Five Simple Steps to Trade the Market

Each year, millions of amateurs try their hand at the market casino, but the majority leave a little poorer and much wiser, having never realized their full potential. The majority of those who fail have one characteristic: they lack the fundamental abilities needed to tilt the odds in their favor. However, if enough time is spent understanding them, it is possible to significantly improve one's possibilities of success.

Many traders buy without understanding why prices increase or decrease. Rather than doing that, they follow popular tips, make binary bets, and sit at the feet of gurus, allowing them to make irrational buy-and-sell decisions. A more appropriate course of action is to learn how to trade the markets effectively and confidently.

Begin with a self-examination that examines their relationship with money in detail. Do they view life as a struggle, requiring much work to earn each dollar？ Do they believe that their personal magnetism will bring market wealth to them in the same way that it attracts money in other areas of life？ More concerningly, have they consistently lost money in other endeavors and hoped the financial markets would be more tolerant？

Whichever belief system they hold, the market is likely to reinforce it through gains and losses. While both hard work and a strong personality are essential for financial success, losers in other areas of life are more likely to become losers in the trading game. Do not panic if this describes them. Rather than that, pursue self-help and educate themselves about the relationship between money and self-worth.

Once they've gotten their head straight, they can begin learning to trade by following these five basic steps.

1. Open a Trading Account

Find a reputable online Forex broker and open an account. Even if they already have a personal trading account, it's a good idea to maintain a separate professional trading account. Familiarize themselves with the account interface and make use of the free trading tools and research available to clients only. Virtual trading is available through a number of brokers.

2. Learn to Read a Market Crash Course

Financial articles, Forex market books, and website tutorials are all examples of this type of content. There is an abundance of knowledge available, much of it freely accessible. It's important not to concentrate on a single aspect of the trading game. Rather than that, research everything market-related, even ideas and concepts that they believe are less relevant at the moment. Trading begins a journey that usually leads to a destination that was not anticipated at the start. Their extensive and detailed market knowledge will come in handy constantly, even if they believe they know where they're going right now.

Begin following the market in their spare time. Get up early and learn about the foreign exchange markets' overnight pricing movement. (A few decades ago, US traders were not required to monitor foreign markets, but that has changed dramatically with the rapid growth of electronic trading and derivative instruments that link global equity, Forex, and bond markets.)

3. Learn to Analyze

Study the basics of technical analysis and analyze thousands of price charts across all time frames. While fundamental analysis may appear to give a more direct path to profits by monitoring growth curves and revenue streams, traders live and die by market movement that diverges significantly from underlying fundamentals. Continue to analyze company spreadsheets since they provide an advantage in trading over others who ignore them. They will, however, not help them in surviving their first year as a trader.

Their familiarity with charts and technical analysis now qualifies them to enter the epic world of price prediction. Securities may only move up or down in price, which encourages long-side trading or short selling. In reality, prices can behave in a variety of ways, including chopping sideways for weeks at a time or whipsawing wildly in both directions, degrading buyer and seller confidence.

At this point, the time horizon becomes important. Financial markets grind out trends and trading ranges that show fractal properties, generating independent price movements in short-, intermediate-, and long-term time periods. This indicates that a security or index can simultaneously form a long-term uptrend, an intermediate decline, and a short-term trading range. Rather than complicating prediction, the majority of trade opportunities will emerge as a result of interactions between these time intervals.

Buying the dip is a famous example of this strategy, with traders entering a strong uptrend as it sells off during a lower time. The most effective strategy to assess this three-dimensional playing field is to examine each security across three time frames, beginning with 60-minute, daily, and weekly charts.

4. Practice Trading

It's now time to dip their toes into the trading world without having to give up their trading stake. Paper trading, or virtual trading, is a great option since it allows the beginner to watch real-time market activities and make buying and selling decisions that build the outline of a theoretical performance record. It is typically accomplished through the use of a Forex market simulator that replicates the look and feel of an actual stock exchange. Conduct numerous trades with various holding periods and strategies and then analyze the outcomes for obvious issues.

So, when do traders make the leap to real money trading？ There is no perfect answer since simulated trading has a flaw that is likely to manifest itself once they start trading for real, even if their paper results appear to be flawless.

Traders must learn to live in harmony with their twin emotions of greed and fear. Paper trading does not trigger these emotions, which are only felt through real-world profit and loss. Indeed, this psychological aspect of the game eliminates more first-year players than poor decision-making does. Their first steps ahead as new traders must acknowledge this challenge and resolve any remaining concerns about money and self-worth.

5. Other Trading Practice Methods

While experience is a great teacher, don't overlook the value of additional education as their trading career progresses. Classes, whether online or in-person, can be beneficial, and they range in complexity from beginner (with advice on how to examine the aforementioned analytic charts, for instance) to professional. Specialized seminars, sometimes taught by professional traders, can provide significant market information and trading strategy insight. The majority focus on a single type of asset, a particular aspect of the market, or a particular trading technique. Some are academic in nature, while others are more similar to workshops in which traders actively take positions, experiment with entry and exit strategies, and participate in other activities (often with a simulator).

Investing in research and analysis may be instructive as well as beneficial. Some traders may find it more advantageous to monitor or observe market professionals than to try to apply newly learned lessons themselves.

Additionally, it's important to find a mentor—a hands-on instructor who can teach them, assess their technique, and provide advice. Many online trading schools include mentorship as an integral aspect of their continuing education programs.

========

Top 7 Forex brokers in November 2021

IC Markets

XM

Exness 

GO MARKETS 

Hantec 

TMGM 

Eightcap