Last Updated on Tuesday, June 15, 2021 by WorldTechpedia
Hi guys, this blog post is going to be a little bit of an introduction to my forex trading journey. And then things I didn’t know when I first started. Because, I hope you guys stay tuned and enjoy this post. And, let’s go ahead and get into it.
Being a college student, I had to be dependent onto my parents. And it just made me realize how financially dependent on am on my parents. And because of that financial dependence, I have to live at home. I am not able to have my own experiences and do things that I would like in life. So I’m going on this journey of financial independence, I can live the lifestyle that I want to live, I can become financially independent, and I can one day can afford my own apartment and one day travel. Because, that is really my goal in life and to see the world.
Besides at the state that I am in now, I obviously can’t do any of that. Then I also figured out that because so many people lost their jobs this year, or got laid off or lost hours of work that I never want to be reliant on somebody else for making money, or for my lifestyle, that I want to be in complete and utter control of my life. Also, I don’t want anybody to be able to fire me at the drop of the hat, or to have a job one day and not have a job the next day.
My Research on FOREX
So I eventually do want to work for myself, I want to be an entrepreneur. And in order to do that, I’m going to need money while these things that I want need money. And I had to sit back and think how can I achieve my goals? How am I going to be able to do what I want in life.
And I heard of something called forex. But I never knew what it was because I just saw charts looked at and I was like it’s risky. There’s no way I could do that. But for some reason, because of everything that happened this year, I heard of forex again. And I asked a couple of my friends, you know what forex trading is? Should I try it and honestly, my friends told me to not do it, because people can lose a lot of money. And effort is the word for it.
But for some reason, I wanted to do my own research. And I started researching and more and more, it just seemed like something that I’m wanting to do and that I needed to do in order to reach my financial independence goals. So I started doing my research, and I started learning more and more about it. And I’m like, this is something I want to do. So I started officially in May, I started my journey in May. And it’s been a couple of months. And I have learned a lot. But there’s a lot of things that I wish I knew when I first started. Like:
- I didn’t even know what charts look like.
- I didn’t know what a pip was what a lot was, I just dove in headfirst not knowing anything about what forex was. I’m honestly glad I did it.
- Once I started, I knew there was no looking back. Even if I wasn’t successful, I was going to try and try again, I’m still going to try and try again. Because I am nowhere near an expert.
Also Read ➤ OTT as an Income Platform
How To Start with FOREX Trading
I’m a complete beginner with this, I only started a couple of months ago. So I’m really excited to go on this journey. So there were a lot of things I didn’t know when I first started. I’m going to share those things today. It’s definitely fun to dive in headfirst not knowing what you’re getting yourself into. But also at the same time, it’s good to be educated before you start doing something that could be potentially risky. Whenever I’m trading, whenever I’m journaling is super super important because it keeps me on the path toward my goals.
Trading is truly a lifetime skill and you have to keep learning. But once you learn this skill it is something that nobody can ever take away from you or job can be taken away. But the skill of actually knowing how to trade forex can never be taken away from you. And that is something to always keep in mind. Second, you want to give yourself time and have patience. Certain topics took me a long time to grasp it. It just was such a foreign thing to me. But once you get it, you get it, you just have to give yourself time.
Don’t rush yourself trading is an emotional roller coaster. Another thing is, is that if you’re friends with traders, you should never be comparing your profits to their profits. Because profiting is easy. You can get lucky you can take signals, but learning the skill, learning how to trade, learning how to understand the markets, that takes time, that takes patience.
Grow Your Account Size by Trading
And that’s something you can never compare to somebody else. It’s about the skill. And it’s not about how much money you’re making, ultimately. So in order to start trading, you don’t need a lot of money, you can literally start with a minimum of $100. But the thing is, with that money you’re trading with you have to be completely on attached to it. You have to be able to lose the money we’re trading with at any moment of time, because that’s how crazy the markets are. If you are emotionally attached to them on your trading with you start making stupid decisions. You start emotionally trading, and it just eventually leads to losing a lot of money. And that is not what we want.
I really wish I knew at the beginning to look at the percent increase in your account and not the dollar amount. Because you can make $5 and think, oh, it’s only $5. I just spent two hours analyzing the charts and only made $5. That’s nothing, I’m not making any money. But if you made $5 on $100 account says that’s a 5% increase. And if you make a 5% increase on $100 account, you can make a 5% increase on any account size. You just have to apply what you did on that $100 account to a larger account. So you can make a 5% increase on $1,000 account, a 5% increase on a $10,000 account, and ultimately a 5% increase on $100,000 account. You just have to build your way up to there. But you’re good to go.
Key Essential is a Discipline
You want to be especially disciplined when you start forex trading. Specifically, when you start making money. Once that money starts coming in, you might be tempted to take it out and start spending it but you want to keep it in your account. So you can grow your account size, and eventually multiply your account and use that money to make you even more money in the future. This requires extreme self discipline, extreme self discipline, but it is so worth it in the future. Because the higher your account size, the more money you can make. And that is what we want, we just want to multiply our account so we can multiply our earnings.
And one of the most important things when works trading is to create a trading plan. In this trading plan. You want to include why you trade what you trade, how you trade and when you trade. So I will go into this deeper in the future. But for now, that’s what you want to include. And you also want to include rules about whenever you place a trade.
So whenever you’re looking at a trade, you want to make sure it has certain things that you always check off before you place it. And if your rules align and all your rules are checked, then you can place a trade but you don’t want to trade suddenly, or without looking at certain things and checking certain parameters before we place this trait. Another big thing with trading is to always have a risk reward ratio because one trade can wipe out your entire account.
Another thing with having a risk reward ratio is that you can lose more trades and you win. But ultimately, you can be profitable if you were following proper risk management. So, this is something amazing about trading. And that’s also why you shouldn’t freak out too much about your loss. And you can only learn from them. But you shouldn’t freak out or get emotional about them. Because if you’re following proper risk management, you will be profitable.
One thing that was super tempting, especially with me is to hop from one strategy to the next. But this is not good at all. You want to learn one strategy and you want to learn it really well you want to master it, and then try taking on another one. Because if you try to hop from one strategy to the next, the trade you will be placing will be very inconsistent. And being inconsistent, will lead to inconsistent results. And you want to be consistent with trading because consistent actions will lead to the proper results.
So just find a strategy you like and master it when I first first started, I used to zoom in really, really close to the charts, like you’d see each candlestick. But no, don’t do this, do not do this. You want to zoom out and see the overall trends. The overall trends are your friends, you want to understand the big picture of the markets and the currency pair that you are trading. You want to know what’s happening on the day, the week the month wants to see the big picture so you’re not trading against any trends.
When to Trade?
Also keep in mind that you want to stay away from trading on Sundays, Mondays and Fridays, you want to only trade on days that you feel comfortable with trading. And for me, that’s Tuesday, Wednesday, Thursday, is different for everybody. But just find those days that you feel a little bit more comfortable trading and trade on those days. And this also means that if you’re not feeling good, one day, and you don’t feel like trading, do not trade, you want to live to trade another day.
You do not want to blow your account because it was a bad day for you. You only want to trade when you feel comfortable. One thing I’m really, really thankful that, like changed within me when I started forex trading is that I became more knowledgeable about what was going on in the world. Because I started reading the news. It’s crazy how much a government official speaking will change the markets. I remember one time I watched Trump speaking and as he was speaking, the markets were going down being updated on the news and what’s going on in the world is super, super important because the news trumps everything.
Get up-to-date with News
If something big is happening in the world, you could have done your analysis and seeing that there was a trend downward. But the news can cause something to go up just like that. So you don’t want to only focus on technical analysis, focus on your fundamentals, focus on what’s going on the world. Stay updated on the news, get the news app, set your notifications, look at forex websites that talk about news that is super, super important, just stay updated in the world, so you don’t end up trading against the news.
Another thing is, though, it may be tempting to stay away from indices, because they’re super, super volatile, and move really, really fast. It’s honestly scary how fast they move one week that can blow your whole entire account, just like that. That is how crazy indices are and as a beginner you want to stay away, you can definitely build yourself up to them. But if you’re first starting, it’s not something you want to do. I have tried trading indices and I have just lost money. At first I will be making a couple of dollars here and there. And then I’ll enter again and boom, all my profits plus more gone just like that. So I’m working my way up to indices as a beginner, I just don’t recommend it.
And one of the biggest things with forex is you don’t want to over leverage, you want to build your account over time and build on small wins rather than winning big on one trade idea. It’s really, really easy to be tempted to put a huge lot size is 0.5 light size, when you think your trade idea is 100% going to happen that it’s good that you know this is going to happen. But you just want to build the consistency and build your mentality with trading that is not a get rich quick scheme, just know that it’s going to take time and over leveraging is not the way to make money with forex.
Trading for Money!
If you need money right now, don’t start trading forex, because forex takes too much time to learn and to master. If you need money right now, it will lead to you losing a lot of money in the markets because you’re in a place of desperation and you’re emotionally attached to any money that you trade with. So if you do feel like you need money, right now it’s better to get a job, or to find some other way of making money because forex trading, when in desperation is not a good idea. And another really, really, really big thing I do know is to not trade emotionally.
I remember when I told my parents, I started forex trading, they thought I was gambling. But no, it’s not gambling at all. If you do your analysis on every trade you do, every trade you enter into needs to be based completely on analysis, not on a feeling where you think the market is going to go. And when you base something on analysis, you feel a lot better whenever you see the numbers that may show. So I may enter a trade and it goes immediately into the negative and it’s dipping and dipping.
But because I did my analysis, I know that I knew where the markets were going to go. I was 90% certain that the markets were going to go a certain way. So I don’t get tempted to pull out my trade. But instead I wait for it to hit stop loss or take profit because I did my analysis. So if it doesn’t go my way, it doesn’t go my way. But at the end of the day, I did my losses and I was 90% sure it was going to happen. This also has to do with risk management as well.
So just do your analysis, do proper risk management. And it’s okay if your trades hit stop loss because you were consistent with your actions and it will all be okay in the end. You will be profitable at the end of the week. If you place things So I am still a beginner I’m still on my journey. I’m still learning a lot every single day about forex trading in the foreign exchange market. But I’m really really glad that I took the time to learn what I have so far and I hope some of the things I said in this blog post help you guys out there if anyone has any comments, or questions or tips for beginners like me, or any other beginners out there, please leave them in the comment section down below that would be very, very, very helpful.