Forex Course: A Quick Forex Guide for Traders
Raul Lopez
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.
The latest information and news on Forex:
FOREX-Euro falls on bank sector jitters, Aussie sags - Reuters
CNBC
FOREX-Euro falls on bank sector jitters, Aussie sags
Reuters
TOKYO, Sept 7 (Reuters) - The euro fell on Tuesday from a three-week peak against the dollar hit the previous day, as rekindled worries about ...
FOREX-Euro falls on bank sector jitters, RBA eyedFOXBusiness
Euro Falls on Concern About Fina...
FOREX-Dollar dips, hovers near 15-year low vs yen - Reuters
Forex Crunch (blog)
FOREX-Dollar dips, hovers near 15-year low vs yen
Reuters
LONDON, Sept 6 (Reuters) - The dollar dipped on Monday and looked poised to test a 15-year low against the yen after failing to retain gains ...
Forex Trading and Currency Exchange Rates ? Dollar Loses Weekend Momentum TodayBe...
FOREX-Euro hits 3-week high, pares gains; sterling falls - Reuters
FOREX-Euro hits 3-week high, pares gains; sterling falls
Reuters
By Tamawa Desai LONDON, Sept 6 (Reuters) - The euro dipped on Monday as short-term players were squeezed out of long positions after the single currency ...
FOREX-Euro hits 3-week high, pares gains; sterling fallsFOXBusiness
all 24 news ar...
Forex: GBP/USD heads toward session lows - NASDAQ
Forex: GBP/USD heads toward session lows
NASDAQ
FXstreet.com (Córdoba) - The Pound is resuming the downward move that started with the Asian session and dragged the pair toward 1.5350, where it set an ...
Forex: EUR/USD recovery capped by 1.2815, technicals point higherNASDAQ
Forex: EUR/USD pressured do...
Forex: Yen consolidates gains, BoJ policy meeting in focus - NASDAQ
AFP
Forex: Yen consolidates gains, BoJ policy meeting in focus
NASDAQ
FXstreet.com (Barcelona) - The Japanese Yen eked out 5/6 pips against the Greenback on Monday, in a day dominated by very thin volume on US holidays. ...
Forex Trading: EUR/USD Reaches 1.2900 Following Better Than Expected Non-Farm .....
foreign exchange - Google News
Yen Rally Gets No Relief as Traders Bet on Bernanke Easing - Bloomberg
Forex Crunch (blog)
Yen Rally Gets No Relief as Traders Bet on Bernanke Easing
Bloomberg
?The yen is almost guaranteed to strengthen against the dollar with a second round of QE,? said John Normand, global head of foreign-exchange strategy in ...
Dollar Weakens Against Higher-Yielding Currencies on Glob...
Asian Currencies Retreat, Led by Korean Won, Ringgit, on Intervention Risk - ...
Asian Currencies Retreat, Led by Korean Won, Ringgit, on Intervention Risk
Bloomberg
The won retreated from its strongest level in four weeks after policy makers were suspected of buying dollars in the foreign-exchange market yesterday, ...
Asian Currencies Strengthen on Signs US May Avert Double-DipBu...
How much of the dollar/rupee trading happens offshore? - Livemint
Moneycontrol.com
How much of the dollar/rupee trading happens offshore?
Livemint
The Bank for International Settlements (BIS) released the preliminary results of its triennial central bank survey on foreign exchange and derivatives ...
Rupee ends at 4-week high against USDEconomic Times
Rupee off 4-week ...
Euro Falls on Bank Funds Concern; Asian Steelmakers Rally on Obama's Plans - ...
CNBC
Euro Falls on Bank Funds Concern; Asian Steelmakers Rally on Obama's Plans
Bloomberg
The won retreated from its strongest level in four weeks after policy makers were suspected of buying dollars in the foreign-exchange market yesterday, ...
Euro Falls on Concern About Financial Health of Europe...
Daily Foreign Exchange Market Summary - International Business Times
International Business Times
Daily Foreign Exchange Market Summary
International Business Times
The US dollar extended losses against most major currencies but pared gains on the Japanese yen after mixed economic news from the US. ...
Japan Said to View US Opposition as Yen Intervention ObstacleBloomber...