If you want to learn how to make money from trading Forex market (Foreign Exchange), you need to be open and discard all your preconceptions about trading and what it takes to be a profitable Forex trader. It is a widely accepted statistic that some 95% of traders do not earn money in the markets in the long term, there are many reasons for this, but most of them point to having the wrong attitude when interacting with the market. It is the mindset of a trader who decides whether they make money in the market and how much money they earn.
Most traders inhibit their own success because they do not know how to develop the right trading mindset, or they simply ignore the facts about what successful Forex trading is about.
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Just like in life, there are many rules that determine whether you will be successful. As a trader these rules cannot be broken, if they are, you will simply lose more money than necessary.
Also, if you have been trading for some time and haven’t seen success or if you are new and are exploring your options, there are ways to make money without trading or investing in Forex.
It is very important that you understand the risks associated with Forex trading as you learn how to trade. Many people are interested in currency trading and are beginning to trade the market with money that they really cannot afford to lose, and that’s a HUGE first mistake many traders make. Maybe one of the most – if not ‘the most’ – important things you need to learn as part of understanding the risks in trading is that you should only trade with money that you can afford to lose. Do not lie about it yourself … If you cannot afford to lose the money in your trading account, you do not risk it. If you do not have money to invest, demo trading until you have some money you’re okay with losing will save you much stress.
Money that you can “afford to lose” is disposable capital, which means that it is money that you can lose and still be able to pay your bills and maintain your current lifestyle without needing to use credit. Once you start trading with money that you should use to pay bills or other necessities, you become too emotionally attached to it, causing you to become overly attached to any trade you take, thus increasing your chances to commit emotional trade mistakes. The only way to be objective and stress-free is to make sure that you only finance your trading account with 100% disposable capital, which means you would not lose money and that you will not lose sleep.
Many new traders get this construed, since not very many people on Earth can afford losing any money at all. Ask yourself, did you really need to go out last weekend? How much did you spend on drinks? Did you buy something flashy that you didn’t need to? Everyone who works has disposable income, it’s best to try to set a budget for it and use some of that budget as your investment money.
The most important factor in making money in the Forex market is probably mastering your own emotions. This means that you are always consciously controlling your interactions with the market, never acting impulsively, but always acting based on logic and critical thinking. Most traders crash their trading accounts by giving in to their emotions. The main reason for this is that they do not predefine their trading strategy or set their trade rules, which means they do not have a comprehensive Forex trading plan. If you have predefined your interactions with the Forex market, there is no room for emotional trading mistakes because you can plan everything ahead if you think objectively, calmly, and logically.
If you can stick to your predefined trading plan, you will use discipline and logic instead of emotions and impulses, and this will be far ahead of 95% of the other traders you are competing with. So, if you want to know how to make money trading Forex, you must first know how to master your emotions, and this will be most effective and easy by building a comprehensive Forex trading plan.
Once you have mastered your own emotions you should begin by learning and understanding the emotions of others. Pick up a book and start studying psychology. It’s no secret why psychologist make great Forex traders. Many people see them as cold or bland, that’s not the case they just know how to control their own emotions and are in full understanding of the psychology of other buyers and seller in the market.
Many traders, especially beginners, are flooded with trade information. They confuse themselves by analyzing everything about everything and trying to understand too many market variables at the same time. To truly learn how to make money trading Forex, you must first understand that the actual technical trading strategy you use to make your trading decisions need not be complicated or expensive or consist of numerous confusing and contradictory trading indicators. Many Forex traders fall into the trap of complicated sounding and looking trading strategies that are nothing more than a trick for an internet marketer to make money. The bottom line is that indicators, trading software programs and other over-the-top trading systems are simply unnecessary and usually do not work nearly as well as they claim, if at all.
The key to learning how to make money trading Forex is learning simple trading strategies that have been around for years; Price action is an example. If you learn to trade the market with simple price action, you can drastically simplify and improve your trade. In some cases, this can happen almost overnight. All you must do is find a price action trading setup that you like the most and learn to master it, do it, master it once you master it and then make consistent money out of it every month. You add another price action setup to your trading toolbox. Learning this strategy of mastering price action building at a time is the fastest and most effective way to reach a master of price action.
At the same time, for most people, there is no quick fix or one way that works. What works for one trader might not work for the next. I use price action as an example because that is one of the more simple trading strategies for beginners to pick up on. Technical analysis in general is usually much easier for beginner traders to learn, however there are those like myself who trade using more advanced strategies like fundamental analysis.
The most efficient and effective way to ensure that you fully understand how you can make money Forex trading is to get a high-quality Forex trading education. By learning to trade Forex from a professional trader and mentor, you can be sure that you will learn effective strategies that will help you make money in the market. Many beginning traders get confused and lost when they try to trade because there is so much inaccurate information about what it takes to become a successful Forex trader and which trading strategies are worth pursuing and which are a waste of time and money. The best way to avoid all this headache and confusion is to learn how to trade from someone who already makes money by trading the Forex market. Learning from a successful Forex trading mentors like here at Global Currenciez is your fastest way to learn how to make money trading in the market, read more about our University and online courses for more information.
One harsh reality about trading is that most information that is publicly available is all outdated and watered down. If you’re trying to learn how to trade from a Forex broker that offers tips and tutorials, I always advise stopping immediately. I cover this much further in one of my answers to a question on Quora where someone asked: How can I start learning Forex trading as a beginner and start investing in it? In summary, institutions and many marketers are simply looking to take your money. The best way for them to do that is by keeping you uneducated.
Ultimately, you must aspire to be part of the 5% of traders. Therefore, you need to research and reach out to those who are. You are a result of the five people closest to you. Those five people better be great traders! That’s something that we offer at GC. Access to real, updated quality information and resources as well as pure mentorship and guidance.