Are you eager to become a successful forex trader? Many people read stories about successful traders online and begin to daydream about quitting their desk job in favor of being their own boss. Others might come into a deal of money and look to invest it for more profits. Or maybe you’ve read a trading article that makes it seem like starting your trading career is easy. Regardless of the reasons why you want to get started trading, the top mistake you can make is opening a trading account without a proper trading education.
You can’t learn everything you need to know overnight. Many beginners spend a little bit of time reading articles or conducting research, but they jump into trading too quickly. If you don’t use the proper risk management and a good trading strategy, you’ll never make money. Being well-educated in this field will help to set you up for success.
Forex traders need to be able to analyze technical and fundamental data. Traders should be able to tell how the news might affect the market, interpret the data on charts, understand different trading strategies, and so on. You’ll also need to understand trading mechanics like how to place orders, exit positions, etc. There’s a lot that goes into perfecting a trading strategy and making accurate trading decisions. It’s impossible to do this without any background knowledge.
Those that are in a hurry to get started are also prime targets for scammers. If you don’t understand what types of fees and things you’re looking for, how can you know that you’re opening an account with a reputable forex broker? Many scammers offer flashy promises or guarantees of profits to lure in traders that don’t really know what they’re doing. Those traders lose their entire investment quickly.
We do have good news for traders that are willing to put in the effort. The internet is filled with free information about trading, like forex articles, webinars and seminars, eBooks, and other resources. Many brokerages even offer educational resources to their future clients directly, free of charge. Try searching Google or another search engine for this information:
-Forex basics: terminology, principles, theories, and calculations.
-Forex Trading Mechanics: how to place an order, exit a position, change your leverage, operate a trading platform, etc.
-Forex analysis: look at technical and fundamental analysis
-Forex Strategies: there’s a lot of them, like scalping, day trading, news trading, etc.
-Risk-management: look at ways to minimize your losses, such as setting a stop loss
Reading articles like this one that revolve around trading mistakes and trading psychology can be helpful as well. When you think you’re ready, you can even practice on a demo account before opening a real account. This can give one an excellent idea of where they stand and if they are truly ready to make an investment.
Learning forex trading requires time and determination, it isn’t something that can be done quickly. Rushing to open a trading account without a proper education is the number one trading mistake that most beginners make. If you read something online that gets you excited about forex trading, then that’s great – you should keep that enthusiasm while understanding that there is no ‘get rich quick scheme’ or shortcut to becoming a successful trader.
Even if you have the money to invest right now, do yourself a favor and get a solid education before you open a live account. If you’ve already opened one and don’t know what you’re doing, try switching to a demo account and take a break from live trading until you’re ready. Your brokerage should hold your funds for you but be sure to check for any inactivity fees. Some brokers charge these fees after a month or more with no trading activity.