The heart and soul of your currency trading education is how to buy at the bottom of a trend and sell at the top. Currency trading for beginners can be quite daunting. Not only is there much to learn about forex, but a trader also has to learn a lot about himself. Self-discipline is a vital ingredient for every successful trader. It does no good to win big and lose even bigger. The winners in this game know that the secret ingredient to long-term gains is consistency.
Peter Bain’s Advanced Forex Course
In order to get into the right state of mind and control your emotions while you trade, you must write down a trading plan that you can look over regularly and be able to remain focused on your current trading objectives. By jotting down your trading plan, you automatically place yourself in the top 3% of people who have written down their plans and goals, which gives you an edge over the vast majority of traders. Look these questions over and answer each one in order to develop your own trading plan.
1. What is your strategy for entering a trade? The goal here is to find an entry where the risk is low but the reward is high. Write down specifically what level of risk to reward you are willing to take before entering a trade.
2. What is your strategy for exiting the trade? Don’t ever enter a trade without having a clear exit strategy. You should set yourself a target as to when you will exit the majority of your position. Be sure to always take some profit and leave a little to ride if you think the trend is heading to the stratosphere. Just like you learned in your forex trading tutorials, always, always, always have a stop loss in place in case the market moves against you.
3. Which type of order will you use to exit or enter a trade? Limit orders allow you the to define your reward to risk by delimiting exactly when you will be take into the trade while market orders allow for a quick exit. Figure this out beforehand.
4. How big does your account need to be in order to successfully trade? The larger yours is the better, but is your account big enough to meet the trading objectives you have set for yourself. The spreads that you pay your broker can add up quickly. Did you factor that in?
5. What percentage of your account are you willing to risk with each order? 2% to 10% is the norm. Anything greater than that and you are at risk of drawing down your account rather quickly. Also, that percentage is how much you’ll have in play at a given time. Don’t get caught in the moment and risk more than you reasonably should.
6. How many open positions will you have at any given time? More than two and you are at risk at having your attention dispersed. You don’t need to obsess over your trades but you do want to be able to stay on top of them. Set your trade limit and stick to it.
7. How much leverage will you be using? This is vitally important. High leverage can kill your account. Forex offers some the highest leverage out there. Set your limits and don’t exceed them. Leverage cuts deep when it moves against you.
8. Is your trade journal planned out? What information is vital for you to keep a running log of? What information do you need to know at a glance? Are you keeping enough information so that you can do a post-trade analysis? You fx trading course will give you a good idea of what you need to keep track of.
9. What are your quality controls functions? Just like a production assembly, you to need to perform the duties of quality control. Is your trading shining a bright light on weak points? Be sure to give yourself homework so that you can turn those weak points into strong points whether it be chart patterns or identifying lines of support and resistance. This is how you truly learn fx trading.
10. What preparatory steps do you need to do before you start your trading session? Don’t be scrambling during a trade looking for your reference books or your cup of water. Create a “pre-game” checklist that will ensure you have everything you need before you need it.
That is your free forex education on how to currency trade with a session plan. This put you in a strong to position to being able to control the emotional rollercoaster that we go through when trade. Review your trading notes often and develop the discipline skills you need to become a long-term success. Keep getting currency trading courses under your belt and you’ll be making consistent wins in no time.
