Learn Forex Trading Step-by-Step

Posted by James Alon on March 26th, 2021

Learn Forex Trading Step-by-Step

I’ll never forget the feeling I had. That day when I placed my first forex trade and made a 0 profit in a matter of minutes. I was taken over with a rush of euphoria, as I believed I just found the holy grail and that I was going to be a millionaire faster than you can blink. Unfortunately, as anybody with true experience in forex trading will tell you, that was far from the case as just as quickly as I made that 0 profit, I lost it along with an additional ,700 over the next week and a half. It was upsetting to say the least, but it was in that moment that I discovered I had a real passion for forex trading and I was determined to make it work.

Now, just a disclaimer here before we get into the ins-and-outs of trading and what the journey entails, I want to preface this by saying I was NOT a naturally good forex trader or a “forex trading expert” by any stretch of the word. I started out in this game arrogant, impulsive and stubborn, three of possibly the worst traits you can have when it comes to trading. However, that’s another reason I love it so much as forex trading is the ultimate self-development tool and will help you develop the discipline, patience and perseverance you need in order to succeed at any facet of life, not just forex trading. When discussing forex trading, especially learning forex trading, it’s important to give people a sense of realism in regards to just what trading entails. Trading, especially forex trading, is NOT an easy skill to develop. 

The reason being for this is that forex trading forces us to go against numerous instincts that we have developed over thousands of years of evolution and survival. We as humans are wired to want to know exactly what is going to happen next and stay away from anything uncertain, as uncertainty equals danger in the reptilian brain.

Now, in a profession such as forex trading, it’s important to note that the entire mantra of the game is uncertainty. Forex Trading is a probabilities game. Now, I want to be clear here, that forex trading is not “gambling” in the traditional sense you may hear about. Both do involve a level of speculative risk not noted in other professions, so it’s not surprising to associate the two with one another but at the end of the day, gambling involves taking a guess on outcome with no real strategy behind it, it’s more so a game of luck and you cross your fingers and hope that you’re on the right side for that particular turn. 

However, forex trading should be approached from an entirely opposite viewpoint, for example let’s use a casino. In Casinos, every single thing is taken into account and measured. They pump just the right amount of oxygen into the room, they have the dealers change shifts on a timed schedule in an orderly fashion and they have the pit bosses stand in particular spots at particular times. While to the untrained/outside eye this may all seem coincidental but in reality, casinos are just working an incredibly sophisticated system that allows them the best possible chance to come out profitable at the end of every day.

Profitable forex trading is no different, you need to develop a system and a strategy that has been tested to show that you will not only win more than you lose, but also to be able to make multiples on the money that you are risking, which leads me to my next topic, risk management. Risk management is by and large the most important aspect when it comes to profitable forex trading, and there’s really no debate that it isn’t. Risk management works like this, let’s say that you have one thousand dollars in a forex trading account and you are looking to use ,000 as your base and grow it incrementally.

So abiding by your system, let’s say you risk two percent of your account on every trade, so per trade. 

Let’s say that you lose two trades in a row putting you down four percent on your account. But, let’s say on the next trade you risk but your final take profit is set at a risk reward of 1:2 and it hits it. What that means, is that you just doubled the amount of money you were risking and in the process wiped both of the previous losses that you experienced clean. This was a quick example, but when it comes to building out your forex trading plan, it’s vital to make sure that risk management is at the helm of your strategy, as learning and applying risk management will improve your trading exponentially from both a profitability and psychological standpoint, which brings me to my next important topic when learning forex trading: psychology. If you’ve done any digging or research into forex trading, you’ll come across numerous different sayings including “trading is 90% psychology, 10% skill” or “you can have the best strategy in the world but if your psychology is off, you’ll still find a way to lose” and I really couldn’t agree more with these statements.Forex Trading Step-by-Step from USA's most trusted trading coach - Chartistry Forex

Again, this goes back to my original point at the beginning of this article, forex trading forces you to go against every instinct you have developed. It isn’t easy to put money into a trading account and watch it go down and up then down and up and so on and so forth, it’s hard to watch yourself lose especially after you worked hard to gain the money in the first place. However, going against this basic instinct is going to be the difference maker between being profitable and successful and not. If you are constantly worried about losing then I guarantee you will lose it all. I say this from personal experience by the way, I didn’t just read this somewhere, I’ve watched myself be so scared to lose money forex trading that I subconsciously caused this act to happen and thus bringing myself to a state of misery. In forex trading, you HAVE to have a clear head.

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James Alon

About the Author

James Alon
Joined: March 26th, 2021
Articles Posted: 1