Reasons why every trader is simply a work in progress - belajar forex trading demo

Reasons why every trader is simply a work in progress ~ belajar forex trading demo

Your first days as a forex trader promise to be tough. But you must not give up. You will probably spend the first month of your trading life holding your computer’s mouse with the cursor resting on the entry or exit tab of your trade station waiting to exit or enter a trade for no apparent reason. The first months of a trader’s life are hell because the transition from demo to live trading comes with the reality associated with handling real money.

It does not matter the kind of strategy you have, you will make some mistakes along the way. But woe unto you if you have no trading strategy at all. You will be part of that group of forex beginners that buy because a candle is bullish and sell because a candle looks bearish. The adrenaline rush will be common; you will probably spend the whole day staring at the screen imagining of how much you could lose in the next minute. Do not be afraid to lose- but lose only a little.

You must understand from the onset that forex trading is not for the fainthearted. You must have courage to accept when you are wrong and close the trade before your account is wiped out. You must have realistic targets so that you get to exit with profits instead of staying too long in a trade until the profits you have made are wiped out as result of a move turning against you. Trading is like a battle, and you must therefore have an entry and exit strategy for every currency pair you choose to trade.

The first days could however be less painful if you can master a few trading rules. The most important is to become a long term trader. Look only at the daily charts for the right trend. Once you have determined whether the trend is up or down, wait for a perfect opportunity to buy or sell. This should probably take place on a retracement with a buy limit or a sell limit. You must of course have a look at the economic calendar so that when a candle takes a particular direction you are aware whether its fundamentals are becoming stronger or weakening. This enables you to cover your profits or stay longer in a trade.

With most trending markets you could be able to cover your profits in the first three days depending on the volatility. But it should not matter how long you wait, once you have decided to trade nothing but the long term charts you will perform well as a forex trader. Problem with the lower timeframes is that they cause you to buy or sell against the trend most of the time and to trade every piece of news. These are some of the easiest ways to lose your entire investment fast.

Once you are trading the higher timeframes and are closely watching the currency’s fundamentals, you should ensure that you are in with the correct leverage. Forex brokers provide leverage as much as 1:500. This is especially the case with brokers not registered in the Unite States. Remember that you always have the option to adjust your leverage. And I should encourage you that in your first month of trading your leverage should not exceed 1:50. A higher leverage could be good, but more often than not it is the number one cause of capital draw down in your trading account. Do not get excited at the prospect of making much per pip; just consider having to refund the account because you received a margin call on a single trade.

Trading the higher timeframes, getting the trend right, watching the currency pairs’ fundamentals and entering a trade with the right amount of leverage puts you on the path to becoming a profitable trader. But you will gain even more confidence if you have a strategy that alerts you when to enter a trade. This entails learning the different kinds of candlesticks. Most candlesticks are good reversal patterns or trend continuation patterns. Learn about the morning star, the evening star, the bearish engulfing pattern, the bullish engulfing pattern, the hammer and the shooting star and from  them you will develop a strategy to enter or exit a trade.

Some candlestick patterns like trading on the hammer or the shooting star are probably the easiest to master. They simply require your dedication for a number of days and you’ll be good to trade on them. It can be good if somebody explains them to you but you will learn faster if you get a forex demo account where you can practice with virtual money. If you already observe the foregoing or if you believe you already have a strategy, why don’t you now open a live forex trading account with a small amount of capital to test yourself on the psychology of trading? Remember that you are a work in progress improving with each passing day and giving up so early in the day will be the wrong decision.
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Call us today on 0725 050 419 for the best forex trading orientation.

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