Forex: A Steep Learning Curve

Filed under: Learn Forex Trading |

When learning to trade the foreign exchange markets, you will inevitably experience a very steep learning curve; so you should be prepared for this.

 

To begin with, you will need to get to grips with the basics. If you have traded stocks, then this might be a little easier, because you will be familiar with things like stop losses and trailing stops. However, one thing that will be new, regardless of whether you have traded the stockmarket or not, will be the concept of ‘lots’ and learning to calculate your position sizes.

 

Once you have figured out how to calculate your position sizes, you will need to learn how to use a good platform such as MT4 or MT5. Then, once you have got to grips with all of this, you will then need to start the hard bit – that of learning to actually trade the forex markets.

 

There are a number of different methods that can be employed to trade forex – far too many to mention here. However, some include long term trend following systems, and other include more short term methods, such as using price action signals at significant areas of support and resistance.

 

Other things that will become a factor once you start trading forex will be the psychological effects of trading with real money. You will need to get to grips with a strict regime of money management, and you will also need to consider the implications of the risk reward scenarios on your trades. If you do all of this, then you just might have a chance at being profitable in the forex markets. But you will need to have a good edge in the market. This is because the spreads eat up most of your edge. This is the real enemy in the markets. And until you realize that, you are never going to get anywhere in the long term.

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