How to Learn Forex Trading — Get the Skills!
Over the last two decades, Forex trading has significantly increased its popularity and is now the most traded financial market. As a consequence, the learning materials on the topic have expanded, and it may be hard to understand where to start. In this guide, you will find out how you can learn to trade currencies. Study, experiment, find a coach, watch videos, and you will learn how to trade in the foreign exchange market!
You must know that only 5% of retail Forex traders regularly make money. Many companies want you to believe that trading currencies is easy and that you can start making money outright. Why do they want you to believe this? Marketing! They want to sell you something, profit from your losses, or earn commissions (spread). The reality about currency trading is that to learn it, you will need to invest time and effort. The good news is that with proper education and discipline you can join the successful 5%.
How to Learn Forex Trading
If you don't have strong fundamentals in currency trading, you won't probably last long as a Forex trader. You are likely brimming with enthusiasm to open a trading account and to start clicking buy/sell to see your account balance growing high, but think twice before doing it. Without clearly understanding how the market works, the terminology used, the players involved, and concepts such as leverage, risk management, and margin call, you could have your trading account wiped in the first trading day.
Luckily, thanks also to the increase of its popularity, you now have many options to learn currency trading. The ways to learn Forex trading are many. Among the most popular, we can find: online lessons, video courses, seminars, tutoring, and books. Since traders are all different, they all have different skills, personalities, level of knowledge, financial status, and personal life. While one method may be suitable for someone, the same method may not be the best option for someone else.
In the next paragraphs, you will see the strengths and weaknesses of the most popular learning methods, so that you could have a better idea about which one is best for you personally.
Forex Seminars and Workshops
Seminars and workshops are training events, usually presented by experienced and successful traders. The aim of these events is to show successful strategies and money management rules, or products to help you with trading, for example: trading platforms, indicators, and signals. Seminars normally don't cover the basics, and for this reason, they aren't perfect for beginners and instead are more suitable for traders with a good level of knowledge about Forex fundamentals and terminology.
Seminars have some very good advantages — you can interact with the presenter, asking questions, and meet fellow traders to exchange opinion and do networking. On the other side though, seminars are usually quite expensive and require your personal presence on the venue.
Tutors are experienced traders (hopefully) who decide to teach other people how to trade. Having a dedicated teacher is an ideal way to learn. You can absorb their knowledge and have your errors corrected. The tutor can show you secret strategies and teach you discipline to become successful. Having a mentor is probably one of the most expensive ways to learn how to trade currencies. Yet it could also be one of the most effective ones.
Videos are a very easy way to learn. There are many videos available on popular portals and they are accessible with any modern technology for free. Videos are more suitable for beginners because they are presented in a simple way, supported by images and explanations. The disadvantage of learning through this media is that it is hard to find good videos focused on specific topics and strategies. Furthermore, these can be created by everyone, so it can be hard to verify their authority.
Internet is full of online courses on any topic, trading and Forex included. There are many available for free, so that you could get started with the basics. There are also more advanced courses, which usually require you to pay some fee to access them. You can start without free Forex course before looking for paid ones.
Last but not least, there are books about Forex. Books are a traditional method to expand your knowledge. Many are full of useful information. While they are rarely free, the good thing about Forex literature is that it can be tailored to specific audience (beginners or advanced traders) and can focus the content on specific topic. For example, fundamental analysis, technical analysis, price action, risk management, psychology, and so on.
The information is usually well-organized and presented with a logical sense. While many books are very good, unfortunately, not all Forex books are well-written or contain helpful information. You can check out our book reviews to find the best ones and see if some book isn't worth your time and money.
One of the first rules in investment and wealth management is don't keep all your eggs in one basket. Diversify! You should do the same when learning Forex — don't limit yourself to learn from one resource only. You will be able to achieve the best results using different methods: watch some videos, follow some courses, read a few books, and so on. This will help you to see different perspectives and understand multiple opinions. Are you excited about Forex trading? Learn how to do it, but remember, you need to end up among the successful 5%!
Get started learning how to trade in the Forex market. Pick some of the above methods and begin learning. When you understand the basic logic and jargon, you can install MetaTrader and open a demo account. The practice phase with a demo account is a part of the learning process for beginners and experienced traders alike. In Forex trading, like in everything else, you never stop learning!