Nobody was born a successful forex trader and like improving any skill, levelling up your forex trading takes time, persistence and patience. If you’re looking to kickstart your forex journey, you can invest in a forex course to boost your skills.
While you may lose money for a period in your trading career, you want to make sure that you’re upgrading your trading knowledge and abilities, so your forex trading can become a profitable venture. To help you with this, here are some tips on levelling up your forex trading abilities.
1. Define your trading goals
One of the first things you need to do as a trader is to have clear goals for what you want to achieve.
If you’re new to forex trading, you may have come into the market being confident in your trading abilities. But you may not have a solid plan or concrete goals for what you want to achieve.
When you’re setting goals, try to keep them realistic. Ensure that you are comfortable with the trading methodology that you’re using. You need to ask yourself questions such as:
- How much time am I willing to spend watching the markets?
- Am I comfortable holding positions overnight?
- Am I trading to supplement my income or planning to become a full-time trader?
Answering these questions and deciding on your trading strategy will help develop a comprehensive trading plan and define clear, achievable goals.
2. Simplify your learning process
Learning to be successful at forex trading takes time, and while you’re learning, it’s essential to focus on achievable targets as you move through the learning process.
This is a typical step by step learning process when you’re levelling up your forex abilities:
- Learning the basics such as currency pairs
- Learn the software (TradingView, MT4/ MT5 and other platforms)
- Learn with demo accounts
- Find a reliable service provider
- Use the service provider’s resources
- Try out the support services of the provider
- Learn about trading strategies and test them
- Create a plan for reading news, following events and doing independent analysis
- Keep weekly track of your trading progress
- Start placing real trades
This is where a forex course comes in, giving you a leg into this industry and valuable advice to kick start your abilities.
3. Enjoy the process
Improving your forex trading abilities takes time, and the journey to improve won’t always be easy. Forex trading comes with the inherent risk of potential losses.
Every successful trader has tested out and validated their forex trading strategies for the long term.
When you’re trying to improve your forex trading abilities, try and learn to enjoy the process. Working towards your trading goals might sometimes feel frustrating but maintaining a commitment to learning and testing what you learn is key to forex trading success.
4. Have a consistent methodology
As you enter the market as a forex trader, you need to make sure you have an idea of the trades you plan to make and the methodology you intend on following. You need to know what information you need to confidently make an appropriate decision when deciding to enter or exit a trade.
Many traders choose to look at the underlying trends and fundamentals of the economy and look at charts to determine the best time to make a trade. Other traders rely on technical analysis to evaluate potential trades and investments.
This lets them identify trading opportunities by analysing trends from prior trading activities, such as currency price movement.
Whatever trading methodology you choose, make sure you stay consistent. Ensure that your strategy is adaptable to changes in the market.
5. Know the markets
There are different ways you can analyse forex markets, but there are generally three to four main ways to do it:
Fundamental Analysis – this type of analysis is used to analyse changes in the forex market by monitoring unemployment rates, interest rates, GDP and other economic data that comes out of countries.
Technical Analysis – technical analysis can take the form of both manual and automated systems. A manual system usually means analysing technical indicators and interpreting the data.
Sentiment Analysis – sentiment analysis involves looking at the percentage or amount of trades or traders that have taken a particular position in a currency pair. For example, if there are 90 traders in a currency pair and 60 are long, and 30 short, 67% of the traders are long on the currency pair.
Weekend Analysis – When the markets are closed at the end of the week, it’s worth getting into the habit of studying weekly charts to look for patterns or news that could affect your trade, particularly news surrounding the currencies you’re using to trade. Market conditions and economic events are essential to keep an eye on. Weekend analysis allows you to get a birds-eye view of the particular markets you’re interested in while the markets are closed, and you don’t have to react to situations as they are happening.
However, a forex course gives you incredibly valuable knowledge on what to look for and the best way to get this information. So you can trade more confidently, quicker.
6. Don’t risk your financial security
When you’ve opened your trading account, you need to remember that your money is at risk, so you should make sure that any funds you’re putting into your trading account aren’t essential to your day to day living needs.
It can be tempting to be gung ho with your trading, but it’s much better to only trade funds that you can afford to lose.
This is particularly important if you’re new or still getting accustomed to trading. Think of your trading money as holiday money, the money you save for a holiday you’re happy to spend, but you make sure this money isn’t essential to cover your day to day expenses.
Getting good at forex trading takes time, and these tips should have given you some pointers on how to improve your forex trading skills.
Remember to define your goals, analyse the markets you’re looking to trade in, test out the trading strategies you want to use, and get better at.