Forex Trading made simple…

FX Training Plan

Trading Forex is exciting when you are winning and frustrating when you are losing. Once you have mastered your emotions trading is no longer an experience of emotional highs and lows, more a choice of enter or exit, buy or sell. To develop winning methods in trading Forex we would recommend the following approach.

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  • Set a sensible timeframe in which to devote to learning and developing your trading. If you have a demanding career this may take longer than if you have a 9 to 5 job. Typically expect 1 to 3 years to cover most aspects of trading Forex; however you can start understanding the trading terms and market patterns in a matter of days/weeks.
  • Focus on trading medium to long term trades to begin with. This will be less stressful and allow you to gradually build your confidence. Swing trading is ideal for the beginner.
  • If you want to trade shorter timeframes such as Day Trading, look into doing this only when you have made profit from swing trading for a year.
  • Get connected with other traders and learn as much as you can about Forex.
  • Be selective. Trading exposes our character weaknesses. Use the information, strategies and trading styles that you can understand and apply without too much effort. If you are constantly questioning and second guessing what you are to do then stop trading.
  • Before you even open a trading account with your own money
    • Gain some knowledge of trading, risk management and strategies
    • Watch and observe the live Forex market with free charts (such as Netdania.com)
    • Apply the knowledge you have to the live charts to get a feel for where to buy and sell
    • Read and study as much as you can. No trade Guru is right all the time!
    • You may chose to focus on one currency pair to get a good feel for its character and mood swings!
    • Open a demo account to apply your trading strategies to the live market without risking any of your own money.
    • When you have doubled the size of your demo account you are ready to risk your own money on the live market.
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  • Be prepared for your own mood swings; Ecstasy when you win and Depression when that winning trade becomes a losing trade. Recognise this and challenge yourself on how to manage and control your moods. Realise that often it is your feelings of Greed and Fear that take over your well planned trades to deliver poor results.
  • Control your Risk:
    • We would recommend opening an account of only a few hundred dollars and trade for pennies per pip
    • Expect to lose this account and refinance for another few hundred dollars and trade again
    • By the time you have emptied 2 accounts trading for pennies you should have the experience and ability to manage your emotions
    • Once you have doubled the size of your small live account you can increase its value and trade larger amounts.
    • Everyone will have a risk limit so scale up your account size according to how much you can risk on a trade without feeling stressed
    • IT IS CRITICAL TO PROTECT YOUR CAPITAL
  • When you have consistent profits in your opening account it is your choice on how much you increase its size so you can use it to buy all the toys you want!
  • Only risk 1% of your account per trade
    • Remember: If you lose 3 trades in a row, stop trading for one week and go back to demo trading only, to fix the problem.
    • If you lose 5% of your account, stop trading for another week. As before go back to demo trading and study to fix the problem.
    • If you lose 10% or more of your account stop trading for a month and take a holiday to clear your head. Go back to demo trading until the problem is fixed. Do not trade until you understand why you are losing and can overcome the problem.
    • In most cases losses are caused by our impulsive/compulsive behaviour which overrides our trading strategies. When you have a losing trade, take a break from your trading screen for at least 30 minutes. Do something totally different to trading…go for run, read a fiction novel or watch TV, but not the news and especially not trading news. This will help clear your mind of negative thinking so that you are fresh when you return to the screen. This will limit the probability of you entering one losing trade after another – also known as revenge trading. Do not fear! The market will still be there when you return.
  • IT IS CRITICAL TO PROTECT YOUR CAPITAL