Beginners and FX trading

It is no surprise that this is the question that most Beginners ask and want to know before they get started trading Forex.

At first, trading Forex may seem complicated and hard, but it really is not. I am not saying that trading Forex is easy. It is simple enough, takes dedication to master but there are good reasons for that, which pays off a thousand times over for your effort.

It is one of the most liquid financial markets available to traders. Every trading day 24-hours/5 days a week, you can trade Forex.

Forex traders make money from the market price fluctuations with currencies. The currencies come in pairs, such as EUR/USD (Euro/United States dollar), GBP/USD (British pound) and the Forex trader decides upon whether the price will rise or fall. We are called Spectators.

Trading Forex is not gambling. Professional, and experienced Forex traders enter a trade after careful technical analysis of the price charts for the currency pairs. They may also do fundamental analysis, checking the state of the economy for both currencies.

The Forex trader then enters the trade. He sets a stop loss, so it is not a significant loss if the trade goes against him. And he has a profit target where he will exit the trade.

The Forex trading process sounds simple. After all, you have a 50% chance of being right. How hard can it be to trade Forex profitably？

One of my past mentors told me that Airline pilots make the best Forex traders, that is a fact. They are hard-wired for survival and to avoid risk. And so must we as the speculators

Our emotional system kicks in when we feel stressed, worried, or fearful, which can be the slightest physiological response.

Our brain has not evolved from the stone age, and this is where the problem arises when trading Forex.

Forex is risky. There are chances are you will lose money trading Forex. Even professional traders have losses, but they have mastered the art of their winnings exceeding their losses.

It seems crazy to liken losing a few pounds to our common enemy (The big banks), but your physiological response is pretty much the same.

When your trade loses or profits start moving into loss, your body and mind respond.

Your heart rate elevates, and you may be holding your breath. You move closer to your computer screen, and you may be clenching your hands. Even your body temperature rises. And you start trading on emotions. Which makes it worse. All traders have experienced this one time or the other.

Nobody tells you this about trading Forex, do they？ Most trainers would not,

Pilots face risk every time they cruise down the runway, and they train to manage that risk. In effect, you must undo your human responses to risk. It is the reason why Forex is so difficult and why 95% of Forex traders fail.

Many thousands of professional Forex traders make an excellent living from trading Forex.

Are professional Forex traders different from you？

Well, yes, in a way. For one thing, they do not focus on money.

They focus on percentages. The goal for a professional Forex trader is to build up their working capital so they can withdraw weekly or monthly profits while retaining and building their trading capital.

For instance, let us say a professional Forex trader has $100k working capital and generates 5% profit a month. That is a return of $5k. We hear you. $5k for a $100k account？ It does not seem a lot of money.

Truthfully, many top Forex traders make more money than that, but they keep building their capital while controlling their risks.

A professional Forex trader does not gamble. He knows that the more capital he has, the more money he can make, and he takes care to protect that capital.

So, when you start as a new novice Forex trader with, say, $1000, the end game can look a long way away.

But do not worry, that is how you build the much-needed discipline required for successful traders.

Many brokers and sellers of Forex trading systems want you to believe that trading Forex is easy, and you can do it fast. They will try to sell you the magic system, the failproof indicator, or the automated expert.

Look, there is no fast way to succeed with Forex trading. Is trading Forex worth it？ Yes, it is if you are prepared to do the work and put in the time.

I am not trying to discourage you because you can make money from trading Forex, but it will take time.

The trick is to take your time and commit to educating yourself about Forex.

Is trading Forex easy or difficult？ Yes, both, depending on your approach.

Spend 3-6 weeks practising with a Forex demo account. When you have doubled your account with low-risk Forex trading, then you are ready to trade Forex live.

Start with micro-lots and only risk 1% of your capital.

Do not focus on the money you are losing or making.

ALWAYS concentrate on better Forex Trader

Everyone assumes that the Forex lifestyle is exciting.

imagine the big house, yachts, holidays, top of the range sports car and tons of money in the bank.

The focus is on the material gains. Not that this is wrong, we all deserve a little luxury. But approaching the Forex market with this intent is a sure way to disappointment.

This is why Forex trading is so difficult. Expectations exceed reality.

The secret is that successful Forex trading is boring.

what？ Surely not？ I bet that is what is going through your mind now.

Well, yes. Do you remember earlier we discussed the survival mind？ When you are excited, passionate, or emotional, your logical mind is clouded. You make poor decisions based on feelings and emotions.

The pro Forex trader makes decisions based on what he or she sees on the chart - nothing more, nothing less.

So, that is boring for most people.

What is not dull is your success. Can you get rich by trading Forex？ Yes, you can, and this is the approach to riches from trading Forex.

I will explain in my next article how you can overcome all mentioned.

Bola Akinya is a Forex trader and consultant with more than 20 years of immense experience in Forex Indices, Commodities and Currencies.

Prior to becoming a professional Trader, she held positions as a Head of Sales/Business Developer with Credit Registry and Operations Manager with Peak Merchant Bank both in Nigeria before moving to UK where she worked with great companies like AIG and The Wealth Training Company as Course Instructor and Speaker for over 15 years on the FX and Stock Markets before she started her own company – The Learn and Earn Forex Training Company over 5 years ago.

Over the years, she learned 121 from Top traders all over the UK which enabled her to develop her own unique strategies and trading systems that has made her a successful trader and Trainer.

She is married with 2 boys and 2 cats.

With the combined use of Fundamental and Technical analysis, she trades on the short term – medium term, as well as Economic News releases, combining both to give the consistency that is required for successful trades.