Learn To Trade The Forex: How Long?
If you have been looking for a way to learn to trade the Forex, you have no doubt seen courses and educational materials suggesting you can turn a small investment of a few hundred dollars into $XX,000 in just so many months or within 1 or 2 years.
While theoretically the figures add up, especially when the power of compounding kicks in, can a newcomer to the Forex market really learn to trade the Forex in a short period of time and expect that kind of huge return on investment?
Honest answer: It is extremely unlikely!
This is not to say it is not possible at some future time, but realistically there is a huge learning curve for anyone starting to learn to trade the Forex.
If you are interested in taking this path you can generally reckon on spending at least 1 to 3 years before you acquire the necessary skills and experience needed to see consistent profits.
How fast you learn to trade the Forex, whether it is nearer 1 year or 3 years will depend on your aptitude to a certain extent and the time you have available to study and practice.
The Knowledge And Skills You Will Need
Here is what you will need to learn:
1. Basic terminology and fundamental concepts of what the Foreign Exchange market is and how it operates.
2. Signup with an online broker, download their trading platform, and get familiar with the charting package.
3. Learn how the main indicators work on the charting package including:
- Moving Averages
- Fibonacci
- MACD
- Average True Range
- Stochastics
- Bollinger Bands
4. Study pivot points and become familiar with the concept of support and resistance.
5. Study basic strategies on how to use the above technical indicators using an online study course or mentoring program.
6. Learn how to make trades from your trading platform in a demo account.
7. Start trading in the demo account for some months keeping a careful diary of trades and monitoring progress.
8. Practice, practice, practice, studying charts for hours on end until patterns start becoming familiar and the mind quickly absorbs the significance of what the eyes are feeding it.
9. Develop the trader's mindset.
This is probably the most difficult aspect you will encounter when you learn to trade the Forex.
Months, even years may be needed to develop the emotional and mental discipline to handle trades successfully. The two greatest enemies an individual will face when they start to learn to trade the Forex are:
- Fear
- Greed
Fear will cause them to exit trades prematurely when more profits were going to be put on the table.
Greed will cause a trader to stay in a trade longer than they should only to see the market take back what it offered. On the other hand, greed can cause a trader to refuse to admit when a trade is going bad and hold on as the deficit gets greater and greater.
Developing the emotional and mental discipline of a successful trader can only come through many months of hard work, practice and experience.
The Forex Is A Business
If all this sounds like hard work you are absolutely right. Forex is a business and should be treated as such. Every business that produces substantial results usually requires a major investment of time and energy.
One advantage when you come to learn to trade the Forex is that you can start with minimal monetary investment. Mini accounts can be opened for as little as $250-$300. Even if you blow your account a few times in the course of gaining your education that is still a small outlay when you consider what you are hoping to gain.
So if you are making a decision as to whether or not to learn to trade the Forex, be realistic, avoid being taken in by exaggerated claims, and weigh up all the factors.
If you are prepared to put in what it takes to learn to trade the Forex, you may get to be in a minority group of traders who get paid very generously!
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