In this Forex course we will review some steps you need to take
care before you venture into your trading journey. Most traders
venture into the Forex market with little or no experience in
the Forex market. This results in painful experiences like
loosing most of the risk capital, frustration because it seemed
so easy to make money, etc.
The first thing you need to realize is that, it is not easy to
make money. As every other endeavor in life, where important
rewards are to come after mastering it, you need to work hard.
You need to get very well educated and experienced before having
the possibility to receive important rewards on it. The key on
mastering the Forex market relies on commitment, patience and
discipline.
Ok, you have decided you are going to trade the Forex market,
you have seen several advertisings featuring how easy is to make
money in the Forex market. You might think this is your
opportunity to reach your financial freedom, right away, time is
money, why waiting any longer if you have the opportunity to
make money now. I know, I've been there, but you have a chance
now, I didn't, no body told me what I am going to tell you.
We, Forex traders, make transactions based on a set of rules.
These sets of rules are what we call a Trading System. Our
systems tell us the exact time where we need to get in the
market and out the market in order to make a profit (i.e. buy
low sell high.)
Creating a system is the first big step you need to take care
first. Why is this so important? Because you need to build a
system that suits your personality, otherwise you are going to
find hard to follow it, thus hard to profit from. A system can
be based on technical indicators or what we called a mechanical
system or based on experience and intuition or what we call
discretionary systems. I highly recommend using and trying first
a mechanical system, because discretionary systems are dangerous
during the early stages of a Forex trader (can lead to
indiscipline.) With experience, on later stages, you will find
out which signals work better and which ones to avoid.
The next step in this Forex course is to try your system on a
demo account. Most Forex brokers offer a demo account, an
account with virtual money. This is an excellent choice to test
your trading system as there is no money at risk. In this step
you will figure out if the strategy works for you. If you feel
comfortable trading it, then it is most likely to produce good
results. How much time should you stay in this step? It varies,
but you shouldn't go one step further until your system gets
consistent profitable results over a period of time. It can take
many months, but remember, you need to be patient.
You must be honest to yourself; you need to take every single
signal generated by your system, not only the signals you
thought were going to work, otherwise, you are going to have
problems in the next two steps.
Ok, by know you had consistent profitable results on your demo
account. You might think its time to go full. Nope, nope, nope.
There is a big difference between trading a demo and a real
account. The most important difference lies on emotions (fear,
greed, anger, etc.) These are psychological barriers that affect
every single decision made by traders regardless of what he/she
is trading (stocks, bonds, Forex, futures, grains, etc.) These
emotional factors, in my opinion, are the most determinant
factor that separates profitable traders from the others.
The next step in this Forex course is specially designed to deal
with emotions and to confirm the results obtained in the prior
step (consistent results in a demo account.) At this step you
need to trade in a real account with limited funds. Some brokers
offer fractional lot trading. Meaning you are able to trade any
desired amount (even cents.) The important thing here is that
these emotions we've been talking about are present only when
there is real money at risk. At this stage, you are going to see
if you are really comfortable trading your system and if you are
able to trade with such system, remember different systems
produce different emotions. If you are able to produce similar
results than those obtained in a demo account, then ready for
the next step. If you didn't, then you might need to create
another system, there is chance your system never fit you. If
you created consistent profitable results on this stage, you
have a chance to produce similar results in the next one, on the
other hand, if you didn't produce good results in this stage,
you will not be able to make on the next stage. Remember, you
need to do things right, and be honest to yourself.
The last stage is trading in a real account with sufficient
funds. If you are at this stage, and have passed successfully
every prior stage, then you have a chance to make it, go ahead
and try it, you need to be confident in yourself and in your
system, your strategy have already produced consistent
profitable results, there are reasons to believe you are going
to make it. Very few traders fail at this stage (if passed
successfully prior stages.)
Trading successfully is no easy task, it requires a lot of work,
patience, discipline, and education. By completing the steps
outlined in this Forex course, you have a chance to produce
profitable results. I repeat it again, you need to be honest to
yourself about the results obtained in every stage. Some times
you might need expert guidance regarding your system development
strategies.
About the author:
Raul Lopez is a full time Forex trader; his trades are based on
a price behavior approach. Raul is also founder of
http://www.straightforex.com a high quality
Forex training company.
Futures Trading Systems -
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