The most important thing is to understand what forex trading is and how to go about it before getting to venture into the business. Once you sufficiently equip and prepare yourself,then
the short answer is: With forex you can invest money to earn a good income. It can also generate more wealth,thus making it beneficial to study forex trading and make an income. However,in order to become a successful forex trader,you have to meet certain conditions.Failure to that,you will only make losses or stagnate as a trader. Eg
1.Forex Money Management
This is all related to risk.Big risks will generate a huge income within a short time but in case of bad high risks you account will suffer very huge losses that sometimes can take you back to zero.If you taking a lot of irrelevant risks then be lest assured that you have poor money management in trading.Coming into proper understanding of the art could be an easy thin but applying and abiding by it when things are dwindling is a very hard task.
2.A Good trading Mindset
Alot may have been written and said about trading mindset but if one has trading indiscipline then they are not going to benefit from it. A few of the good trading mindset may include:
Being confident and not worried by the dawn of every trade outcome because your main concern is on a long term basis.
Understanding the negative effects brought about by greed and fear and figuring out how to control it.
Having emotional control over trading loss and profit .See it as a positive way of growing and managing your account.
Getting to know that the lifespan of your forex trading largely depends on risk management.Failure to which your account may suffer immense losses.
The question about forex knowledge and worths is mostly asked by two groups of people:
Group one has an idea that forex is profitable.Their point of interest is whether forex trading will earn them profit or not. The short answer to this group is: if someone somewhere is making money through forex trading,why not them?You don’t need a bachelor’s degree or higher education achievements in order to earn through forex. The only requirement in successful forex trading is seriousness and religiously adhering to trading ethics.this should happen throughout the studying and trading period.
Group two wants to understand the amount of money Forex trading can generate. It’s clear that they are aware that Forex trading yields income and are confident that they can successfully trade.Their main concern is how advantageous it is studying Forex compared to investing in other businesses.
To answer this question:Take a look at the amount of money gained from alternative jobs. A medical family doctor normally makes about $105-140,000 yearly after taxation yet in order for one to qualify as a family doctor with such an income,you have to take the course on different levels for twenty years.They also work for long hours ,during the weekends and over the holidays.
An elementary school tutor makes $53,000, lawyers $130,000, sport coaches make $37,000, janitors make $25,000 and teacher assistants make $25,000 per year.
Now the question is:what income can Forex generate?The amount varies from one trader to the other depending on various factors .E.g style of trading or amount of money invested.
It’s clear that Forex trading has a high and an undoubting ability to make money and wealth incremen thus, worth to spend time on forex trading .Its also important to take caution that if you miss out on trading ethics,chances of making losses are very high. It’s good to note that you should also apply consistency while trading for you to enjoy an overflow of income.
It’s possible not to take Forex or stock trading as a full time job.Forex trading will only help you to increase the already existing wealth.
The above clarifications bring us to the conclusion that it is worth studying and becoming a successful Forex trader but it is not guaranteed that you will always make profit out of it. Just like any other business Forex trading can incur losses due to uncertain market trends or poor risk management.Sometimes you will also fail to make either profit or loss hence no income at all.This is where a positive trading mindset helps you to pull out and focus on better days of trade.Your approach to Forex trading and how well structured your daily trades are also plays a very huge part on how profitable you are going to be in the business.
I would like to emphasize that its not advisable taking Forex trading as a full time job more so if you are under-skilled and can not follow the mentioned guidelines to positive trading mindset.
Forex trading is worth the try but not as an initial investment. It requires a backup source of income to fund Forex trading otherwise it might not be possible to grow up the trading ladder.Lack of income may result to fear of risking and also greed to gain with Forex (breaching the risk management and mindset rule) thus, delaying your growth in or throwing you out of the market.
In occasions where your initial capital is not enough,live accounts come in handy to help you make profit by initiating a 2%-3% risk on every single trade set up. Money gained from live accounts can be used in starting up your own account.
The most effective way of generating capital for Forex trading is having alternative consistent sources of income.Patience is key when preparing to venture into currency trading as money will generate money which will bring more income and the cycle continues…..
Basic trading concepts which are overlooked by almost all forex traders.
Many traders out there are looking for the best trading strategies. Some have gone to an extent of complicating it just by forgetting the basics.
Any trader both new and advanced should always keep trading simple as much as possible. For one to understand what forex trading is, you need to understand why the market moves. In simple terms, market moves due to human psychology. There is greed and fear in the forex markets and this causes the move we see in the market. In my course, I always advice my students to keep forex as simple as it was meant to be by understanding some aspects which I want to share with you.
Trending market condition.
Many traders out there have the general knowledge of what a trending market is, but many do not apply this simple concept.
We all know that, when the market is going up, or making higher highs or higher lows the market is in uptrend movement. When it’s making lower lows or lower Highs it’s in downtrend movement. Simple right? Those are some of the information as a trader you need to have before you click a buy or a sell.
That simple concept is well-known to all traders who have been in the market for a couple of years but they do not know how to use it. I am here to show you how to read the market correctly and avoid guess work this year. Happy? I just repeat this mantra if you are happy so far …. It’s not hard, it’s easy. Said it loudly now!
Okay well, let’s have an illustration of what I mean;
I want us to study the above illustration of what Higher Highs (HH) and Higher Low (HL) for uptrend look like. For the downtrend, its Lower low (LL) or Lower High (LH)
As a trader you need to ask yourself why the uptrend/ downtrend movements happen. The simple answer to this is that the larger players ( banks, hedge funds etc. are desperate of that commodity or currency and they fear that, if they do not buy NOW, they will never get that cheap price hence the uptrend happens. He is interested buying higher and higher at an expensive price as the desperation escalate. The downtrend also happens with a notion that, the price is very expensive and we need to have a small discount for us to buy again. Just an example, there was once you bought an item at a cheap price and may be after 2 months it rose to the double the price. Have you? Okay. Let me explain. Since the memory for the initial price is still in your mind, when the market comes back to the price you bought, you will be interested again. The same case in currencies stocks or any commodity out there.
Since now you have understood this small logic of HH HLs and LL and LHs, let me now teach you how to use this basic concepts to make money in forex trading. Before that, lets us discuss why the ranging market happens.
A range in a simple terms means that the larger players are building up orders to continue moving in the direction of the main trend. Wait, what do you mean by main trend? What timeframe is the best for trading forex? These are some of the questions my students ask me all the times. I would like you to know that, any timeframe you open your chart you should be able to read what the market is trying to tell you. For one, if you are trading 4hrs chart your main direction of the market is daily and in case you are trading 1hr your main direction of the market should be 4hrs. That means;
In case you open daily chart and you see that, its making HH, or LLs you should jump down to 4hrs and then ensure that in case its downtrend ( the 4hrs are now showing lower lows as well and the moment you see a range building up, it should be your time to hit it. Just assume that the above chart is in a downtrend (daily) and in the 4hrs, the market is making (higher highs and High lows (Discount period) if this is not there the trade will be a risky one. Then, you find out that the previous HL is being taken, that did not make a HH (as shown above) you now wait for a range to occur. A range is when the market is not making HHs or LLs.
Before I learnt how the trading works, I used to guess or even chase the market when I see a big move. I want to warn you, you should never chase that big move you see. Are you there? YOU SHOULD never chase that big move at any given time….. Fundamental traders are planning how to kill me! Yes, that is it. Many fundamental traders gamble their money for no reason. Wait for the move to happen and then trade the pullback. Simple as that.
Just wait the market to retrace (pullback mode) to be activated. In this case, you are now waiting the big player to lure more people in an opposite direction. The moment you now see the above pattern happening, you should be ready to do some actions and make money. The basic I am giving you here should double your trading account after 1 month or even make more. Hold on!
I am sorry that I am showing all the examples in sell trades, please note that, all these basic concepts of trading I am offering here works in all the direction of the market, timeframe etc.
Okay? Let’s now discuss the above chart.
The moment you see a single move as shown above, you should be ready to trade that market for a sell. Remember all the aspects we said for downtrend and uptrend. In case, that single push of the market caused a lower low in the higher timeframe above you, in your trading timeframe, you should now wait for pullback to be activated. NOTE! When the market hit that support and it started it moving up struggling and in many swings should be a confirmation to you that your sell must work now. What you need at this time is just to wait the pull back to be activated and start making HH and Higher lows as shown above.
The reason big player does not hit it when there were only 100 orders is that, those orders are not enough for them, and they will fake that pullback mode to be an uptrend as shown and many people will start following it like sheep. You can see, when the market reached at 900 orders, the larger players came in and drove the market back to 300, at 300, the larger player is not interested in that price and now, he awaits retail traders to activate buy trades as with general knowledge of demand and supply it’s a good spot to hit buys. You should be always aware that, the larger player controls the market, for him to make money, all retail traders who have no clue of how the market works must be wrong.
I think if the information I have provided here is practiced with passion, your account will start growing. This is just a tip in the iceberg, in case you would like to get a full mentorship and become a better trader, feel free to send me an email at myforexglobal@gmail.com or admin@myforexglobal.com.
Last week alone, I received many emails asking me which broker I use, which criteria I use to choose a broker and what is the difference between ECN and market maker brokers. To answer that, I would like to give you my recommended broker which I have used for a couple of years now and all has been good for me. They have either MT4 or MT5 whichever suits you best.
