The best thing any forex school can teach: there are 1000 ways to come undone in trading, but a few surefire ways to stay on track…
Forex Trading School 101: Keep It Simple!
Someone once told me trading was a simple matter, but doing it was the hardest thing he’d ever done. The point is, the basics of learning to trade forex are simple, but the beginning forex trader inevitably complicates matters.
This may be due to either their own nature and/or the fact that their inexperience and resulting insecurity lead them to habits like piling one indicator on top of another in order to divine some ‘truth’ about current price behaviour.
This over complication leads to doubt, fear and inevitable mistakes. If you are wondering how to start forex trading the best piece of advice you can get and the first thing you should do is this: Keep It Simple!
Leave more complex matters until later when you are actually consistently profitable. At that stage, you can incorporate new things into your trading as an experiment to see whether or not they actually add to your bottom line.
The truth is that as a forex trader you are placing bets on which way price is going to run. And it can only run two ways: up or down. It’s that simple. After that, it all comes down to mathematics and probability.
For example, if price can only run two ways, it’s obvious that tossing a coin to choose the direction of your trade should result in roughly 50% winners and 50% losers. In this scenario, if you can win slightly more on your winners than you do on your losers, you will likely be ahead over the long term.
But even systems and strategies that only return 30% to 40% winners can be great systems, if the size of their average winner is much larger than the size of their average loser.
That’s it: simple maths, the answer to the question “is this the right system for me to trade?” The thing is you can only find this out through testing of course, which is a subject covered later. For now, let’s return to basics.
The pages in this section of AuthenticFX will give you a good grounding in how to begin trading forex. No school can cover everything of course, but the aim of this one is to get you started on the right foot, ever mindful of the risks involved in trading. The sections we will be covering are as follows:
First, if considering paying for some of your forex education, you may want to consider the Two Types of Forex School
Don’t forget books, an often neglected resource
Forex 101: a brief introduction to the world of forex trading, its history, development and current status
10 First Steps in Forex: the 10 first things you should do in order to give yourself the best chance of surviving
Best Forex Books: a list of the indispensable books for every budding forex trader
Free Forex E-Books: some are rubbish, but these are worth your time
Top 10 Forex Myths: there is an awful lot of baloney floating around the Internet about how to trade forex. This will attempt to explode the 10 most prevalent and poisonous myths.
The Number One Forex Scam: Believe it or not there is one major forex scam that spawns all the others.
The Top Forex Scams: a heads up on the worst of the rip-offs out there, and more importantly an attempt to give you an idea of the sort of sales pitch that should raise alarm bells when you read it.
One last scam you need to be aware of if you use Metatrader as a trading platform: the Mt4 Virtual Dealer Plug-In software is open to abuse
For the basics on how to approach your trading day in your own time zone, see Forex Trading Times: Know Your Landscape
Last but definitely not least, we try to answer the question most new forex traders ask: How Much Money Do I Need to Trade?
The next step in choosing your approach to the market now that you have covered the fundamentals would be to consider your Trader Type