The basics of currency trading are easy to learn and it should in my view, take no more than a few weeks of study to have a trading plan ready which can make you a great second income from home. Here is your step by step guide, to learning how to trade currencies or profit.
Don't Follow the Majority
The majority want to pay for advice or systems, to lead them to success but this is a huge mistake because, all you need to learn to trade is available for free. So Ignore the vast amount of material sold online which tell you, that you can make money easily or there is some secret to Forex price action which will allow you to make big profits with little or no risk. Pass by the huge volume of trading systems and advice sold online and ignore Forex robots, expert advisors and systems which claim they can see into the future and predict price action like a crystal ball – they can't so don't waste your hard earned cash on them. I would also warn you, not to try to hard or to try and learn to much – you don't need to.
Don't Learn to Much or Try to Hard to Make Money
We have discussed this in other articles on this site but its a fact, that Forex traders think, the markets will reward you for working long hours and trying which is true in many occupations but not in when trading currencies The market doesn't reward work and effort – it gives you cash based upon you being right or wrong. The idea of working harder to make bigger profits is totally false and you need to forget doing it and focus on keeping it simple and if you do this, you will learn a strategy which is profitable quickly so what information do you need to learn?
Learning Currency Trading Quickly Essential Info
If you want to learn Forex trading quickly, just base your system on price action and learn about support and resistance and the various chart formations such as triangles, wedges gaps etc. Use a bar chart not a Candlestick chart and use daily charts as a time frame. The two methods of trading you should research are – trading ranges and long term trend following via breakouts.
A strategy based on the above will work and you can learn all the info in a couple of weeks. You should also read as much as you can on money management and trading discipline because – the ability to preserve equity is the basic foundation, any currency trading system is based upon.
The above simple trading method will work and is very robust but you need to follow your system to success without the temptation to change it. To follow the system rules without deviating from them – you need to understand the next two points and if you do, you will be on the road to trading success.
How Many of My Trading Signals Will Make Money?
The hit rate should be around 50% of winners and 50% of losers and you need to understand that working harder on your research or making the system have more inputs, rules or indicators, won't make it work better in the markets – 50% is a good ratio of winners and if you run them to cover your losses, you will make profits over the long term. You will also need to understand the next point in terms of your strategy.
Random Distribution of Profits – Key Point for Novice Traders to Learn!
The profits and losses will even themselves out over the long term but in the short term, time periods the profits and losses will be randomly distributed. This means you will face a period of consecutive losses – this will cause a big dip in equity and most traders cannot accept this fact. Not only do they think they should win the majority of their trading signals ( and see 50% as to low) they also think they won't suffer big dips in equity and when it happens, they quit the system.
Key Point to Keep In Mind!
Most traders spend endless hours trying to make a perfect trading system which wins most of the time and has short and small dips to the downside – this is a waste of time – why? Because its not possible to do. If you just get a simple trading system and accept the markets for what they are which means accepting the risks of trading a volatile and leveraged market, you will be able to accept losses, not be frightened by them and will trade through these periods and end up making profits on your trading account.
The Proof Forex Trading can be Learned Quickly
The proof that you can learn to trade the markets quickly, was illustrated by Richard Dennis. Dennis. Dennis taught a group of people, with no financial trading knowledge to trade the markets successfully in just a couple of weeks. The people taught had no experience of financial markets but were taught to trade and became successful and you can use this story as an inspiration for your own trading education in my view.
Trading is simple the key is to have a plan which has rules which you can follow, without deviating from your plan. If you use a simple trading system, it won't take you long to learn and also, it will be easy to understand which will make it easier to follow. Following a trading plan is the problem which most traders have, they simply cannot follow rules and keep their emotions in check.
You Need to Endure Short Term Pain to Make a Long Term Gain!
I have seen traders who have studied for a few weeks and become successful currency traders and others, who have studied for years and still can't make money. The difference between the two types of trader is – the first group are seeing the currency markets for what they really are and keeping it simple and accepting there strategy will not win all the time. The other group is constantly searching for better ways to trade the markets and won't, accept the reality of Forex markets and losing periods.
The Aim of Forex Trading is to Make Money – Nothing Else Matters.
The problem for most traders is - any trading strategy can ONLY make profits long term and short term periods of losses will occur -this is just natural when trading Forex markets. When trading, people want to make money with little or no risk and this leads to their demise. By its very nature, a speculative market, involves risk and while you can manage it and keep losses small - you cannot eliminate losses! You have to endure short term pain, to make a long term gain, that's just the nature of the markets and it will never change.
Learn Forex Quickly
You can try clever systems but they won't remove the drawdown periods. The serious trader knows this, accepts it and just uses a simple trading plan, to make money and focuses on the longer term. As we have seen, simple trading strategies are best and can be learned quickly. So in just a few weeks you can learn a strategy which can make you a great long term income.