Set up forex charting and trading platform
Firstly you will have to have your charting as well as forex trading platform set up. The trading platform will give you access to a demo forex or practice account as well which will be instrumental in the process of learning to trade forex.
Choose your forex trading system
The next step in this process will be to choose the forex trading system that you are going to use during this learning process. You can pick any forex trading system, but the system must have the following included:
- When to enter
- Where to place your stop loss
- Where to take profit or place your limit order
- Position size
The above mentioned points are non negotiable and it should be set in stone in the forex trading system that you choose
Set up your trading plan
The next step when learning to trade forex is to set up your trading plan. You have to write down or type your trading plan, and it should include all the details of your forex trading system as well as the following:
- Exactly when you are going to trade – for example between 8h00 and 11h00
- What are you going to trade – Gbp/Usd. Eur/Usd, Usd/Jpy, Eur/Jpy.Pick one, and only one of these pairs
- When are you going to stand aside and not trade? For example when major news events are released.
All of these details should be included in your trading plan. Most traders have no idea how important this step is, and that is the reason why most forex traders fail. Without a trading plan you are guaranteed to fail.
When you have a well constructed trading plan it is like a road map leading you to forex trading success.
Execute your trading plan
When your trading plan is in place you can start executing it on your forex demo account. If you are doing it this way and only use your demo account when you have your trading plan in place you are treating the practice account like a real account, and you are setting yourself up for success.
After you have traded successfully for 4 to 8 weeks on your practice account, and you are profitable for 6 out of the 8 weeks – then you can start trading with real money.
This is the correct process to learn to trade forex, and if you do it this way you have a very high probability of success