Trading is like any business and it has risk. It means that you may lose all your money while trying making money in matter of second not day nor month.
|TRADING IS A MIND GAME WITH HIGH PROBABILITY|
To become a Forex Trader is easy, but to become profit in Forex Trading as Trader is difficult. If someone wants to make a living by trading, it is more challenge.
The statistic by popular Forex Broker like Oanda, Forex.com, or Interactive Broker, 95% of trader lost their money in the first 3 years. Few of them making money and just some actually making money for living.
But why so many want to become Forex Trader. The survey has made recently has some reasons:
- People want to get rich quick because they hear some story about rich Trader.
- Forex Trader can work anytime, anywhere they want, even when they are traveling. They just need a laptop with Internet.
- With leverage, and $10k, a person with decent trading skill can make $2k per month easy.
- People like to gamble so Forex Trading make them to feel more like gamble when their trading are profitable.
If you are one of them so you may like to become Forex Trader. Although, it is challenge to trade for a living, but it is possible with a lot of work, discipline, and without gamble.
First, to become Forex Trader, you must learn the basic knowledge of how to analyze market which is trading pair in Forex. This guide will only provide the roadmap to become Forex Trader and profitable, not going into details of the learning because of its depth.
To analyze market you have to learn one of three or all: Technical Analysis, Fundamental Analysis, and Sentiment Analysis.
It is difficult to say which one should be spend more time study than the other because it depends on what type trader are you. If you are a long term trader, you may consider Fundamental Analysis because you will know why the market goes up or down. If you are Swing Trader or Day Trading you may focus more on Technical Analysis.
In my opinion, you should consider to study the basic knowledge of three to know the concepts behind the methods. One mistake that many new trader have made is that they try to learn many things. The irony is that they never used it so why bother to learn.
The new trader should spend more time to learn the basic, pick some good indicators, good classic patterns, Japanese candles Patterns... to study them and try to apply them in real time situation not the old situation. So you will feel how the greed and fear are in your mind. Most of the time, you have a good plan and high probability to win but the greed and fear will cause your lost because you will become too confident when you win and too coward when you lost. As a result, you will not let profit run and cut loss early.
Therefore, new trader should keep it simple because it is. Learn the basic of three and trade demo ,and along the way of your trading life, become the best of some and will make money for living..
Here is the roadmap to learn and practice to become Forex Trader:
step 1: learn the basic of Technical Analysis, Fundamental Analysis, and Sentiment Analysis and trade demo with a small account = $1000. After 3 months (take time to really think about it, use what you learn on your demo account) Demo account can be opened at Oanda.
Books recommend: Technical Analysis of Murphy, Come into my trading room of Elder, Fundamental Analysis of Kathy Lien, Japanese Candlestick by Steve, Sentiment in the Forex Market by Jamie, Babypips.com is a good Forum for Forex Traders.
step 2: keep trade demo account for 3 months, made a journal, pick some Technical Analysis Indicators to use on your charts (perfect set up is 3 indicators: trend following, oscillator, momentum), follow trade management, money management.
step 3: learn second time while trade demo, be familar with some indicators, TA patterns, Japanese Candleticks. Learn Let's Profit Run, Cut Loss Early.
step 4: while trade demo, create your system based on your indicators and test it on demo. keep track of your profit, loss to see if you make progress. If you can not make money with demo, do not open live account.
if make money from demo. Decide which type of Forex trader you want to be: Part time, or Full Time. Do you have other source of income to live if you trade full time? and a lot of questions to answer. Then go to step 5.
step 5: open live account = $1000, trade small to be familiar with broker, software and adjust your feeling.
What is your profit Goal?, What is your risk per trade? Is your profit enough for living? What if you lost money? After making profit, you can add more fund to trade.
To begin to trade for a living, My recommend is:
- Account balance should begin with: $25000 with leverage is 1:50 for U.S. Trader
- Profit Goal is 5% of $25000 = $1250, Learn to walk before you can run!
Do not think that 5% each month is EASY!!!
If you do not have $25k, go to work, save money and trade part time (if you can make profit, if not quit trading, find someone to trade for you).
Before trade full time, have at least $25k as Account balance, 1 year of your living cost, emergency fund, part time job.
step 6: Keep Journal. During trading time? There will be up and down. Some people will make stable profit for living after 2 - 4 year. To be honest, 95% of Forex Trader lost money. So get some advice from Good Trader who is actually make money by Trading not Gambling!
Thanks and Keep working Hard!