What Losing $2000 in Forex Trading Can Teach You
Read on to avoid making such mistakes when it comes to your start of forex trading
To those who are new to this. What exactly is forex trading?
Forex, or foreign exchange, can be explained as a network of buyers and sellers, who transfer currency between each other at an agreed price. It is how individuals, companies, and central banks convert one currency into another — if you have ever traveled abroad, then it is likely you have made a forex transaction.
In other words, let’s use the USDJPY pair, as an example. For 1 USD, it is equivalent to 106 yen at the moment. You analyze the chart for this currency pair, and most likely, you are expecting a drop; you will choose to opt for a SELL. So the moment it drops, you will profit from the fall, as shown below.
Suppose you are interested in learning more about forex trading. Check out this few youtube playlist below.
LESSON 1 — LEARN FROM ACTUAL PRACTITIONERS
“An investment in knowledge pays the best interest” — Benjamin Franklin
You’re excited, filled with adrenaline. You found a tool that makes money. Ready to make your first trade. But don’t let your it get over you. Give yourself time to learn first. Look at this as a long term investment and not a get rich quick kind of way.
LESSON 2 — PRACTICE & APPLY ON YOUR DEMO ACCOUNT/PAPER ACCOUNT
Once you have watched the videos on the basics of forex trading, you probably know you need two things by now, a broker and a platform to trade. Once you have sorted out those two, create your account on the platform, either on Metatrader 4 or 5. You have options to create a real account and a demo account. Start with a demo account first.
Apply as you learn. It’s no risk and learning potential growth.
LESSON 3 — JOIN A COMMUNITY OF LIKE-MINDED PEOPLE
What to look out for in a community?
Look out for a community that is open to discussing trade ideas, share insights, knowledge-driven &, more importantly, a community that emphasizes risk management.
What not to look out for…
A community that just send out trade signals. Boasting of profits, hide their losses, doesn’t prioritize risk management and education — all these attributes as the kind of group that wouldn’t put much effort into your growth.
LESSON 4 — DO NOT, I REPEAT DO NOT TRADE WITH EMOTIONS
Most people who trade with emotions tend to lose even more. The moment you do that, it is no longer trading effectively but just gambling. Instead, practice three losses, and you are out; it means to give yourself a break and stop trading for a while.
Once you feel much better, revisit your losing trade. Analyze what went wrong. Was it the news, or was it something that you didn’t see during your initial analysis? Review and learn from your mistakes.
LESSON 5 — HAVE A TRADING JOURNAL
Having a trading journal gives you an overview look at your trading style, failures, and success. You can learn from your mistakes and look out for trends that have given you success. That way you can avoid and minimize your losses in the long run and gives you more confidence when you do your analysis for the week.
In conclusion, if you don’t want to lose so much money from the start, implement this to your trading lifestyle. Treat forex trading as a business and not a place of a gamble for you. Invest in your growth now and create more side income. Hope this helps!
