How do I teach myself to trade forex and make sustainable income from it? This is one of the questions many people ask. Due to the high impact of economic situations in the world, forex trading has become one of the safe havens to many folks. As a result, knowing the answer to the question “how do I teach myself to trade forex” has become an invaluable skill to many people who desire one of the following:
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- The lucrative life forex trading brings or promises
- Flexibility and freedom just like in freelancing or when working from the house
- To be self-taught or want to learn by themselves
- To experience the reality of forex trading after being scammed by ‘’professed forex traders’
- To grow their expertise and proficiency in forex trading
These, among many other reasons have been the premise behind why some folks desire to learn the art of trading. Beside this, teaching oneself how to trade in the forex market provides ample opportunity where a beginner can maximize the user-friendly interface of a demo account, avoid the issue of paying a tutor who may never deliver on his/her promise, develop a personal custom trading strategy and maximize the numerous volumes of online teaching aids and guides without the interference of a tutor. Although this might involve having to go through a long learning route, it could serve as one of the most important decisions to people who love developing their skills by themselves. To answer the question “how do I teach myself to trade forex”, the following steps can be taken as a guide:
Table of Contents
How do I teach myself to trade forex?
Start with Understanding the Basics of Forex Trading
One of the most important step to take if you want to teach yourself how to trade forex and make money from it is by educating yourself with the basics of forex trading. This is because, you need to study and understand what the forex market entails before diving into it. In studying about the market you will read stories from successful and struggling traders, you will get to understand their challenges, failures, strategies and success stories.
This will broadens your mind to accommodate the complexities in the forex market and prepares you to develop an effective means of tackling the challenges as well as maximizing the potentials in the forex market.
To understand the basics of forex trading, several online platforms can be utilized such as YouTube, and other online sources such as BabyPips.com, Forex resources. etc., These platforms offer a wealth of information, tutorials, and resources to help individuals learn forex trading by themselves. In addition, you can join online forex community on platforms like Telegram, Discord and Reddit as they provide enabling and interactive platforms for people to interact and learn by themselves.
Subjects or topics to study could include the following: what is forex trading, what is traded in the forex market, who are the market participants, how can I make sustainable money from forex, when is the most favourable time to trade in the forex market, trading strategies’, who is a broker, what is lot size, pips and risk management etc. these, among many other questions and topics can help a prospective trader to navigate the wide hills and valleys of forex trading especially if the trader wants to learn by himself.
Practice What Works for You in The Market
Create a timetable for practice; this is because a timetable will help in developing the following actions;
- Market analysis (analyzing market trends, news, and economic indicators to gain a deeper understanding of the market).
- Demo trading to boast practical trading skills using virtual funds to refine and back test strategies in a risk-free environment.
- Practice managing risk by setting stop-loss orders, limiting position sizes, and adjusting leverage to ensure that thevirtual trading capital is protected.
- Develop and refinetrading strategies by testing different approaches, identifying profitable trades, and adjusting the approach based on performance.
- Practice controlling emotions by staying calm and focused during trading, avoiding impulsive decisions, and maintaining a disciplined approach.
- Keeping a trading journal to record the trades, including entry and exit points, market conditions, and the reasoning behind each trading decision.
- Regularly review the trading performance, reflecting on what worked well and what didn’t, to make adjustments for future tradingdecisions.
For instance, Rob Booker, one of my famous traders helped me to realize that treating the charts like a full-time job is what makes a difference. On that premise, I decided to begin my trading time up at 8am and stay with the charts till 2 or 3pm. This helped me to master the trading environment as well as know when I should trade. In addition, just like staying with the chart seem like my secret to successful forex trading, other traders have also confirmed and reaffirmed what works and what does not work by simply creating an exclusive time for practice.
To achieve this, a demo account is usually suggested as the first step taken to ensure practical acquisition of knowledge for all self-taught persons. Since practice makes improvement, self-taught forex traders can engage in consistent practice to ensure their continuous improvement in their self-taught processes.
Learn to Write Down Valuable Lessons
In the process of gathering information during study, one of the most important things to do is to write down those valuable lessons and questions that can help you in your forex journey. Writing down valuable lessons helps in guiding a self-taught trader to look out for repeated patterns and specific market behaviour that have been talked about by other traders from different study platforms. Thus, by writing down these lessons, it makes it easy to know if an information is correct and should be used or discarded.
Define Your Expectations
Expectations can bring motivation or frustration. This is because, expectations fuels certain beliefs and yet-to-be realities. As a trader who is seeking answer to “How do I teach myself to trade forex? “ defining your expectation and putting it under scrutiny is a good step that will guide your forex trading journey.
A defined expectation can simply mean having a clear understanding of what you want to achieve in your forex trading journey. This may include the specific goals, risk tolerance, and the strategies you will use to achieve those goals. This clarity helps a self-taught trader to stay focused and motivated, ensuring that his/her trading decisions align with the overall objectives and are guided by a well-defined plan. When this is not in place, it can lead to a lack of direction, confusion, and impulsive decisions, which can result in poor trading performance, emotional stress, and ultimately, a high risk of financial loss.
Following the advice of one of my mentors, an undefined expectation is the peril of so many traders. When people trade for fun, they lose sight of what they ought to avoid, gain or retain. This goes to say that while expectation is a great motivation, it is the single most crucial factor that will keep you on the charts for days. While many give up and say that forex trading does not work, or pay, a defined expectation will enable you grow into the different phases of trading. Therefore, by having a defined expectation, you can avoid many pitfalls and create a solid foundation for your forex trading journey, allowing you to make informed decisions and achieve your goals with greater confidence and success.
Start With What You Have
This is one of the most important aspects of learning how to trade forex by oneself. Here, a trader can leverage on existing information from personal experiences and some online resources during their practicing moments in the forex market. In addition, it could mean that trader can begin with some basic requirements they can afford such as – a smart mobile gadget such as a phone, and a small tradable account size.
Beyond saving the stress of stretching beyond one’s capacity, it encourages a trader to grow and develop with what they have. Following the sentiments of many ‘’professed professional traders, beginning with what a trader has should be a relative factor that should consider the necessary drawdowns in the market. While this can breed fear and the tendency to promote losses, it indirectly tells that one needs to be on a certain footing before venturing into forex trading. As much as this is a valid point, it is not completely realizable as it eludes the growth factor in trading.
Similarly, beginning with what you have may imply starting a funded account with a little capital such as 20 USD. In many instances, forex tutors always encourage their trainees to begin with 100 USD, an amount that may seem quite unaffordable for many of them. When this happens, such trainees either loose hope of trading or go into debts because of misinformation.
Going through the practice of learning by oneself should be an adventure that encourages startups with little amount of capital. Also, it should encourage growth by following a define trading plan and work schedule. When these are not in place, success seems faraway. On that premise, one should be contented and stick to what brings pace and stability because, losses are part of the game and the journey may not be all rosy.
Evaluate, Learn and Re-Learn
Have a trading Journal to keep a record of your trading history. This will help you to evaluate your demo trading history, suggest area of improvement and inspire your learning process. By constantly reviewing your trading history you will understand the area of improvement and your strength.
Follow a Mentor
Even when you are learning to trade on your own, you need to find and follow a mentor that suit your trading style. For instance, you can follow the person on YouTube, learn from his/her trading set-up, strategies and style, this will inspire your trading journey.
Final Thoughts
Remember. trading forex involves risk; so it is important to follow forex with a disciplined mindset. Don’t stop learning, keep updating yourself with market news, trends and analysis. Forex journey can be very rewarding when you understand how to master your emotions.
Risk Disclaimer
Deriv offers complex derivatives, such as options and contracts for difference (“CFDs”). These products may not be suitable for all clients, and trading them puts you at risk. Please make sure that you understand the following risks before trading Deriv products: a) you may lose some or all of the money you invest in the trade, b) if your trade involves currency conversion, exchange rates will affect your profit and loss. You should never trade with borrowed money or with money that you cannot afford to lose.