So you have decided to take the leap and start the journey of trading. It is a great move! Forex Trading is becoming a lot more streamlined, fast paced and easy to understand. Before you take that leap though, there are a few things that you need to do and consider – this will help you to make sure that you understand what you are getting into, how do to do it and when to exit.
Trading is a lot easier now with the increase in the number of brokers around that can help you. Having an experienced broker is an invaluable asset and before you go and choose the first one you find, take the time to get to know them, their processes and what they can do for you.
Before jumping straight into trading, take the time to learn the ropes and understand the different steps of the process. There is a lot of different jargon that is used in the trading world and you need to understand this before starting. The last thing you want is to go ahead with something and not actually understand what it means. Our A to Z of Forex Trading should help answer a lot of these questions about trading terminology for you. Besides from the jargon, you also need to educate yourself on the process. There are different steps involved, different identifications you need to provide and different ways to purchase your trades. Make sure you have covered all of this before signing up with a broker and getting started. When you are in the education and learning stage, read about all aspects of getting started as a trader – however don’t believe everything that you read! There will be at times when there are people sharing their own experiences online, just because one strategy worked for them doesn’t mean it will work for you. Find out if your broker is swaying towards certain high spread currency pairs because it works in their favour and; if so – avoid them! You need to find the method that works for you and benefits you, not the other way around.
Treat it as a Business
Investing in trades should be seen like any other business deal. You need to go into the process with a strong, clear mind and treat each trade as a business deal. The risk management aspect of trading is an important factor and you should approach any trade opportunity as if you were looking to invest your money into a company – do your due diligence!
Keep records of everything, including communications with your broker, all trade entries and exits and any losses that you incur. This information is important come tax time and it all needs to be documented correctly.
Take it Seriously
Like with any business, you need to take your Forex Trading seriously. You need to look at the bigger picture and the returns that you are planning to make. Do not go into the trading market thinking that this is just a side hobby, something to do in your spare time. If you are going into it with the mindset that it is a hobby, then chances are you will not see the returns you are hoping for. You need to look at it as a business, a long term investment and a positive financial gain. A hobby trader will not succeed the same way as someone who is trading as a business.
Find a Good Coach
You can trade on your own, with the research you have done. It has worked successfully for many people. However, if you want to go into the process with the best understanding, information and a clear plan, it is a good idea to invest in the services of an experienced trading coach.
A good trading coach will be able to guide you in the right direction, explain the different terminology to you and help you to make decisions that will benefit you and your investment. Trading coaches are there as a way to help you make a successful decision, so if you are in a position to use one – go for it! That is what their job is after all!
Use a Proven Trading Method
Speak with your trading coach and your broker to help you to come up with your plan of attack. Decide on the best way forward and decide on a trading method that will work for you. Having a strong trading method in place, such as the LIFT Method, means that you are in a strong position from the first step and you are using a method that has shown results previously.
The journey of trading can look a little daunting to begin with. There is a lot to learn, a lot of strange jargon and lots of numbers. With the right broker and the right trading coach you will be able to learn the process and make the decisions you need to make. Don’t jump into it before you are ready – if you do not understand it, ask for help.