If you have asked this question yourself, then congratulations! You have already taken the first right step, unlike the millions of others who just try to jump right in.
Once you know you need to learn more, the next step is to protect yourself from the start. It is true that a lot of new traders blow their first account, and we want to reduce the chances of that happening as much as possible. There are a few key things to make your forex trading career kick off better than those who just jump right in.
Learn the basics
There are a host of websites out there trying to teach people how to trade. I would avoid any that tell you too often that it is easy and you should just go head and drop some money in the market. Figure out what Forex trading actually is, where do profits and losses come from and how the basic system works.
There are a lot of “teachers” who will teach you how to trade Forex. I have a very pessimistic view on these trainers and academies because I was a trainer for a while myself. And I can tell you, any trainer I came across that advertised a lot did not know how to trade themselves.
The trainers I do know who are legitimate traders would very rarely teach a beginner because it is a waste of your time and money, especially when there are so many resources available to teach you the basics. JP Markets have a great Forex Training course that will probably teach you more than an over priced trainer can, and it will cost you nothing.
Find a Broker to work with
The moment you start typing in Forex Brokers into Google, you will be bombarded with results and promises to make you a millionaire. There are no shortage of brokers out there. Many of them are fly by night Brokers, but even with those out of the way there are still lots left.
First thing to check is to make sure they are properly regulated, especially in the country they list their head office. A regulated broker needs to comply with a country’s laws on how to manage client’s funds and that sort of thing. It also reduces the risk of the broker being one of those overnight groups just looking for a quick buck.
A good broker should also offer a good training package. I know most of them offer some form of training, but from what I have seen, most of the training offered by these brokers is just one or two aggressive scalping systems. These are designed to get you trading as quickly as possible so they can start earning as quickly as possible. Choose a broker that has a good training course that teaches more than just a few scalping systems.
Deposit bonuses can be a huge positive on a person starting out to trade. Just keep in mind that you can’t instantly withdraw those deposits and a broke will almost always restrict the bonus to only 30 days. This is to stop people from opening accounts and just leaving it dormant. If you use the opportunity properly, and take advantage of a deposit bonus it can really help you get going.
JP Markets offers ECN and STP accounts, attractive spreads, complete training, many different account types and more. Everything you need is with one broker
There is no decent career I can think of where someone can genuinely start doing without some kind of training. Think about what you do for a living. Could someone walk in off the street and immediately pick up your job with no training at all? So why would it be any different when learning how to trade Forex?
Before you even start trading, you will need to know what sort of trading strategy suits you the most. This can be based on your personality, your available funds, your available time and a multitude of other factors. So take advantage of as much free information you can, and preferably nothing that promises you can make millions in just a few days! Again. JP Markets has an amazing online forex course that is 100% free. No strings attached forex training.
Practice on a demo, but not for too long
Demo accounts can be an amazing way to learn strategies, learn the software, and basically get to grips with how the Forex market works. Typically demo accounts are live feeds with the actual exchange rates, and you can use them with the same software you use for a live account. Everything is the same, except for you.
One problem I had, and I have seen many other traders have, is they get too fixed on a demo account and don’t make the transition to live account. Please use demo accounts to learn and get ready, but if you find yourself with demo accounts for months on end, you’re either not putting in enough practice or the demo account has become a security blanket.
By this point you have the right broker, you’ve learnt the basics, you’ve learnt some strategies that you think you can do well with and you’ve tested them on a demo account. Now it’s time to go live and open a real trading account. This is where you will start feeling some pressure. And almost every trader who transitions from trading successfully on a demo account will start making some mistakes on a live account that they didn’t before.
This is because you have changed. It’s not the software, it’s not the prices, the markets are pretty much the same markets as before. But the added stress of it being real money will make you leave losing trades too early, very often the moment before they turn to your favour.
This is my Forex trading mantra, and repeat after me…
Plan your trade, trade your plan
Yes, I know. You think you’re done, but you’re not! At this stage you should have a working strategy that you are comfortable with. And you can see the money starting to come in. But you will get bored or you will not be happy with the money coming in and want more. This is where you go back to the learning stage and start learning new strategies to try out. There is no reason you can’t have a second demo account to practice new strategies on while you are trading live on another account.