Learn Forex Trading Step by Step

Learning to trade forex

is not easy. It takes

time
,

dedication

and a good deal of disposable income.

Many traders end up giving up because they don’t know what they’re doing
. They have no guidance and are not sure how to progress.

But with these 10 steps to

learn forex trading
, you can make the process significantly easier! Of course, you don’t necessarily have to follow them in linearly, but doing so will help a lot.

In this article, we’ll look at the top 10 steps any beginner must make to

learn to trade forex
.

Want to

learn how to trade forex

like a pro? Take our

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!

10 Steps to learn forex trading

Follow these steps and you’ll get on the right path to becoming a great trader. Many of the steps listed here:

1. Commit to learning everything about forex trading


learn the basics of forex trading

If you’re starting from the very beginning, it is very likely that you don’t know too much about

forex trading
.

Sure, you may have decided that of all the instruments to

trade, forex

is the one for you, but you need to know all the basics.

There are many terms and phrases you need to understand
.

Do not make the mistake of thinking that

forex trading

is like

gambling
.

Forex trading

is really a game of probability

, and so you need to understand how it works.

You shouldn’t be making trades without understanding your chances of making a profit or a loss.

When it comes to doing your initial research, this may take some time and it is important to be patient at this stage.

A key thing to point out at this stage is that

you’ll never really complete this step
. The

learning process is never-ending
, there’s always new stuff to

learn about forex trading
.

Learning forex trading

should be part of your trading routine, you need to make time for it every day, even if you’re a professional.

When you stop

learning forex trading
, you start putting yourself at risk. People forget things and start getting into bad habits.

2. Choose a broker

There are quite literally millions of different

forex

brokers to choose from and you should look at what each one offers.

If you did the first step right, then you should be able to understand what they are offering and how this compares to other brokers. If not, then you need to do more research!

Ideally,

you should stick to a well-known broker
, one that many people use and is

trustworthy
. You should be able to check reviews brokers and see what people are saying.

It is best to avoid lesser-known brokers as it can be harder to tell if they are

scams

or not. Further to that, they will likely not offer the same quality service a well-known broker will.

You also do not need to pay too much attention to special offers for new traders.

If a broker is good, they shouldn’t need to offer you anything extra
.

But none of this really matters if the broker you choose is not regulated! This is the most important thing to look for. If you can’t find out who regulates them, stay away.

Read:  Forex News Trading Robot Free Download

And preferably, the country that regulates the broker should be the same as the one you reside in.

3. Open an account


open a trading account

Brokers typically offer a range of different accounts and at first, it can be difficult to choose what account will suit you because you probably don’t know what trading style you will implement.

As a beginner, it would be wise to open an account that doesn’t require too much money

and allows you to trade in small quantities.

You

don’t need to worry about leverage

or a wide range of

forex

pairs at this point. Leave these to the professionals.

At Trading Education,

we advise against setting up a

demo account
because this can give you false expectations about how the market moves.

Demo accounts also typically give traders far too much fake money to play with which removes the element of risk, which is always present in real

forex trading
.

It is important to bear in mind that although choosing the right account is useful, it probably won’t be the last account you open.

As you perfect your skills, you may consider different options.

4. Get a trading platform

Getting straight to the point,

many

forex traders

use MetaTrader 4

, widely known as MT4 (and to a lesser extent, MetaTrader 5 – MT5).

In fact, MT4 has pretty much dominated retail

forex trading

for the last two decades.

Because of this,

there is a lot of documentation available

to help you

learn to trade forex

on their platform and there are plenty of people to ask for help and forums to check.

There is nothing wrong with trying out other platforms, but MT4 will be easier to get started with at the beginning.

You should also check what your broker is compatible with.

It is quite rare for a good quality broker not to work with MT4
.

That said, your chosen broker may also offer their own platform, and some are fairly good.

As you can imagine, without a platform you basically cannot trade. Ideally, you should dedicate a good deal of time to

learn how forex trading

works on your trading platform.

5. Devise a risk management strategy


devise a risk management strategy

Putting together a

risk management

strategy is a crucial step before starting to trade.

You are completely free to start

trading forex

at this point now you have a broker and a platform, though it is highly advised that you spent a little more time preparing yourself.

A

risk management strategy

is basically a set of rules you apply to yourself to minimise the effects of losses

.

A well-known risk management strategy is to

only trade 1% of your what’s in your trading account per trade
.

By doing this, your trading account will last a lot longer and you will be able to

learn more about forex trading

from each trade.

Learning to recognise risk goes hand in hand with the next step…

6. Learn how to analyse the forex market

By learning how to analyse the

forex

market, you will be able to enhance your risk management strategy and improve your chances of making a handsome profit.

Read:  Forex Trading Platform With the Lowest Spread

You’ll

learn

what opportunities are worth getting involved in and which ones aren’t.

There are many ways you can

learn

to analyse the

forex

market.

Most forms of analysis can either be categorised as ‘fundamental’ or ‘
technical

.

Fundamental analysis is where you estimate how the market will likely move based on news events.

Typically, such traders will take into consideration things like

GDP
,

unemployment
,

inflation
, etc. Usually, this kind of information is readily available on a

forex

economic calendar

.

Technical analysis is a much broader topic and includes a variety of different market tools, often referred to as ‘
indicators
’.

They can measure a number of things and many traders feel it is smarter to rely on technical analysis which can be measured more accurately.

To really

learn forex trading
,

you should have knowledge of both technical and fundamental analysis
.

7. Start making trades


start making trades

Now you know the basics, it is time to start dipping into a little bit of trading.

You can’t really

learn forex trading

until you

start doing it

and for many, this will be the real turning point.

By turning theory to practice,

you will see what really works for you and what doesn’t
. Any plans you originally made may go right out the window.

Some elements you thought were easy might turn out to be hard and vice versa. You’ll also see how trading affects you

mentally

as well.

But whatever you do,

don’t expect to immediately start winning

. You will make plenty of losses. However, this shouldn’t get you down, it is completely normal.

If all you do is make losing trades, don’t worry. Think of these losses as an investment to

learn forex trading
. If you

keep at it long enough, it will pay off
.

It is also possible that you may find yourself in the reverse situation; you keep winning. Here you should be cautious and remember that you are still new to trading,

you are not invincible!

You may also find that from this point you start to find things that you want to research more in order to improve your trading.

8. Learn forex trading styles

Now that you’ve started trading, you can start refining what works for you.

This step will take a long time and just like the first step, never really ends (we repeat that a lot!). You should always be trying new things.


Forex Trading

style’, for most people, this usually comes down to one specific question;

are you a ‘day trader or a ‘swing trader’
?

Day trading

is essentially a full-time job, you do it throughout the day

. Typically, day traders will open positions in the morning and close them in the evening.

Swing trading is more long-term, though it requires less time
. Swing traders may close a trade days, weeks or even months after opening them.

Read:  When to Buy or Sell in Forex Trading

Some believe that the ‘real money’ is in swing trading, others disagree and prefer day trading.

As a beginner,

you probably have less time to trade and so swing trading may be a better option

as you can do it in the evening after work, for example.

Then, as you become more experienced, you can consider day trading.

9. Keep a trading journal


trading journal

Keeping a trading journal is how you

learn

to perfect your trading style.

With such a journal, you would log all your trades, taking note of why you entered a position, how large your position was and what the outcome was.

By doing this, you can see what works for you and what doesn’t.

If you don’t keep a trading journal, you will never

learn forex trading

and will be doomed to repeat the same mistakes

.

You may be familiar with this famous phrase from Albert Einstein:


“The definition of insanity is doing the same thing over and over again but expecting different results”.

In

forex trading
, this phrase especially rings true. Without a journal, there are many things you won’t notice about your trading strategy.

Only when you put them on paper will they become obvious, which can hopefully lead to change and improvement.

10. Continue to learn forex trading

As we have mentioned throughout this article,

learning to trade forex

never stops!

Even professionals are still

learning to trade forex
.

You need to continue to dedicate time to learning new things about

forex trading
. Don’t think that trading is solely the act of trading itself!

But keeping your knowledge sharp, you will be able to find more opportunities to make a profit.

As mentioned in the first step, when you stop learning

forex trading

you are putting yourself at risk.

Learning forex trading

doesn’t always mean to

learn

something new, sometimes it serves to remind you of things you forgot and must relearn

.

Key points

If you remember anything from this article, make it these key points.

  • The beginning involves a lot of research
    . You must remember to be patient, wait until you know all the basics before trading.
  • Understanding risk and the market is vital
    . Ignorance of the two will only serve to lose your money!
  • At some point, you will have to start making trades
    . When you know the basics, you can start putting them into practice.
  • Learning is never-ending
    . Even professionals are still

    learning to trade forex
    ! Make sure you dedicate time to it.


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Learn Forex Trading Step by Step

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