Forex is simple: how to become a trader in 8 steps. Read the article before entering your first position and avoiding losses and disappointments
Forex trading can bring a stable profit if it is treated as a job, and not a "casino", in which the result is determined by a random choice. Advertisements for training courses with "copyright strategies" promising to teach anyone to earn a million dollars for money, in a month. Newbies do not know what to choose – buy a course or study you? The answer is one: your knowledge is always better; it will help you avoid losses and disappointments. Read the article for the main steps you need to go through before opening the first position.
The names of companies and software products are indicated for information only and are not advertising. The trader makes all decisions independently.
The right choice of a broker is the main factor of successful Forex trading. If there are incorrect quotes, execution of transactions at other prices, long opening/closing of positions, even the most profitable strategy will only give losses.
Before opening the first demo account, see the following:
Important. Some traders are constantly looking for a new broker. This is the wrong approach, even if better terms are offered. If there are no problems with your broker, it is better not to change the stable situation. The main thing is stable work, and not 1-2% less commission for withdrawing funds. It is necessary to look for new options, but without prejudice to the main trade.
The main working tool of the trader. The choice is limited by the broker's offer, usually, for Forex it is the MetaTrader terminal. It is easy to learn, there are good free training courses, many additional indicators and advisors have been developed.
You can trade browser or mobile phone iOS/Android. All functions of the desktop version are supported, except for connecting additional indicators, automatic trading, and testing.
Only through the terminal can you really evaluate the work of the broker. To do this, open several demo accounts with different brokers, compare quotes through terminals. Quotes should not differ from others by more than 3-5 points. If the quotes are clearly different, change your broker.
Important. The main thing for any trading terminal will be reliable Internet access and an uninterrupted power supply. Speed is very important for mobile and online platforms - if there are short-term transactions (scalping), it is better to choose the desktop option.
The next step after choosing a broker, installing a terminal, and opening a demo account will be to study methods for predicting price movement.
The market is predicted by the following methods:
Important. Any of the methods of analysis (even fundamental) cannot be used alone to make a decision. You always need additional confirmation: a graphical pattern based on indicators, news on market volumes. Learn all types of analysis!
To study candle analysis, there are many "classic" books that you can buy or download on the Internet. Beginners need to know one main principle.
All candlestick patterns are divided into two groups: reversal patterns and trend continuation patterns. Further, the patterns differ in "strength", but the basic principle remains. There are few basic patterns; there is no problem finding them on any trend, asset, and timeframe.
Important. In the "classic" form, candlestick patterns rarely appear on the chart. You need visual experience in finding and analyzing "wrong" shapes. If you have problems with remembering images, switch to technical strategies.
Let's move on to indicators. Hundreds of options have been developed - among which it is difficult to understand whether the algorithm works or not? Keep the following in mind when choosing your toolbox. All indicators are divided into three groups:
Important. As practice has shown, the optimal number of indicators on the chart is no more than 3-5. Otherwise, they begin to give opposite signals; the trader begins to make mistakes in the direction and point of opening a position.
A trader must have his strategy, even if it is a modification of a ready-made technique. This is the only way to compete with other traders, making profits where others close losses. With Internet options, you can take ideas as a basis. Like indicators, all strategies are divided into three groups.
Important. In addition to the strategy, you need to choose the right timeframe. Both of these factors must match for psychological comfort. The characteristics of Forex timeframes require a separate article; look for the necessary information on the Internet.
Beginners are the main target audience of advisors. It's simple: we put on a real account, start trading, and watch how the profit grows. You don't need to learn technical analysis, look for patterns, or calculate the volume of trade. Everything has already been done. The Expert Advisor often does not have any settings, and it is impossible to influence the process of opening/closing positions.
Such a "passive" trading mode always leads only to losses. Maybe there are advisors that really trade in any market for profit, but they cannot cost 50-100 dollars. There are other offers - for $1000 you can buy a simple combination of standard oscillators or Moving Average, which are freely available for free.
Be careful when buying. Look for products with settings, a description of the strategy used, and statistics for no more than the last 2-3 years. Even if these are medium and long-term positions. Make sure that the statistics do not have gaps; this means that the authors selected the most profitable periods without losses.
Important. Automatic advisors require the uninterrupted operation of the computer and the Internet. If there is no connection with the broker's trading server, the advisor closes all positions, and this can lead to losses. This will not happen when using a VPS server. It can be rented from a broker for pay or free.
As an alternative to automated trading, you can use trading signals from a broker or independent services. Thus, risks are reduced: the terminal does not automatically open deals, and you can safely make a decision. Signals can be either paid or free. There are signals for any asset: currency pairs, stocks, cryptocurrencies, and binary options. The subscription price also varies in a wide range: from free broker signals when opening a real account to tens and hundreds of dollars per month from independent services.
Most signaling services have two main problems:
There may be a short test period, but if it is less than a week, you will not be able to assess the quality of signals in the current market. If you decide to use signals or services with unlimited FREE packages. Let some information is not available, but the test results will be better.
Important. All trading signals (even paid ones) are used only as recommendations confirming their strategy. The supplier is not responsible for losses, only you make all decisions.
Summarize…
Newbies should always start with a demo account and basic technical analysis tools. Even if you are only an investor, basic knowledge of technical and graphical analysis, risk management systems (money management) will also be useful to you.
So you will be able to speak with traders “in one language" and understand what his strategy is – there will be a stable profit or positions are opened simply "on the market" without a system hoping for price movement into profit
