Four Steps to Successful Forex Trading for Beginners

Everyone’s dream is to work from home and get rich on their own … or not have to work at all. Many people find the appeal of Forex trading very attractive and may seem like an answer to the question “how to work from home”. Still, I’ll tell you that more people actually lose money by investing in the Forex market than they win. This is a simple matter of economics … for every winner … for every dollar you can win, someone lost a dollar. The money has to come from somewhere, right?

So you may be wondering, does anyone make money by investing in the Forex market and if so, does they make a living doing this? The answer to that question is definitely yes. There are many small amateur investors who can make a good living by trading the Forex market.

I know … your next question is “how do they do it ?!” The answer is varied and ranges everywhere from those who have progressed as traders to those who just seem to have a sense of numbers and charting and those amateurs who have taken the time to get to know the market, find a system that works for them and amass their wealth. Simple enough, huh? Maybe not, so let’s explain that …

Learning about the Forex market – There are many resources on the Internet that will give you an overview of how the Forex market works. It would be futile to try to educate you properly in this article. Most Forex brokers also have resources that can help you with your education and are very helpful in this regard. They want you to be successful because they make money from every trade you make in the form of “front”.

Finding a profitable system – When you master the basics and understand how the market works … how to trade, the time when the market is open, and that is 24 hours a day as the world turns (except weekends and holidays) you are ready to try to find a “system” that makes sense and with which you can make profitable trades. This system can be a manual system with which you keep an eye on various indicators and execute trades after all the criteria according to your system have been met. Your system may be based on the latest news such as quarterly reports or other financial news that you may know is affecting the media and thus affecting a particular currency pair. Your system could be a favorite expert advisor or “Forex robot” that has proven profitable to run an algorithm, similar to the above system where you look at different indicators …. with an expert advisor or Forex robot software does all this for you. These are “Expert Advisors” or “Forex Robots” in short.

Demo account – When you have a profitable system that works for you and makes sense, I will suggest you run it on a demo account or “trade on paper” with it for a few months. Demo accounts are available in all major brokerages and this is a must for any new trader. There is no point in spending your starting money while you are still studying. Once you discover that you are consistently making profitable trades without emotion and while using only your trading system, it will be time to switch to a live account.

Live Account – It’s getting interesting here. It is one thing to trade paper, but I will tell you that there is nothing like trading your own money. The hardest part of trading live is staying unemotional about your trading and sticking to your trading system. This is what separates successful traders from those who end up giving their money to successful traders and this is the hardest part of trading … sticking to your system of hell or water.

Now that you have a thousand-foot view of what Forex trading is, I encourage you to educate yourself and jump in there with a demo account as soon as you feel comfortable. Forex trading can be very exciting and, for some, very profitable. Just remember where all that money comes from and make the decision to become a smart trader who only trades your system and don’t be one of the many who give their money to the few who make money in the market