How to become a Forex trader

Are you convinced that you want to become a Forex trader? Surely, the first step is to decide whether you like to become a forex trader and make money. You must decide if you will do this business full-time job or you want to try it and see how it works. Please note that if you don’t take it seriously and you treat it like a hubby, the result might not be serious too.

If you want to make money through currency trading, make a serious decision. Forex is not a game; it makes money.

After making a firm decision, the next step would be to learn what Forex is. Maybe, so far, you have spent a lot of time and money to read several books, articles, and DVDs, but you are not profitable. Maybe the things you have learned did not help you make money or even some of them made you lose money. What do you have to learn to become a currency trader? Here are the basics things you must learn:

  • Currency market and currency pairs

The currency market is where currencies are traded against each other. It is where you can also buy and sell the currencies against each other.

Since you pay a currency to buy another one, platform developers have placed them in pairs to make it easier. For example, EURUSD is a currency pair. When you buy EURUSD, you buy Euro against the USD. When you sell EURUSD, you sell Euro against the USD.

  • Fundamental Factors

Everyone who wants to become a Forex trader should be able to understand the factors that make the currency market tick. Currency prices fluctuate as a result important events and decisions that take place in the countries where the currencies are mostly used. For example, changes in interest rates or policy-making in the United State affects the exchange rate of the USD. So, it is important to know what currencies you want to trade and what affects them the most.

  • Price Charts

Learn about the price charts and the way it works. Know the price charts and time frames. Learn the technical analysis, no matter what trading system you will have. A trader should be able to locate the support, resistance lines and levels. Understand patterns like head and shoulders triangles, double tops and double bottoms. It is also recommended to learn the candlestick signals and patterns.

Candlesticks are very helpful in understanding the psychology of the buyers and sellers, and the future direction of the price.

While you learn the technical analysis, know how to calculate your position size and your position risk/reward ratio. You should learn how to take positions and set a stop loss and target orders. Learning these things will not take you more than a few days or a maximum of few weeks.

  • MetaTrader4

Metratrader is the most famous and common trading platform. It is user-friendly, and it has everything you need to analyze the price charts and find trade setups. To become a Forex trader, you must learn how to use this platform. Even if your broker does not support MetaTrader, you can use the MetaTrader of a different broker to analyze the price charts and use your broker’s platform only when you want to take a position. Tenkofx offers the MetaTrader 4 as a primary platform for trading. It takes less than 5 minutes to download and install the Tenkofx MetaTrader 4.

  • Demo Account

After learning the above basic things, choose a trading system and practice it. The best trading system is the simplest one. Do not choose complicated trading systems; they only make you lose. Basic and traditional trading analysis is the best trading system. Once you’ve passed the above stage, open a demo account using the Tenkofx MetaTrader 4 and practice your trading system. Here is a tutorial on how to do that.

Your demo account size and leverage should be the same as the live account you want to open in the future. Do not open a $50,000 demo account if your plan is to open $1000 live account. Trade with your demo accounts for at least three months.  

If your account and trades were positive during the first month, open a second demo account with the same size and try to repeat what you have done in the first month. After the first month of success, you must repeat the process for the third month. If you could repeat your success for three consecutive months, then you are probably ready to go live.

You must boost your confidence with demo trading before opening a live account. This means you have self-discipline and you can control your emotions. It also means you have mastered your trading system.

Do not behave or act in a different way when trading with a live account. Stick to the same trading system and trade with money you can afford to lose, otherwise, your emotions will ruin your trades. You can make money every month when you have confidence in yourself and in your trading system. These are the basic knowledge to acquire in order to become a Forex trader.