Before Starting Forex

What Should we have do before starting forex

Mindset

It is very important for you to have the right mindset at the very beginning so that you
can persevere and eventually make money from trading. Frankly speaking, most new
traders that I have talked to thought of forex as a get rich quick scheme.
They are attracted to forex trading from those advertisements either online or offline that
promises them attractive income within weeks of learning forex. But I must break the
news to you that these are marketing gimmicks that are employed to get you to sign up
for a course that is worth thousands of dollars.
The truth is forex trading requires you to put in effort and time to learn and practice in
order for you to start making money. You may have to take months in order to start
making money from trading. In fact, I have met people who learn and practice trading
for 1 to 2 years before they start to make money from it.
Regardless of how long it takes, this is a lifetime money making skill that you will have
if you take time and effort to learn and practice. Once you are able to trade profitably
for the first month, you will forever be able to make money from this skill.
Therefore you have to adjust your mindset to treat forex trading like a business where
you need to put it time and effort to make it works and stop thinking that you will make
money from it within weeks.

Working Strategy

The next factor that can make you a profitable trader is a working strategy. Without one,
you will never be able to make money from trading. Therefore as a new trader, you must
start to look for a reliable strategy to use and then practice it on a demo account.
The problem with most new traders is they tend to practice trading on a live account
with real money. Most of the time, they will lose all the money and eventually give up
on forex trading. My personal suggestion is for you to start trading with the strategy that
you have learned on a demo account until you are able to make profit with it for 3
consecutive months.
Once you are able to make 3 consecutive months of profit with your strategy, it means
that you have a working strategy on hand and you can now move to trade LIVE with your
money. If you do not have a good strategy on hand, do not worry as I will teach you 2
working strategies later on in this book.

Discipline

This is another factor to becoming a profitable trader. There is no point for you to have
a good and working strategy if you do not stick to it.
You may be wondering why anyone will not stick to a strategy that works. THE URGE
TO TRADE is the number one reason why a trader will not stick to his/her strategy.
Most traders find themselves always wanting to get into action which is entering a trade
and therefore tends to enter trades that are not 100% according to their strategy.
For any strategy, there must be a set of rules for entry and for those traders who likes to
get into action. They will tend to tell themselves that the trade looks like what the
strategy wants but it did not fulfilled 100% of the rule.
For a profitable trader, they will not enter a trade if it is not 100% according to their
trading plan and this is DISCIPLINE. There is no way anyone can help you with
discipline except yourself.

Money Management Skills

The last factor to becoming a profitable trader will be proper money management. By
money management, I am referring to the amount of risk you are taking per trade and
how you should protect your capital while trading.
You should not risk too much of your capital per trade. The highest I have ever heard of
is 5% for a professional trader. Therefore I will urge you to stick to 2 to 3 % if you are
pretty new to your strategy. When you have a better record on how your strategy works,
you can then increase it to around 5%.
As for how to protect your capital this is done by partial exit of your trades or by
adjusting your stop loss to breakeven when the price has moved certain pips in your
favour. In this way, your account exposure will reduce and therefore your capital is
being preserved. I will talk more about this in the chapter on Proper Money
Management Skills.