I’ll cut to the chase – Rome wasn’t built in a day, nor is making money from trading Forex.
Forget all the smiling people on broker marketing phone apps making money hand over fist – it’s all bullshit, otherwise, we’d all be millionaires overnight!
It doesn’t happen – except for time travellers.
If you’re still reading, here’s a gentle but profitable path to becoming a successful trader.
First of all, accept that you need to learn your trade.
Pressing buttons on your phone is not learning anything, except learning how to lose all of your money!
Is there a better way?
Sure there is.
Demo account first, please
The School of Pipsology is the most popular forex trading course on the planet.
Maybe even on Mars.
The online course is made for beginners to help them learn how to trade the currency markets.
And it’s totally free!!!
Once completed, instead of opening a real account and filling your broker’s pockets with your hard-earned wages, first open up a demo account instead.
Most beginners will experiment until they lose their demo account money, or take trading positions so huge (because it’s not real money) they make totally unrealistic gains.
Either way, this isn’t the right approach.
If that is what you’re currently doing – stop
Go back to the beginning.
Demo trading must mimic real conditions
You’re going to need capital of $2,000 to trade – no more, no less.
It’s impossible to make real money on a wing and a prayer shoestring budget of a few hundred dollars – heh, but maybe you’re the exception?
Anything more than this amount, and you’ll lose it when you go live.
Financial success does mean making money on a live account, not demo.
But part of that journey means starting on a demo account first!
So what to do?
Open a demo account, and tell your broker to fund it to the tune of $2000 – the exact same amount you would be using in the real world.
Your demo account must comply with actual live trading conditions whilst learning.
If you think this is all a stretch too far, and that it’s only virtual money, think again.
Approach your demo trading with the same rigorous discipline as it was a real money account – and your transition from one to the other will be that much smoother.
Remember, financial success has to be earned.
Think like a trader – not like a sucker
Set your mind to think in percentage terms, never dollars.
Risk no more than 2% of your capital per trade.
Don’t have more than two correlated trades at any one time. This way you’ll still be in the game when others bomb out.
Lot size – which is known as leverage – is key.
Trade between 0.05 – 0.16 depending on how confident you are of finding a winning trade.
And that means you need to construct a strategy that works for you – your edge – and fits in with your lifestyle.
Give stop losses ‘air to breathe’ to avoid being stopped out early, but aim to keep within your 2% risk per trade.
When your trade starts losing, be prepared to cut losses early – and let your winning trades continue, with the additional support of a trailing stop.
That’s how to handle potential wins and losses without becoming emotionally involved.
Aim for a risk-reward ratio of 1 – 1.5 which means – if achieved – you only need to win 40% of your trades to breakeven, better than a coin flip.
Aim for consistency above all else.
By then you could have spent three to four months of honing up.
Confidence & consistency
Next stage is to become consistently profitable for a few months until you’re confident and have the $2,000 to finance your live account.
Yes, it’s not going to be easy.
You’ll probably find it scary at first – live account trading is no cakewalk.
Hell, it’s your hard-earned money at risk here. You’ll run into losing patches – but continue trading exactly the same as with your demo account.
How to rectify your losing patches
Reduce lot size, take a break until you’re up for another go.
There’s plenty of time to collect your thoughts.
Always keep a journal, and follow my mantra:
Do more of what works and less of what doesn’t.
And trading success is on its way.