipline will be crucial.
The Advantages of Online Forex Trading
For starters, being your boss means you are in control. You have the freedom to pick your hours and live where you want. Also, generating a consistent profit by trading Forex makes you recession proof. However, regardless of where the market is going, Forex traders have the opportunity to make money.While everyone else may benefit from positive trends, you may be able to profit whether the broader economy is expanding or contracting. Once again, all of this may sound great, but it requires you to know what you are doing. How is all of this possible? The answer is simple.
The Spot Market
#One key factor is the spot market, which refers to the online marketplaces where participants can buy/sell currencies and deliver them on the spot. This situation is currently easy to conceptualise. A trader receives price quotes from his broker, who got them from a liquidity provider. Amid this situation, all market participants are connected, and prices are a function of supply and demand.
Contracts For (price) Differences (CFD)
CFDs have made trading available to more people than ever before, by allowing investors to make money on assets without owning them. During the era of Charles Dow, trading did not exist. If investors wanted to turn a profit in Dow’s time, they could buy a stock and hold it in the hope that it would appreciate. However, if that asset lost value, those investors could be stuck with security that nobody wanted.Thanks to the CFDs you can both buy and sell currency pairs.Keeping the risk under control is the most important aspect of trading. If you can manage it, without becoming greedy and religiously following your trading system, you will eventually succeed in making constant ROI with Forex trading.
From time to time I get asked from »big-goals-traders« how to build up your forex trading career, if you have a small forex trading account, as 1000$ trading acccount…Well, in trading there are NO shortcuts.If you are not consistently profitable yet, you must start working on yourself first, before even trying to think about managing the millions of dollars for your clients.
What I mean, by »working on yourself« is simply this… You must develop as much as possible of experiences and build up your trading skin. What most retail traders are doing is well known – they open their live trading account right away without any knowldge, trading plan and journal, and they spend whole days in front of their charts, smashing the buy and sell buttons trying to catch every tiny market move.
Totally wrong approach, and no surprise +90% of retail traders are consistently losing the money trading the markets. Then they blame the markets , their brokers , state 100s of excuses on why this and that….You name it! If they majority of traders would work on themselves first, results would be much more different as they are.
Trading account value does not mean nothing. What matters is consistency in your trading process. At the end of the day, trading account value is just a number. Focus on your trading process, not on the money.If you are not disciplined, and do not have the patience with your trading process, trading the small trading account, even the big trading account will not help you.
Think about you growing up – did you try to sprint before you even learnt to walk? Of course not. Here is my formula for long- term forex trading success: DISCIPLINE + PATIENCE = CONSISTENCY
Once you have a proven forex trading edge,strategy, your most important piece of puzzle is the TRADING MINDSET. Without the Discipline and Patience to follow your trading plan even the best forex trading strategy can fail. You are your own leader and responsible. You make your own decisions, no one else.
If you want to become a professional forex trader you must first focus to become the best forex trader you can be. After everything else will fall in place. As I said, there are no shortucts in forex trading.
As my mentor said to me many years ago: »Everything is just between YOU and the MARKET. Just focus on your own trading.« You need to invest time and energy to become a good forex trader. Nothing is build over the night. Even the Rome was not build in one day! Brick by brick, step-by-step should be your new motto.
#You can not have a one profitable trading month, and start seeking investors capital right away. Put yourself in investors shoes…Would you back up the trader that have been successfull on the markets only for one month, or a trader who is managing the risk well, and have steady gains for the last 12-months?
Of course, you would rather financially back up the last trader. Thats why I recommend you to try to stop overthinking about your trading career in the future, and just focus and work on what matters – your trading skills and habits, in order to become the best version of yourself and trader.
Just give yourself a time, focus on what is important and what you can control. Once you achieve consistency on your trading account for at least 6-12 months, everything else is possible, and new doors in the financial industry will open to you.
10 Questions for Forex Trader
To become and stay a consistently profitable forex trader you will need to take responsibility for your actions and decisions. Those 10 questions for forex trader were set to improve your trading. Your decisions and actions have consequences on your trading process. Successful forex traders lead and take ownership for their mistakes and success.
If you are struggling with your own forex trading, or you are looking ways to improve your daily trading process please read below, ask yourself those questions and honestly answer on them. If you answer on most of them with »YES«, you are on the right track to become and stay good trader with right trading mindset, skills and habits. If you answer on most of them with »NO«, make sure you work on your trading progress and fix your mistakes as soon as possible.
Do I follow my trading plan and rules of my forex trading strategy (edge) on each and every trade I take?
Do I use my trading journal consistently and review my trades to build my trading confidence, learn from my trades, decisions and improve my trading process?
Do I follow my daily, weekly trading routine to stay organised, disciplined and patient forex trader?
Do I make my own trading decisions, or do I listen to other traders?
Do I take responsibility for my decisions, actions and results, or do I always blame the markets and everyone else?
Do I believe in myself, my goals and my trading process?
Do I enjoy my forex trading with positive emotions, or do I play emotional war with myself? Am I trading the markets just to make money, or because I have a passion for it?
Do I have a life outside of my trading to improve my mindset and focus? Do I spend my time with friends, family, and on other activities and hobbies in order to be happy, relaxed and focused?
Do I stick with my habits, trading style, process even if the market does not give me any new trading opportunity for this day or week? Do I think long-term and stick to my trading style, or I am changing it frequently? Do I apply consistency, or I always break it when the markets change?
Do I follow my goals and dreams, or am I wasting my time?
2 steps to fast track your forex progress
1) Decide what your goal is
I am not talking about the process goals today, but you need to know why do you trade. What is your WHY? If you will know what your WHY is, you will be more focused and determined to follow your process goals to achieve the »WHY goals«. Answering on “What is your WHY?”Besides being passionate about it, you need to know exactly why you decided to learn to trade and why you want to trade forex market. Do not tell me you want to just earn quick bucks, because this will not work out on long-term.
Let me give you a few ideas below…
Did you decided to learn to trade and become a good trader in order to achieve:
Side-Income Source by trading forex part-time
Consistent profitability for yourself and move slowly into full-time trading, and quit 9-5 job?
Consistent profitability for yourself and start also teaching others to trade?
Consistent profitability for yourself and start offering trading signals to others?
Do you want to build public track record and find investors to trade and manage capital for others?
2) Find yourself a forex mentor and conquerIf you want to save yourself a lot of money, time and energy the quickest way to achieve your trading goals (process and outcome goals), is to find someone who is already where you want to be. Take your time and look around – there is a lot of people who are already where you want to be in the future. Check on web, check the local networking groups, ask your friends and connections…
Looking back when I started I wish I would find myself a mentor right away before I started, but I did not. I thought I was smart enough and I will make it on my own without any help from anyone. Wrong. If you want to speed-up your learning curve and save yourself a lot of struggle, find yourself a mentor. If you found a few and you are not sure yet, study them, talk to him/her and see, if you are “on-the-same-page” and you two can work together.
A lot of greatest minds and successful people in the world had mentors – from Mark Zuckerberg, Bill Gates, Warren Buffet, Richard Branson and many more!
What I see many times is that many traders have problems with information overload out there. Instead of focusing on one mentor or one thing, they always follow and try to do something else extra. They probably think “It is too simple. It has to be complicated” or “I will change this and try this and that”.NO!When you find yourself a mentor what you need to do is very simple…
LISTEN, LEARN and APPLY to the Y.
Do not be one of those who think they are smart and change, deviate from the strategy. Whether is in business, sport, or trading forex. Goal of having a mentor, is to learn and get a proven step-by-step process (you can call it blueprint), and then apply it on your own, by not trying to be smarter than a mentor, change things and fail with it, and saying “It did not work for me. It is not working.”