Online Forex Trading

Introduction to Forex Trading

When I started to trade forex, I had trouble finding useful information about it on the Internet. Looking back at my path toward learning practical things about trading forex, in retrospect, I still see that it was really difficult to start. Mostly I think it was due to the fact that I felt that everyone was saying and writing different things about trading forex. I didn't know who to believe and why I should listen to those people who tried to convince others that they were successful traders. When it comes to the Internet, I am always suspicious about the source of information. Anyone can say anything. More than often articles about trading forex are written by people who are merely trying to optimize their website so they receive more traffic from Google and other search engines. Also, I imagine it is fun writing about forex as if you are a successful trader, whether you are or not. I created these series of forex articles and tutorials that provide a rare sense of clarity to help readers gain practical information about placing trades, risk management and becoming an effective trader.

After searching the Internet and browsing a few forex books in a book store, I realized that to gain any experience trading in the foreign currency exchange markets, first I had to do the difficult task of taking my time and learning everything I could about it. Now, after several years of real-world trading practice and learning, I have decided to share my knowledge of the forex-trading science with other people. I know you are searching for this information on the Internet. After all, you've just found my website that is dedicated to aspiring forex beginners. I also know that you are not finding the answers to your questions, I remember feeling the same way.

Immediate Forex Strategy for Beginners: Slow Down

When you start learning about Forex for the first time, everything feels like it is moving very fast, just like the price indicators themselves. The excitement of thinking that you can simply enter as many trades as you wish, at any time you wish can be overwhelming and can trigger an irrational trade. Should I enter the trade right now? Should I buy the currency pair (also known as entering a long position) or should I sell it (known as entering a short position) instead? These are the questions that enter the minds of many-a-beginner forex trader. When we act on an impulse trading forex, our chances of success are very low. I will explain this in the other articles on this site.

This feeling of urgency has many reasons. Some of us are natural risk-takers and people who have that personality type enjoy being in a trade no matter what the outcome is. Trading without a plan by following our emotions is an activity that is going to end in a ruined trading account with even more powerful emotions of defeat. When that happens people think of never coming back to trading again because of the preconceived idea that forex doesn't work simply because it didn't work for them. But forex does work and is not impossible to leverage this market to your advantage. But only if you know how to take advantage of this extremely volatile market. My goal with writing these articles is to help at least some of the beginners not to lose a lot of money in this business. I also want to share the knowledge I had gained over the past years that made me a better trader. What I mean by saying a better trader will become more clear to you, as this kind of knowledge can only come with personal experience.

When we trade forex, we don't want to base our trades on emotional and materialistic choices such as the following.

"I am entering this trade because I feel it is going to play out to my advantage" "I am going to buy a big screen TV if this trade succeeds", or "After a series of successful trades I will be financially free".

Being a forex trader, like any other job, requires effort, focus and work. At first it seems like there isn't much work in clicking the mouse to make trades on the screen of your computer and anyone can do it. Right? But statistically, not many people succeed simply because that is exactly how they approached tradng, in a materialistic way, without even starting to learn the basic knowledge about the markets. And when the reality of constantly losing more money than the amount earned hits them, forex trading has lost its imaginary appeal it once had. Following basic human psychology, when our hands are not yet dirty, we don't know what it takes to keep our hands clean. And therefore we will jump into the uncharted territory as if we know what we are doing. Whateve path we take in doing so, eventually we realize that it is not as simple as we thought it was.

What I have described above, means that the trader is not prepared for the market and is simply making irrational decisions based on emotion such as excitement of big potential monetary gains. When we trade forex, as difficult it is to think about, we want to avoid basing our trading strategy on our emotions and what we want to do with the money we have not yet made! Moreover, when we are simply beginning to learn about trading forex, it is important to pay close attention to every detail and learn as much as one can before making your first trade in a real trading platform. Any situations where real, hard-earned money is invested into something uncertain should be taken seriously. Your goal would be to make sure that you do not lose your yearly savings and don't blow your account.

I really would like to make this point more pronounced: If you have just started learning about trading forex and are looking for information about forex, strategies, indicators, and so forth, slow down. Don't start trading with what we can call the real money. Start with a demo forex account. Many beginners start trading right away with the intention to quickly learn about these things and start making money today, tomorrow, or even two weeks or a month from now. Without in-depth knowledge of the forex market, making money immediately is not a possible outcome in this case. Slow down. Learn as much as you can from my articles before you deplete your account balance. And you will, if you are just starting to trade for the first time without knowing.

"Five minutes ago the price was 10 pips below what the price indicator is showing right now, I must enter the trade because it seems like the currency pair is starting to rise." - A beginner forex trader

This is an example of irrational thinking. To become a successful trader, you must understand the things that drive the charts and how they possibly create patterns and affect momentum. I explain these things in other forex tutorials on this site. All of this information is based on my own experience, my own successes and my own losses. Both of which have made me a much more effective and smarter trader today.

How I started to trade Forex

As a ruthless beginner I was very excited about the potential of making large amounts of money without walking out of my apartment. After saving nearly 10 thousand dollars working as a Software Engineer, I had quit my job and I thought I could make mountains of cash with Forex. I had just received slightly over 2 thousand dollars from my company as a 2-week worth of pay that I was entitled to by the rules of the employment contract. Like many others, I was just a beginner, learning all I could at the time, and trying to trade with the real money without any experience. It was September 2008. I wanted to take a break after working for over a year at an Internet company. After I quit, the 2 thousand dollars came to me in the mail as a surprise. A surprise that made me very excited because I could use that money in a real-life trading account. For the first time in my life I was ready to invest money in a currency market.

Where is the good advice on trading Forex?

Good advice on trading Foreign Exchange currency markets is hard to come by on the Internet. Many books have been printed about making money with forex and many websites and blogs have been posted on the Internet. But in my experience, as I look back at it now, I really can't recall actually learning anything that contributed to my own success trading forex, from the Internet or even from a few books that I read. Most blogs were written in a tone that didn't seem too serious. Patterns and strategies were explained in those blogs and forex websites, but none that I could actually implement in a real-world scenario. Or when I did, they simply didn't work even if I stuck with them for a period of time. However, I would like to share a gem that truely did make a difference on me as a currency trader. This gem is a book by Ed Ponsi, called FOREX: Patterns & Probabilities. It is a little expensive for its length (only 250 pages, including the table of contents at the end) but it is the most important source of information I had when I was starting out. Ed Ponsi has an easy to read style, he is at times humorous and more importantly, he presents step-by-step instructions on how to trade forex in different situations. I didn't start making money immediately after reading this book, but this resource has been invaluable to my own success. I also bought a second copy for one of my relatives. I have read this book at least 3 times and I recommend it to anyone who is looking for a place to start learning about forex. This book truely answers all questions a beginner may have.