Let's start at the beginning — what does ‘getting into trading’ mean? Your friend has a friend who got into trading, and they're doing great now. How did that happen?
A glossary of terms: trading on the foreign exchange currency markets is known as Forex trading. It's appealing to many because an individual can do it without any qualifications. ‘Day trading’ means opening and closing a position within the same day.
Rather than a long-term investment, you're reacting in real time. Working every day. It's important to understand this part: Forex trading is a job, not a scheme to get rich. If your friend's friend is doing well, it's because they are putting in time every day to make informed decisions.
If you're good at this job, it pays better than most. The key point is that you have to be good at it, or you lose money. If you're a bad janitor, you still get paid. If you're a bad day trader, you can lose a lot.
Looking for a better job? Good. Are you cautious? Even better. Here's how to avoid some of the most common pitfalls.
1) Put Your Wallet Away
Imagine you're planning to become a pilot. Is your first flight going to be aboard a real plane with real people on board? Hopefully not. Most pilots spend many hours training using flight simulators, and the same can be said of successful Forex traders.
Forex indicators are the signals that experienced traders base their decisions on. Using a free demo account can accustom you to the way Forex indicators behave, in much the same way as a flight simulator works for pilots. It gives you the experience without the risk.
It's almost essential for beginner Forex traders to learn about Forex indicators before they actually start using money. So put your wallet away, find a good free demo provider and earn your wings before you fly.
Confidence is the reward of wisdom, not a guarantee of success
2) Go to School
It's important to hammer home that this is a profession. Almost all professions require training, and often that requires money. Not a huge amount, compared to the potential benefits. But you do need training.
Finding a good platform to help you learn Forex trading will be of huge benefit. There are many schools out there for budding traders, but all the good ones will focus on minimizing risk and appreciating small gains.
That's a simple idea; a philosophy of success. Markets are complicated. Find a school with a good philosophy and an even better understanding of how markets work. You need both.
3) Don't Trust Your Instincts
Young children are often convinced they will be great footballers because of their love for the game. Then they play with their friends and find that there's someone who anticipates their every move. It's a hard lesson.
Success requires understanding and knowledge for most of us. Don't believe that you have an instinctive understanding of market forces; nobody really does.
Overconfidence is a terrible thing, and has been the ruin of many beginner Forex traders. Learn your craft and learn it well. Justifiable confidence, grounded in wise choices, is the pay-off of hard work.
4) A Job, Not a Lottery
As mentioned earlier, Forex is not a scheme. It's not a get-rich-quick solution to financial worries. You're relying on the behavior of the currency markets for your profits; don't try to move faster than they do.
If you have a will to learn and patience, this can be a great new job. Take your time and learn the trade, and you may just find that you become that friend of a friend who everybody is talking about.Share this via: