The Best Way to Learn Forex Trading

2020.11.20 2020.11.20 The Best Way to Learn Forex Trading

Artem Parshinhttps://www.litefinance.org/blog/authors/artem-parshin/

Trader or investor, what should you choose? Can a beginner make a lot of money on forex? Basically, if you have ever wanted to find a source of quality education to learn to trade the forex market, this article is for you.

Why do you need to study forex trading and how to learn trade forex?

The time is moving forward, and technology is changing the way we live more and more. Only 10-15 years ago we hardly knew any other way to earn money except for getting an occupation and work from morning till evening. And what is going on now? Young and middle-aged people more and more often choose intellectual work as a main source of income. Working and making money on the Internet have become a popular source of income.

Trading in financial markets has now become so popular and accessible that almost everybody aged from 18 to 50 have heard about such terms as ‘forex’, ‘exchange’, ‘trader’. Of course, all this is accessible and popular, as these new concepts entered our lives, there has appeared a new serious problem, insufficient education in this area. Starting from childhood, people are taught that they need to study a serious profession in order to earn good money.

We all start studying in nursery schools, then we continue in school, next, in the university, and, more popular occupations need further academic studies. So, in order to consistently earn decent money, people should spend almost half of their life on studying. Of course, there is more general education there.

Dealing with a particular occupation, people study at university, and this takes at least 5 years. And now, let us get back to forex training and ask, if anyone has studied trading for at least a year. That is to study the methods of price predicting, specific features of exchange contracts, principles of pricing, types of securities, all the specific features of trading stocks. I think, there is hardly anyone!

Then why do you think that you can succeed in a business you know nothing about except for standard advertising slogans like “trading is easy”. Because of insufficient education, 98% of beginners inevitably lose their capitals. It would seem strange at first. There are all kinds of trading pursuits courses, stock trading courses and private trading lessons ample on the Internet.

Everywhere, there are ads about all sorts of trading gurus who promise to teach you to make profits within 1 day, or even within an hour. Why only 2% earn then? It is because most of these gurus and the authors of online trading courses themselves came out of these 98%.

They have lost their capitals, like most beginner traders, and, realizing that they can’t make money on trading due to the lack of education, they decided to take up teaching. And now, they offer to teach the newbies and so to make some money to cover at least some of their losses.

I will say even more, half of all those gurus haven’t even traded with their own money. I wonder what such a teacher can teach. Nothing! He/she can teach nothing because he/she has achieved nothing, though they can speak a lot. That is why the statics is horrible.

What am I righting it all for? For the readers to understand one important thing. No one can ever succeed in a business that he/she hasn’t trained in. Of course, there is a concept of talent, but it has nothing to do with the currency market. Even if you are incredibly gifted, this won’t yield you any positive result. You’ll never be able to make money on forex without knowing how the financial market operates, how the price is formed and other important notions. That’s a fact! And I have been dealing with this fact for more than seven years of teaching.

However, this doesn’t mean that you’ll have to necessarily study for 5 years and more to make profits from trading. That is not so in fact. The time depends on many features, and one of the most important is one’s study skills. I know real-life examples when a person with good study skill managed to easily understand and learn the material in just a month, and some of students couldn’t learn in even half a year.

Another important feature is the structure of the forex training course on trading. If a teacher has a clearly structured, concise, personalized teaching methodology, the students can learn and assimilate the material ten times faster. As a result, you see now that, before you can make a profit from trading, you need to learn this. If you find a quality source of education and a good teacher, then you’ll significantly reduce the time of training. But again, much depends on your personal learning ability. If you don’t understand what you study, you are not interested, or you just don’t understand what all this is about, then trading might be not your business.

What is the best way to learn forex trading?

So, you now understand that you need to study trading, both in theory and practice, and the more, the better. Let's see what training methods are available and how efficient each of them is.

1. Self-education

Individual study is the first and the most accessible way to learn to trade the forex market. This type of training implies that you have to go by yourself all the way, from the very beginning to the end. The Internet is ample with various sources of information on trading, anyone can write an own textbook on financial markets. Everything is quite simple, download the books and guides on trading and start reading them. However, this way involves a lot of troubles.

Disadvantages

• First of all, it is unstructured information. Differently put, you get an ample amount of information, but it is impossible to find out what you should study first and what is to be studied next. Finally, you receive the knowledge, but you can’t apply it to practice, and so, there will be no result too. 
• The second drawback is that most of modern authors do not understand what they are writing about. In other words, you have no guarantee that the information you learn from books is accurate or relevant, so you never know whether it will help you become a successful trader or not. Now, everybody can write and post articles on the Internet. 
• Next, it is time-consuming. You will hardly find such a book where everything from A to Z will be explained. And therefore, you need to read a lot of literature, which will take a lot of time, but it won’t necessarily be efficient.

Solution

I know the exact solutions to these problems. 12 years ago, I started my trading career with self-education. There were just no other ways to do it at that time; if there were, I couldn’t afford them. I began to read and study everything I could find, and soon realized that I mostly read texts that I could write myself.

So, I decided to read only they authors, whose trading performance could be proven by facts. Almost all of them are very famous people: Soros, Buffet, Graham...Each of them wrote more than one book, where it was described how the first market capital had been started and made up.

Admit, traders, familiar with the world of finance, know these names, and so, we all know what these people achieved.

And do you know the trading performance of modern authors? Have you seen the proof that the author of that book can really make money? I’m sure, you haven’t. Then, why do you believe that the guy from an advertising banner on the Internet, who is promoting his unique book on trading, is successful? So, read only books written by really successful traders. I have enumerated a few names. I, personally, was impressed by Benjamin Graham’s The Intelligent Investor most of all

  2. Trading training courses

Stock trading courses and forex training courses on trading are also one of the simplest ways to learn forex trading for beginners at present. All sorts of investment experts and trading gurus hold various seminars and training courses for beginner traders. At the free lessons, they usually tell their stories as traders, how much they earn and how simple it is for you to earn as much. If, of course, you attend other courses held by those coaches, paid ones.

Of course, there are helpful trading pursuits courses, but they are usually aiming at explaining particular issues, rather than at training their clients to trade forex. For example, it can be a tutorial devoted to a particular trading strategy, where all visitors share their experience of trading with that strategy. You can learn something useful at such public meetings. Such seminars are usually held by brokerage companies for their clients. The speakers there are their advanced traders or teachers invited from educational institutions, including stock trading school and forex trading school.

Drawbacks

• The first drawback is the cost of admission to such events. If a tutorial is held by quite a well-known person or a famous tarder, the price to attend the seminar will be rather high. For example, the admission to a tutorial held by a famous international trader (I won’t specify the name) cost about $2.300. It is rather a high price charged for the opportunity to listen to the success stories of rich people.
• Another drawback is that most of those tutorials are aiming not at explaining or teaching something, rather, they are held to just get money for the admission and sell some investment products. 
• The third disadvantage is that such events are not effective. I mean, they are not effective in terms of the information learnt. You need to attend quite a lot of such events to put the puzzle pieces together in your head. And that will take rather much time and money.

Solution

As I have already said, it is possible to get some useful information from the trading seminars, but you must clearly understand where you are going, how much it will cost and what exactly you will receive. As an example, I can mention recent seminars on “increasing financial literacy”.

So, as you see, everything is clear with the topic, they will be teaching financial literacy.

• Is it useful? Certainly! 
• How much is it? It is free. It is also an advantage. 
• How much time does it take? It takes from an hour to an hour and a half. Quite acceptable.
• Who teaches? It is usually a teacher of a professional training institution, often with an academic degree. So, you are sure that the lecturer is an expert in the subject taught.

Summing up, you are going to learn some useful information, you won’t spend any money, you can get acquainted with interesting people and get some useful contacts. If you approach any trading training course or tutorial this way, you are likely to win a lot of advantages.

3. Individual training

Of course, you can always get an education by attending training courses. This type of trading education is similar to lessons at school or university. You contact your brokerage company and they offer you to attend a forex training course on their base.

Almost every forex broker can teach forex trading basics. You can also ask an individual trader to teach you to trade forex. Some brokers involve special educational establishments that provide a wide range of educational service. I deliberately used the word education instead of knowledge, but more about that later.

Drawbacks

• First of all, it is again rather costly! If you attend a training course organized by your broker, you are likely to learn general information, for very few have really high-quality educational structures. In most case they charge some fee for this education. If you decide to hire a private trader as a teacher, the price will be very high. Second, the quality of education does not always correspond to the price and it is difficult to select the best forex education courses.
• This happens because brokers, as a rule, provide training courses that teach only general trading concepts; and the teachers are not university lecturers or recognized experts, they are mostly traders with 2 or 3 years of experience. Well, ordinary traders, if they can tell you how it basically works, are not always able to make it so that you understand everything correctly and can employ the knowledge in practice. So, the information itself can be useful, but it won’t yield the needed result without an appropriate structure.
• The third flaw is traders’ competence. Experienced traders are likely to offer you online trading courses. This means that a trader and you enter trades together and you are studying in the process of real trading. Basically, it turns out to be different. You just watch that trader working, but you don’t acquire any knowledge or trading skills yourself. In addition, individual traders charge a lot of money for their lessons.

Solution

So, how should you learn to trade the forex market? The answer is simple. If you can’t afford to deal with a professional structure, like the best forex school, you’ll have to arrange your education yourself. First of all, you need to set clear goals, timelines for achieving these goals, and the budget that you are ready to spend on education. You will have to spend it anyway! Don’t you think that you can learn to make profits from forex only by means of free lessons and tutorials, do you?

What I want to say is that if you don’t have a clear plan and a structure of your education, you will have to spend far more than you need. The very structure of mastering any specialty is simple, you just need to plan: theoretical base, practical work, forex analysis, selection of strategy, application, adjustment. That's all. You can solve any of these issues yourself.

Example. Theory. You go on for an introductory trading course with your broker. Practice. You open an account with your broker to train (ECN account with a minimum deposit of $200-$500, just don’t start with a demo account!) and see how your basic knowledge works in real trading, click on the buttons and trade.

Forex analysis. Study how to analyze price action and price changes (types of forex analysis) choose what suits you more and apply it to trading. Selection of forex trading system. Join basic knowledge and the method of forex analysis you like, develop your own rules for your trading system (paragraph by paragraph). Application. Apply your rules to real trading. Enter and exit trades and get a result (doesn’t matter whether it is positive or negative). Adjustment. Based on the trading performance, correct you trading system, eliminating its flaws and so increase its effectiveness. That’s all!

If you can’t make such a plan by yourself, you can do nothing but seek assistance from professionals (I’ll explain a little later).

4. Video lessons

You can learn forex trading online by means of online training videos. It is another accessible source of forex education. You can find any information in numerous video trading lessons. They provide both trading basics and more specialized information.

But, again, a newbie will find it difficult to see what information is helpful and what material is absolutely useless. It is difficult to find best forex education courses. Video lessons are a really accessible way to learn forex trading, as there is now a huge amount of different Internet resources, placing these trading videos. There are training courses, various kinds of market analytics; there are even trading ideas and trading recommendations on what type of trade you should enter.

And, finally, video lessons, trading tutorials and forex trading webinars are the only way to study forex trading in a specialized licensed educational establishment, if it is in another city or in another country.

Drawbacks

• Along with advantages, there are, of course, many drawbacks. For example, you can’t assess the professionalism of the video’s author. If the video was recorded by an amateur, you won’t get much use of it. 
• In addition, analytics and trading decisions form trading video lessons often lead to losses for those who follow them. 
• If your loss resulted from your own trading decisions and forex analysis, you at least can analyze the reasons for mistakes and avoid them in future. And what if your loss resulted from the opinion of some analyst, what will you analyze? Who you will bring a claim?

Solution

This way to study forex trading has quite a lot of advantages. It is accessible, and you can study at any time convenient for you. To use the educational materials most efficiently you need to remember a few simple rules. 

• First, use only reliable and tested content. At least, it should be the material, advised by your broker, rather than just random videos, you’ve found on YouTube by yourself. 
• Second, don’t follow trading recommendations or buy trading signals. 
• Third, don’t try to learn a huge amount of information at a time. The videos are easy to watch, and you watch lots of them, so that you can’t understand and learn everything properly. 
• Fourth, pay only for the training provided by specialized online trading courses. They must have a license for educational activity. In this case, you are likely to get quality training.

5. Studying in a special forex trading school

It is obviously the most reliable and efficient way to learn to trade and make money on financial markets. It is a rather new trend in the world of trading, and such organizations started to appear just a few years ago.

Basically, it offers advanced training courses on a particular subject. The school develops a number of educational programs in this area that undergo compulsory certification at the Education Ministry. These schools provide the fullest range of the educational programs in a particular area of study.

Dealing with learning to trade forex, such a school will offer educational programs ranging from the trading basics to traders’ own advanced forex strategies. At the end of the course, students take a qualifying exam, to determine the level of their skills.

If a student successfully passes the exam, he/she receives a State Professional Development Certificate. This provides guarantees that you will really be taught, because otherwise you will not be able to pass the exam. Teachers of these institutions often perform scientific work and publish educational articles and analytical materials; they are frequent and welcome guests at various conferences and seminars. I have been a teacher of one of these trading educational institutions for 2 years already.

Drawbacks

This way of forex studying has probably a single flaw, limited availability. Such forex trading schools are just emerging and there are very few of them. There will be few of them also because this area can’t be entered by poorly qualified teachers. The activity must be licensed and requires only high competent teachers. And such teachers charge quite much. So, fraudsters just cannot afford this activity. 

That is why, there are many people willing to study in such trading schools, but there are few schools offering such services and few trading school reviews. If there is no such organization in your city or country, then this is even a bigger problem. Of course, one can train on Skype, but one often has to queue to enroll in such a course.

Solution

We can’t yet solve the issue of accessibility, therefore you either have access to this institution or not. It makes no sense to write about the advantages either, I’ll just note that you will not get a better and a more useful source of forex education anywhere else. And the pricing policies of such establishments are so acceptable that almost anyone can afford this education.

How to start learning the basics of trading?

This part of the article deals with self-taught forex trading. I’ll explain how to start trading in financial markets if you don’t have access to special forex education courses.

1. Before you start trading in the financial market, you should answer a few questions. Why do you want to trade? What are you prepared to risk and are prepared to risk at all? How much do you want to earn? How much time are you willing to spend on trading? How much time and money can you spend on training? So, you need to ask yourself these questions and answer them.

2. Define the type of market you want to trade in. Your answers from the above paragraph should help you.

   For example, you want to trade because: it is prestigious, you can make large profits, you are looking for a hobby that will make extra cash in addition to pleasure. You want to earn money: the more, the better, you have a small start-up capital, but you want to multiply it, you want to hold your capital in a foreign currency because your local currency is not stable (rather ambitious purposes for trading, but I'm sure that 90% of beginner traders think like that).

   What are you prepared to risk? You are not ready to risk at all (you want to gain money, not to lose!). But risk is everywhere, so, you will have to risk something. I believe your start-up capital is not big, so if you risk a part of it, for example, 30%, it won’t be a disaster, and you’ll at least gain some experience. How much time are you willing to spend on trading? For example, you can afford two or three hours per day; if it generates a steady income, you can spend some more time.

   How much time and money are you willing to spend on studying? Of course, you’d like to do it in one day for free. But you know that it is impossible, so you will have to spend some.

   Well, I think a month is enough for you to understand whether trading is suitable for you at all or not. You should not buy expensive courses, but you need to learn forex trading basics. You can go on for a forex training course with your broker, as I wrote above. So, you have found out all our purposes and ambitions. Currently, the foreign exchange market is a universal example of the above description. So, you are going to trade in the currency market, or forex.

3. Find a broker and trading platform. I won’t go into too many details, as there is an article that deals with this topic, you can read it here. It explains in plain terms how to choose a reliable broker. So, suppose you have selected it. I’ll only add that you should choose the broker that provides a wider range of trading instruments.
4. Study the basics of forex trading in general and the features of trading instruments provided by your broker. At this point you can use a course provided by your broker, video lessons or online training. You don’t need to go too far. Understand the principles of forex pricing, features of trading instruments and what determines their price swings. Clearly understand the basic terms: spread, lot, leverage, swap, commission, pips/points, trend, trade, order, short, long, quote. It's enough.

5. Open a trading account with a broker. I do not insist, but I recommend my students to open right away a real account like ECN, rather than a demo account. Why? Trading is money, money is a need or a necessity, and any need always causes mental tension and psychological stress. 90% of traders take the wrong trading decisions just because they cannot cope with their emotions: greed, fear, excessive excitement ...

   If you start trading on a demo account with virtual money you won’t feel any stress and won’t be prepared for it. It is like if you are taught to swim in a rubber boat in a small lake and then, they say you have learned everything and send you to the ocean in the same boat.

   That is why everybody who switches from a demo account to a live trading account start getting losses and can’t see the reason. It seems that you enter trades according to the same rules, but the result is different. That is because of human emotions. So, I won’t write too much about this, you’d better forget about a demo account at all and study on a live trading account.

6. Determine the amount of money you will be training with and go ahead! You have learned theory, now, it is time to see how it works in practice. Enter trades of minimum size and see how the market behaves and how the strategy works.

7. Just trade and gain the historical data. When the period that you allocated for training ends, analyze the result. If you have made a profit or at least retained the initial deposit, you have a talent in addition to your will. So, you have all the opportunities, study further, go to a special trading school and trading can become a source of considerable income for you. If the result is negative, you need to find out what the problem is. If the problem is technical, you were doing everything correctly but there is no result, you can turn to professionals, they will explain what the reason is. You may just need to correct your trading strategy.

   And if you have suffered losses and you are really upset; if trading causes nothing but frustration, this is probably not the business you are apt to and you should find another source of income.  

Let us sum up in the end

There are many ways to learn forex trading for beginners, but most of them aren’t efficient. If you start trading just to try out, you may start independently. But if you decided to get down to forex trading, don’t study it on your own; go to a special forex trading school and study with expert traders. You will spend less time and money and you will be more likely to succeed. And of course, I would like to recommend to read forex trading blogs where professionals sharing their secrets of forex trading.

To learn forex trading you have to try to trade yourself and understand the mechanism of how the trading terminal works. 

You could learn forex trading via telegram chats and channels.

You could participate in specialized forex community chats of LiteFinance traders around all of the world and discuss your questions to learn forex trading efficiency.

You could also read and use forex strategies for beginners to learn forex trading and start your practicing.

Use my promo-code BLOG for getting a deposit bonus 50% on the LiteFinance trading platform. Just enter this code in the appropriate field while depositing your trading account.

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