Top 5 Forex Trading Lessons Every Trader Should Learn
Forex trading lessons are dime a dozen.
But how often are they useful or practical? Look around and you find the same regurgitated content.
Many times, online day trading feels like a wild west. Expensive trading courses, paid subscriptions and what not.
Everyone is out there to make a buck at your expense!
It is not surprising then, as to why you have a hard time being successful in forex trading. You must have heard about the phrase, selling shovels to miners? Well, that is how it is these days.
What makes this day trading article different from the rest?
As a day trader myself, I have been through that whole vicious cycle.
A veteran of over 10 years of day trading experience, I have picked up some tricks of the trade.
And today I will share these top 5 forex trading secrets. These are the lessons I learned in my journey as a day trader. Mostly by making mistakes, some of which were expensive mistakes.
Looking at traders struggle with their forex trading and especially being misled, this article will put you on the right track.
No strings attached!
What will you learn about the forex market in this trading lesson?
By the end of this trading lesson, you will learn about how to avoid the many forex trading problems you face every day such as:
- What it takes to be successful in the forex market?
- The skills you need to succeed at online forex trading
- Why many new traders fail despite taking a forex trading course
- And lots more...
These ten forex trading secrets I reveal to you, cost me a lot of money and time. All it costs you, is just your attention!
So if you are ready to learn about the forex market, and willing to put in some efforts, the top five forex trading tips I give you will be valuable to you as a trader.
Are you ready to better yourself as a forex day trader?
#1. It takes discipline to be successful at forex trading
Discipline is key to your forex trading success! It allows you to manage market risk in a better way!
This is very important to remember!
Trading psychology is just as important as your trading strategy and money management.
Discipline is one of the keys to success in any business and it includes the forex market too. Some of the best forex traders are the most disciplined lot.
We don't mean that you should follow a strict army-like structure. Discipline in online forex trading means having clear goals and following a regime.
Having a trading goal is important in forex!
Target how many pips in profit you want to make and how much you can afford to lose. Then create a trading plan and stick to it.
Because the foreign exchange markets are dynamic, you can easily lose yourself in the chaos. This is where having a good, disciplined approach helps you to become a better forex trader.
When you treat your day trading as a professional trader would, that is where you will start to build up your experience and knowledge about the foreign exchange markets.
Discipline in forex trading is like having a map when you are lost!
Without a map, it would be difficult to find your bearings. Similarly, only a self-disciplined forex trader is able to navigate the chaotic markets.
But worry not!
This is something you cannot develop overnight. You need to make it into a habit, which some of the best forex traders certainly follow, day in and day out.
#2. You won't get rich overnight
The number one reason why many forex traders fail is because of impatience and greed
Ranking at number two, this is the best trading lesson I could give.
Many new traders lose money within the first few months of their trading journey.
Do you know why?
It is because, new traders are either too impatient or too greedy.
This happens because Mr. Market is always right. You can argue and debate, but the fact doesn't change.
The secret to success in the foreign exchange market is knowing when to take a calculated risk and when to stay out.
The markets will test you in and out and weed out the weak.
It is during times like these that your patience and discipline is put to the test. Day trading is not suitable for all investors and this is for a reason.
It takes a special mindset and skills to excel in live trading. And this is a skill that you cannot learn from any forex trading course.
Only your trading experience can be your best teacher.
Therefore, the best way to control such emotions is to understand that you cannot make money overnight with day trading.
The same goes with free and paid online forex courses too.
If you want to learn to be a successful trader, then it takes time and patience and efforts.
You cannot expect to become a professional trader by just taking online courses on day trading. This is an important forex trading lesson a beginner should keep in mind, at all times!
Professional traders struggle with these emotions every day. Remember that you are not alone in this.
The trick is to make weekly trading goals, have a plan and follow it diligently.
#3. Don't fall for the peer pressure
Just because everyone has an opinion on the market, doesn’t mean you have to follow them!
Do you spend a lot of time on forex forums? Have you often come across so called professional traders imparting their wisdom?
And finally, do you let these opinions influence you? Well, stop doing that!
You have heard the phrase about everyone having an opinion on something. That doesn't mean they are right.
As long as you do your homework and have a plan, you are doing just fine.
I can talk about times when I had a good trade going, only to let it go because of another trader's opinion on a forum. I’m sure many of you have been in similar situations too.
Learn to be confident when you trade forex
To trade forex successfully, you need to be confident.
You may be right, you may be wrong, Mr. Market will eventually decide. But the moment you start wavering, that is when mistakes can happen.
This is when you end up taking a bigger risk.
But of course, confidence in forex trading comes and when you have enough practice.
So trade on a demo account if need be, take a risk here and there and learn to trade the live market as well. Make sure that you learn from your mistakes.
When you have a successful trade, take the time out to see what worked in your favor. You should then build upon these strengths. The same goes for losing trades too.
Pause, analyze and understand what went wrong.
#4. Forex indicators and trading strategies alone will get you nowhere
We all like a fancy new trading indicator or a sophisticated looking day trading strategy
It is but human nature to fall prey to all things fancy. A trading course, or forex trading strategies are not enough to be successful in the forex market.
It takes a lot more than that!
But sadly, a beginner that wants to learn how to day trade will focus on just that. This is because traders give forex indicators and trading strategies a lot more credit than it is due.
Your risk management skills also play a big role just as your emotional psyche. Let's face it, day trading is a high risk game.
Learning to be a consistently profitable forex trader
Many traders think that to make money in forex, they need to be right most of the times.
This is not true!
On the contrary, to make money in forex, you need to be a consistently profitable forex trader.
This means knowing when to cut your losses and knowing when to let your profits run. But easier said than done right?
The best way to remedy this is to keep going at it.
Practice makes one perfect, so keep practicing, be it with a live trade or on a demo account.
#5. Price is king!
Regardless of what trading indicator you use, everything comes down to price when you are trading forex.
Without price, you would not have any indicators.
Understanding how price behaves in currency pairs is essential in your endeavor to learn forex trading. The forex market, just like any other market is fickle.
Even the best forex indicators will fail if you rely too much on them, not knowing what triggers the buy and sell signals.
For many forex traders, price or price action are the terms that can evoke a sense of fear. If you want to learn forex, knowing how price behaves and understanding price action is important.
Learn to trade forex the right way
Price is king because, without price there is no market in the first place.
This means, you need to have a good grasp in technical analysis. Start by choosing a good trading platform. Then focus on improving your technical analysis skills.
There are many good forex trading books covering technical analysis.
Therefore, go straight to the source. Many forex trading courses simply re-sell this same information to you. This makes the knowledge, diluted.
One of the best forex trading books I can recommend is The Technical Analysis of the Financial Markets, by John J. Murphy. This book is a goldmine and gives you all the information you need about price and technical analysis.
You could of course opt for a forex trading course that will give you only secondhand information. The choice is up to you.
The #1 golden advice on forex trading that I can give you
Trading forex is a journey!
There is no formal education when it comes to learning how to day trade the forex markets. And this is what makes things difficult, especially for a beginner.
It is easy to succumb to one's emotions and end up making a wrong choice. The day trading mistakes can vary from letting go of that winning trade, to purchasing an enticing online forex course.
This is when things start to go downhill.
Don't get me wrong. There are some genuine forex trading courses available out there. But you need to research and find courses that are legit and carry weight.
If you continue to endlessly keep looking for the best forex market indicators or a subscription to market analysis or trading signals, you won't last long in trading forex.
At the end, you only end up few pounds lighter on your wallet, and maybe, hopefully a bit richer in your experience.
So don't make the regular trading mistakes every beginner falls into.
Be smart and prepare yourself.
Forex trading is not simple and the success in your trading depends entirely on how much you persevere.
Rockfort Markets Trading Team