Live currency trading on the foreign exchange market (Forex) is often misunderstood by those looking for a way to get rich quick. This has led many people to lose large amount of money in a short amount of time, causing otherwise interested individuals to be sceptical about their own ability to profit from currency trading.
Greg Secker, founder of currency trading school Learn to Trade, has been successfully trading for a long time and teaching others about how to reduce risks and maximise returns. Greg is passionate about empowering people to realise the potential they have if they take a careful and well-researched approach to trading.
Greg says that “the classic mistake people make is that they underestimate the Forex market and how quickly things can go awry without the right expertise backing up their strategy,”
The following tips are what Greg thinks is essential for you to know before pursuing Forex trading.
1. Temper your expectations, anticipate pushback
According to Greg, “The most important skill a trader can have is anticipation – having an understanding of what’s likely to happen.”
“Anticipation in currency trading is king,”
While understanding basic concepts like the difference between trading orders and how leverage works, Greg argues that your outlook and ability to be flexible in how you respond to market changes is more important than the homework you’ve done prior.
Greg says, “There’s a fine line between justifiable confidence and overconfidence. Over time, you’ll have a greater understanding of when to trust your gut and when to make carefully justified decisions.”
2. Watch someone else do it
Greg has said consistently that the fundamental of successful Forex trading is knowing “what to do, and when to do it”.
New Forex traders need expose themselves to experienced practitioners and watch everything done in real time. According to Greg, there’s no better way to learn how to trade than watch someone else do it and practise consistently in your own time.
3. You’ve consistently traded successfully with a demo account
In the world of currency trading, demo accounts are a great way for newbies to test their skills without any risk. This enables them to get a quick feel for the process, preparing them for the high pressure of their first day of live trading.
Greg says, “No amount of demo practise is going to make you a master on day one, however, you can use training materials to minimise risk when you finally go live,”
“With that said, only you will be able to reflect on your preparedness to take your trading live.”
In order to assess your effectiveness as a demo trader, you need to analyse your overall profitability. Generally, you want to ensure that you’re profiting from the majority of your demo trades before going live.
4. Leave irrational thinking behaviours behind, understand the power of fear
Greg says, “Fear overrides all rational thinking, but can be your best friend when taken advantage of.”
The big stock crashes that make headlines and create the stereotype of a panicked trader watching their money disappear are based around the herd mentality that dominates currency exchanges. Basically, a build-up of uncertainty over a crash ends up being what causes the crash in the first place – becoming a self-fulfilling prophecy.
According the Greg, “The best traders are able to step back and anticipate how markets are going to respond to sudden changes, leveraging doubt rather than becoming a victim of it.”
5. Understand your chosen platform inside and out
Greg points out that “No matter how much theory you’ve learned, you need to be proficient with the platform you are using so that you can apply your knowledge effortlessly,”
“The less complicated you can make trading, the more likely you will be able stick with it and achieve success.”
Greg goes on to explain, “If you’re familiar with a way of doing things with your demo platform then you want to use the same or a very similar one when you go live.”
Greg’s trading school, Learn to Trade, uses SmartCharts as its preferred trading software. Its cutting-edge design allows traders unparalleled control to manage their behaviour and record habitual patterns, allowing them to maximise the effectiveness of their strategies.
Greg added that “With tools for real time analysis and automated risk managements, SmartCharts is an excellent platform for new and experienced currency traders.”