Before you learn the trading techniques, there are two very important things that you have to note:
1. Your Mindset
I always emphasize on this fact that making money through Forex trading is not as hard and complicated as what novice traders think. Almost all of those who start trading Forex, have a mentality and mindset from their past experiences. They “believe” that making money is too hard, because most of them had a hard time making money and covering their expenses. They “believe” they have to work long hours every day to make some money through Forex trading, because they really have been working for several hours to make money, day in day out, no matter what kind of business or job they had. They “believe” it is impossible to become wealthy, because either they never worked toward becoming wealthy, or if they did, they have never been in the right track, and they walked toward it while they believed they could not make it.
What happens when you start a new business with such a mentality? It will not work, and you will not succeed.
“Whether you think you can, or you think you cannot, you are right.”
Read the above sentence very carefully for a few times, and think what Henry Ford was trying to say. He doesn’t say anything about what you want to do, or the kind of business you want to start. He just says, if you think you can, then you can. If you think you cannot, then you cannot.
According to Henry Ford, the first and most important obstacle resides in your own head, not outside, no matter what you want to do, either you want to start a business, or learn something new. The outside conditions are almost the same for anybody. If someone can, and someone else cannot, it is because of what they have in their minds, not because of the outside conditions. The conditions are almost the same for both. The difference is that the first person “believes” that he can, and the second person “believes” that he cannot.
Change your mindset, and you will see that everything changes around you:
- I “believe” making money can sometimes be so hard in some kinds of businesses and jobs, but it doesn’t necessarily mean that it is the same in all businesses and jobs. Forex trading is a kind of business that makes money without having to work too hard.
- I “believe” I don’t have to work long hours every day to make money through Forex trading. In this business, I have to be wise, precise and disciplined, not workaholic.
- I “believe” I have everything to become a wealthy Forex trader, because those who have become wealthy, didn’t have anything more than me. Same markets, charts, platforms, and… . I just need to plan, set my goals and start moving toward it. A wealthy person is not someone who works too much. It is someone who takes his steps correctly.
Review and revise your mindset now, and read the rest of this article when you done.
2. Your Financial Situation
The second point I have to share with you before I help you to become a consistently profitable Forex trader is about your financial situation. There is something very important here that you have to know:
You can’t make a living through Forex trading. I mean, Forex trading cannot be known as your only source of income and full-time job. Forex trading is an investment opportunity to increase your wealth and make you wealthier. Therefore, if you don’t have a job and source of income, or, you have a job but your income is not enough, you have to establish a reliable and strong source of income first, and then use a portion of the money you make to make more money through Forex trading. If you don’t do this, focusing one Forex trading will be nothing but wasting of time and money. There are some strong reasons behind this: Trading Strategies Don’t Work If You Don’t Choose the Right Living Strategy
Also make sure to read these articles very carefully to open your eyes on some very important facts:
- The Easiest Way to Get Rich Fast
- How a Reliable and Strong Source of Income and Proper Investments Make You Super Rich
Before You Start Learning Forex
There are some important facts you have to know about Forex trading, before you start learning and trying it.
1. Forex Is Not a Get-Rich-Quick Scheme
You can become rich through Forex trading, but it is not a get-rich-quick program. To make money through Forex trading, you have to learn and master it and this needs spending some time and energy. It cannot be done overnight.
2. Forex Trading Can Be Risky
Forex trading can be risky if you don’t know how to limit and control your risks.
It is like driving. Driving is not risky by itself. The way that some people drive is risky. Similarly, Forex trading is not risky by itself. The way some people trade Forex is risky.
Some people start trading with real money while they don’t even know the basics. Most traders open a live account and start trading with real money, when they have not been able to have any success in demo trading. Unfortunately, many of them trade with the money they cannot afford to lose. The money that you cannot afford to lose is the money that you will be in trouble if you lose it. While a trader can risk and lose $10,000 without any problems, another trader will be in trouble if he loses $200.
Forex trading can be the best event of your life. But be careful not to change it to a disaster because of your own mistakes. Read this article VERY carefully and do exactly as it says: Still Losing in Forex?
3. Your Income Stops If You Stop Trading
Even if you can achieve to become a consistently profitable trader, which is a really big achievement, your income stops if you stop trading. It means Forex trading cannot create any backup or residual income for you.
Of course one solution is that you follow the longer time frames like monthly and weekly, and so you will only need to check the markets once every week and month. Therefore, if you cannot check the markets for some reason, you will be able to do it if you follow the longer time frames, because they don’t need lots of time to check. And the other good news is that unlike what most people think, trading the long time frames is extremely profitable if you master our trading systems: How to Be a Disciplined Trader
4. There Are a Lot of Things That Are Not Under Your Control
As a Forex trader, your account size, the risk you take in each position and sometimes your entry and exit prices are all you can control. The rest is not under your control.
For example, the price can start moving like crazy and you cannot get out of the market because of the broker’s sever overload and too fast price movements. Then, you can be left with an account negative balance which is your responsibility to be paid to the broker, otherwise they can prosecute you. There is no guarantee that you can always enter and exit the market at the price you want and you see on the trading platform you install on your computer. However, you can protect yourself by taking a reasonably small risk in each position, and by trading the money you can afford to lose.
5. It Is Not Clear When You Will Become a Consistently Profitable Trader
Although it looks easy to make money through Forex or currency trading when you look at the price charts, it is difficult in reality and most traders cannot become consistently profitable even after several years of learning and practicing.
Making money through trading has a very low success rate and only a very low percentage of traders will become profitable and will consistently make money through trading.
If you follow a reliable mentor who helps you to master a strong trading system, you will become a consistently profitable Forex trader within a shorter time. The good news is that you are currently in the right place at the right time, because here on our site, and through following our articles and videos, you will have a much higher chance to become a consistently profitable trader.
Read the below articles and see the stats:
- Following a Proven Business Plan Is the Success Key
- Some Forex Trading Facts and Myths You Must Know
6. Don’t Open a Big Live Account
It is a big mistake to open a big live account.
As I explained above, some traders open a live account even before they learn the basics. Some others do it after a while of learning and practicing with a demo account. They get excited after having some good trades with their demo accounts. Once they see the profits, they start daydreaming about the money they can make and the life that is waiting for them. So, they rush to open a big live account to become a millionaire as soon as possible. But in most or all cases, it is disappointment and regret that is waiting for them. They lose all the money. I have seen this so many times.
Even if you learn everything you need to know about Forex trading, and even if you succeed to repeat your success with a demo account for several consecutive months, still it is a big mistake to start live trading with a big live account, because trading with real money for the first time, triggers some emotions that a novice trader has never experienced before. You will experience a lot more fear and greed when you start trading with real money. This prevents you from thinking and deciding properly. You will make big mistakes and you get your family and yourself into big troubles.
If you already have a live account, please don’t trade with it before reading the rest of this article.
And, if you have for example $100,000 in your bank account and you want to open a live account, then don’t put the whole money in your trading account just because you think a $100,000 account makes more money compared to a $5000 account. That is true theoretically, but it is a big mistake practically and actually.
Read this article VERY carefully and do exactly as it says: Still Losing in Forex?
7. Know the Brokers
Before you open a trading account with a broker, make sure you know how brokers work and how they can cheat their clients: Some Forex Trading Facts and Myths You Must Know
Also, you need to learn all of these about brokers:
- 6 Ways Forex Brokers Cheat You
- How to Distinguish Between Market Maker and True ECN/STP Brokers
- The Difference of True and False ECN/STP Brokers
- Market Maker Brokers: Is It Bad or Illegal to Be a Market Maker?
- Stop Loss Hunting by Forex Brokers – What to Do?
What Is the Closest/Fastest Way to Become a Consistently Profitable Forex Trader?
Now, I assume that you have understood what I’ve explained above and you are ready to become a consistently profitable Forex trader.
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Now, let’s talk about Forex trading…
Here is what you have to do to become a consistently profitable Forex trader. I don’t know how long does it take you to take all these steps. It can be different from person to person. But what I do know is that if you focus on the below steps, and you don’t waste your time looking for other ways, you will reach the last step very soon. But, if you keep on fooling around, and trying different kinds of systems, indicators, robots, and…, you will have to spend several years of your life without getting any positive results. The grass is not greener at the other side.
1. Learn the Basics
If you are too new to Forex trading and you don’t know what Forex or currency trading is about, and how a trader decides to buy and sell currencies against each other, then read the below articles and watch the videos carefully. I don’t think it will take you more than a few or few days to do it. Even if you are not too new to Forex trading, but you have not become profitable yet, I recommend you to read the below articles and watch the videos just once:
- What Is Forex and How to Make Money with It?
- Understanding the Currency Pairs in Forex Trading
- Chart Analysis – Part One
- What Is Metatrader and How It Works?
The above articles and videos teach you the basics. Complete your knowledge by following the below videos and articles:
- Candlestick Trading – The Language of Japanese Candlesticks
- How to Trade Using Doji Candlestick and Bollinger Bands®
- Leverage, Margin, Balance, Equity, Free Margin, Margin Call And Stop Out Level In Forex Trading
- What Is the Proper Risk and Reward Ratio in Forex Trading?
- A Forex Trading Plan
- Money Management in Forex
2. Learn a Trading System
You have already passed this step (above). Candlestick patterns, Bollinger Bands® and some technical analysis is the trading system we use to analyze the markets and locate the trade setups. This trading system was not invented by us. We just learned and mastered it. Candlesticks have been used for several decades by professional traders and investors on any markets you can imagine, from rice and wheat to gold and oil. And Bollinger Bands that was invented by John Bollinger in the 1980s is a great complement for candlestick patterns. You have already learned about them by following the above articles and videos. It is up to you if you like to follow a different trading system, but keep in mind that our trading system and the way we use it is the best and simplest in the long run. Follow the below articles, to complete your trading system and tune up your mind to use it properly:
- Candlestick Trading – The Language of Japanese Candlesticks
- Bearish Engulfing Candlestick Pattern As a Strong Sell Signal
- Piercing Line Pattern: A Strong Candlestick Buy Signal
- Bollinger Bands Squeeze: What Is It and How to Trade It?
- Bollinger Bands Squeeze Trading Strategy
- How to Use Technical Analysis in Forex and Stock Trading
- How to Trade the Trendlines, Head and Shoulders, Triangles, Double Tops and Bottoms, Flags, Pennants, Wedges …
Are you done reading the above article? Have you practiced enough to learn how to locate and gauge the strong trade setups?
You are all set if the answer is yes. Now you can go to the next step.
3. Demo Trading
Have you learned how your trading system works? If yes, then it is time to open a demo account and start demo trading to MASTER your trading system. Follow the below articles and videos to know what you should do in demo trading exactly. Don’t underestimate this step. It is very important: Still Losing in Forex?
4. Live Trading
Have you been able to repeat your success with your demo account for 12 consecutive months at least, the way it is explained in the above articles?
If I were you, I would not rush to start live trading, and I would keep on demo trading for three more months. You must build your confidence through demo trading. Repeating your success for few consecutive months tells you that…
- You know how to set the stop loss and target orders, and you do this precisely, strictly and religiously.
- Your losses are small and controlled, and your gains are big, so that when your stop loss is triggered, your losses can be recovered by the next winning trades easily. This can be seen in all positions you take, not just in some of them.
- You don’t feel sad or stressful when your stop loss is triggered. You know that it is just a small loss that can be easily recovered by the next winning trade. The more you trade, the more winning trades you will have, and the number of your losing trades will become lower.
- You are disciplined enough to take the strong trade setups, and ignore the weak ones.
- You enter only when you are 100% confident about the strength and accuracy of the trade setup, and you easily skip the “questionable” and “doubtful” trade setups that don’t look perfect.
If you have really reached this level, you can start live trading. Open a small live account, and treat it exactly like you treated your demo account. Don’t try to make a living through your live account as soon as you start live trading for the first time. First, you have to repeat your success with your live account for few consecutive months, the way you did with your demo account. Build your confidence in live trading, and trade it 100% emotion free, as if you are still trading a demo account.
Do not open a big live account at the beginning. Open a small live account, keep on trading with it, and raise it, no matter if you have hundreds of thousands of dollars in your bank account. For example, if you have $100,000 in your savings account, just open a $2000 to $5000 live account. Trade with your live account until you double it, no matter how long it will take you to do that. Then withdraw the initial capital and leave the profit in your account, and keep on trading with your profit the way you have been trading with your initial capital.
Don’t think that it doesn’t matter if you lose it, just because it is the profit you have made, and is not your capital. Never think like this even about a demo account. You cannot afford to wipe out even a demo account. When it comes to serious trading, there is no difference between a live and a demo account, and a small or a big live account. You should have exactly the same discipline for all of them. This helps you maintain and improve your discipline, and keeps you from developing bad trading habits.
Keep on trading with your profit and raise it. Turn it into a huge capital.
It is possible to turn a small account into a reasonable balance that a professional trader needs. But, if you risk a big money at the beginning and you lose it, chances are you never become able to recover the loss, both emotionally and practically. Forex trading can make your dreams come true. Don’t turn such an opportunity to a disaster through making the mistakes that can be easily avoided. Let Forex trading be the best event of your life, not a nightmare that you won’t dare to remember.
If you start your Forex trading journey properly, and follow the right track that was showed you above, you can achieve the living you have always been dreaming of. It is very easy if you take it serious and follow the right track carefully and precisely. It is literally impossible, if you follow your emotions and mindset, and try to invent new ways. If you are serious to become a professional and profitable trader as soon as possible, I showed you the closest way above. It is up to you if you follow that way, or waste your time trying to find better or closer ways.
Read this if you like to know how it feels to be a professional full time trader: How Does It Feel to Be a Professional Full Time Forex Trader?