The First Steps As A Forex Trader

Did you know this?

The flexibility of the forex market allows the Forex Trader to trade in small size, offering a third step after paper trading and simulated accounts before trading with a bigger lot or more per pip. So you have…

• A PC

• Fast internet connection

• An account with your preferred Forex Broker

• Have been paper trading to get to know the market fluctutations as your first step to life as a Forex Trader. Paper trading means that you do not actually execute your orders, but you only “bookkeep” them, testing on paper what their results would be.

• OK Forex Trader, whats next…?At the next level you can trade in a simulated account. This is similar to paper trading, as you are not trading with real money, but just testing the result of your strategies. As a Forex Trader you will also be learning how to use the Forex Broker platform so you are at the same time training yourself in dealing with order execution issues. Simulated or demo accounts means the Forex Tader are catered for by many Brokers.

How does a Forex Trader test his/her strategies and abilities without paying (or paying too much) for his/her mistakes ?

If you trade your strategy for some time with a simulated account, and everything goes fine; you would expect that real trading should go fine as well. Still, there is an issue you did not have to deal with: your emotions and as a Forex Trader this is very important.

Yes your emotions will come into the game only when you trade with your real money.

So why is that then ?

Because they often force you not to follow the rules of your trading plan. When you trade with your hard-earned money as a real Forex Trader, emotions can make it hard to keep the necessary discipline needed for each trade.   Fear, greed, excitment, ego, elation, disappointment, nerves etc all play a huge part in being able to execute trades as a Forex Trader.

Oh it happens to everyone…and before you ask, yes I have wrestled with this too!

So, how to deal with the emotional issue being a Forex Trader ?

There are ways to learn this which you must to be a successful Forex Trader, but which will be covered in more detail later. But there is no substitute for your own direct experience as a Forex Trader – it is much more valueable. However, the experience can be expensive, of course. A solution is to trade with real money, but in a very small size. This is always a good idea at the beginning. Start small, gain experience and then increase gradually your trading size.

So by trading small you can understand how you deal with trading with your own capital and see how you can improve. One way to do this is to note down in your Forex Trader journal how you did. You can then make your own assessments of your progress.

You might object that, if the trading size is too small, your emotional involvement will also be small, so the aim of putting emotions into the game is missed. Partly, as a Forex Trader this is true. The forex market gives you big flexibiliy about your trading size. Start small by opening up an account in the order of $300 and see how you do and don’t forget to write everything in your Forex Trader journal.

This flexibility can offer an advantage for traders who want to gain experience before moving forward and is essential for the first steps as a Forex Trader.

Hope you found that useful. There is a Q&A section on my web site www.tradeforexfromhome.com where you can ask questions about being a Forex Trader – so ask away!

Good trading,

Annabel

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