How to Learn Forex Trading for Beginners

Many new traders want to learn forex trading fast, so as to make money and pay their bills. While necessities of life are good to think about, one has to be careful and not to rush. Trading is very tricky, and so is the education surrounding financial trading of all kinds. This is not about the best forex trading strategy nor is it about impressing other traders. Wise education has to have depth. As well as unique interest on the part of the learner. As opposed to just learning concepts and ideas in a mechanical way. Students who attempt to impress others with good exam results and fast learning, are not the best thinkers. The best thinkers are the ones who are curious and ask challenging, intelligent questions. Currency trading strategies require knowing how to deal with confusion and the unknown. The average trading course out there trains students on how to think and act in a disciplined way. Because that is what defines an orderly trading system. But sooner or later these traders will find themselves facing intimidation. As the market will behave strangely, and two of their best indicators will be in conflict. So what do traders do when their best indicators and methods are in conflict with one another?

Learn Forex Trading Differently

You as a new trader, can learn forex trading in a wiser way. You can learn forex trading by breaking out of the bonds of disciplined trading theories and methodologies. In the case of conflicting indicators, which is an almost everyday occurrence in the markets, you have to dig deeper. By using fundamentals and chart patterns first, you immediately gain an advantage over the disciplined, ultra-safe trader. Some very good currency trading strategies are possible to develop when one digs deeper. Fundamental analysis itself is a very strange kind of analysis. Since it takes into account investors’ fears and sense of uncertainty. The average market typically stops rallying when uncertainty is in the air. So there might be few days of downside, intimidating downside. But once the air is clear, and the uncertainty is gone, the market rallies again. Even certain, bad news, of limited impact helps remove uncertainty and the market rallies on such news. And the average trading course cannot teach such analysis methods because there are thousands of cases and different combinations of events, each one being totally unique! A good fundamental analysts however is able to figure out these events, at least 60% of the time.

How to Learn Forex Trading
There is a misconception that discipline is good, and that disciplined people will win any battle. That is not true. No amount of training can fully prepare soldiers going into the unknown. The unknown has to be handled in any kind of way possible. So many battles were actually won exactly because the soldiers in the field disobeyed their superiors. This misconception is taught in many forex trading courses as the basis of learning to trade. If it was really so simple, then nobody would fail in trading. First and foremost, wise traders have to disobey at least one good indicator, once, on any day. They expect things to be so, because confusion is what makes the markets work.

Taking Wise Risks Pays and He Who Dares Wins

The wise trader who knows a thing or two about fundamental analysis, has the courage to place a long trade when the market retreats temporarily lower, on uncertainty. The ultra-safe, disciplined trader on the other hand sees a market price below some support level. So they close all losing trades and get out of the market. But that’s not how battles are won in real life, the ultra-safe trader should have known that life is not perfect, and confusing events are bound to occur. So by avoiding risk in this case, they end up missing out on some very profitable trades. The wise trader, especially the kind of trader who trades using CFDs and trades throughout the day. Knows that day trading forex live is all about risk and confusion. And that half the indicators will be wrong at any one time. So they know first hand, that discipline is not going to get them anywhere. Only digging deeper into the markets will.

Pursuing the Perfect Day Trading Forex System

Creating a better day trading forex system is always possible, for many traders. Much like business success, different personality traits are needed. The people who make it in the business world are not the ones having the best university degrees. But rather the ones that are bold in taking new risks. A good day trading forex system is not that different to a new business challenge. The creator of that system has to be bold enough to break barriers and look beyond the obvious. Many other traders fail to develop such systems because of lack of confidence. Even though they are educated, they are simply afraid to take unknown risks and handle the day trading pressure. Wise forex CFD traders take day trading very seriously, but lightly at the same time. They are capable of developing CFD trading systems of extremely high dependability. The whole purpose of having such a system is to feel safe and comfortable. This is their first concern. And because dependable day trading systems treat each trade as unique. They are the closest one can have to a perfect system. Generic systems on the other hand only scratch the surface of the markets. And they fail far too often, as market volatility fools them very easily into giving the wrong signal. There is no unique way to figuring out the best forex trading strategy. Many different concepts and methods of analysis may lead to identical trading signals. This is because there is an underlying truth in the market charts. And this truth is hard to find just by looking at the charts through a simple, naive mindset.

Profitability of a Good Day Trading Forex System

Any good day trading forex system typically focuses on very few currency pairs, and is not generically used on all pairs. A system expected to predict 20 different currency pairs, through the same methods of analysis, is bound to be a generic system. And it will be defeated by the markets sooner or later. An efficient day trading system focused on a single currency pair can be very selective. And hence very profitable. Not because it will have many winning trades, but because many losing ones are cleverly avoided. That’s how the best forex trading strategy can really be made possible. It’s far more important to focus on avoiding losers, than on picking more and more new entry points. The profitability of such systems and strategies can be so big. That it is practically possible to start with a $5,000 CFD forex account and make over $100,000 in just over a year.

A Perfect Day Trading Forex System
Achievement requires being an expert. All successful professionals are specialists in one field. Traders are not different. If a forex trader is enough of a specialist, earning $100,000 a year is a perfectly realistic goal.

Traders Need to Pursue Realistic Goals

Traders need to define their goals well. And doing so requires clarification of facts, as to what is and what isn’t realistic. Traders who learn forex basics dream about making $100,000 in their first year. The money figure is not totally unrealistic, but their judgment on the markets and their skills, probably is. While, for a slightly more experienced trader, one who has traded for 2 years or more. The goal of having a very profitable year, reaching $100,000 in profits may be realistic. What differentiates realistic goals from pipe dreams is the gravity of the trading system. This alone reflects many key skills that the trader will have. Profitable forex trading systems have huge complexity, which varies from day to day. But if the trade is too hard to figure out, complexity can run in great depth. Poor trading systems on the other hand are generic, simple, and fail to handle the huge complexity of the markets themselves.

Trading CFD without Leverage

Trading CFD with low, or no leverage at all is a good choice in some cases. Especially in CFD accounts where the objective is to trade commodities or certain types of stocks. Some stocks for example, such as penny stocks and low price stocks in general are easily affordable at 100% of their value. So not using leverage allows the trader to feel comfortable without worrying about having to meet margin calls. Trading CFD is extremely profitable in the case of low price stocks, in the hands of even partially experienced traders. These stock traders don’t fit the profile of neither classic traders nor that of classic investors. Rather, they are somewhere in between, and their CFD trading systems use logical analysis of all levels. Such stock traders may have small or even large trading accounts. They simply don’t want to worry about potential margin calls. So they use low leverage, or no leverage at all. And apply similar money management that classic buy and hold investors have been using for years. Online CFD brokers facilitate very good trading conditions which make profitability possible. Above all, they like stock trading of this type, because each stock has a different story to tell. And each company is chosen and analyzed by different criteria. This is why logical analysis prevails over all other, one-sided analysis methods.

Trading CFD with no Leverage
New ideas may be new products and breakthroughs of new companies, after the IPO. Or new strategies of long established companies with small past success, which have deceptively cheap stocks. If the company becomes a takeover target, the stock will go up. But even without a takeover, profitability for such a company may be huge. Due to not having good prior economic numbers, classic valuation models will tell you that such a stock is worthless (no past sales, low profitability etc). Only logical analysis investors will figure it out, and will also make non-leveraged, affordable CFD purchases on that stock, because it will be a cheap stock to buy.

Trading CFD through Logical Analysis

Trading CFD through logical analysis is all about company uniqueness. So that two companies in the same sector are never considered to be alike. Hence their stocks are expected to perform differently as well. Logical analysis is about analyzing technological trends. And how technology and new products render other products obsolete. Most of these trades are based on time frames of around one year long. But many more smaller weekly and monthly trades can be made over that period. Stock CFD traders want to see stable trends, and trades they understand. Penny stock trades also work the same way. As most penny stocks are relatively new stocks, without much prior history. Classic stock valuation models will tell you that such stocks are worthless, or that are exactly right priced. But these models fail to deal with logical analysis, and always fail to predict penny stocks that break out. In general, it is not wise to apply technical analysis or fundamental analysis to any new, low price stock. The question is what does the underlying company do, and how likely it is to succeed. If it is going to be successful, most classic analysts will be oblivious to the signs. Stock traders can infer good CFD trading signals from this logical analysis. And because most of these stocks are very cheap, there is no need for much leverage.

A Simple Forex Trading Strategy

Crude oil can offer a simple, reliable forex trading strategy through the inversely correlated USDCAD currency pair. This pair trades so that it trends to move in the opposite direction that crude oil moves. And because crude oil is a relatively fundamentally stable commodity, it offers many great trends. More specifically, crude oil tends to set either linear directional trends, or range-bound sideways trading. In both cases, traders can trade USDCAD with a lot of confidence which is not found in any other pair. Foreign exchange currency trading online for beginners can be based exclusively on USDCAD and crude oil. While wise CFD traders can also temporarily hedge uncertain trades on USDCAD through trades on crude oil. There is no need to diversify into other commodity currencies either, as this will overwhelm the new trader. But one commodity such as crude oil, is quite unique, and offers all the profit potential one will ever need. Traders can make serious money trading USDCAD alone, and doing so on more than one time frames. They can practice currency trading in various ways, all focused on USDCAD. And the deeper they are able to dig in this specific currency pair, the more the will be able to handle risk and market uncertainty. A forex trading strategy doesn’t have to include many currency pairs. But it can include one commodity and one related currency pair alone.

Forex Trading Strategy
USDCAD tends to move exactly in the opposite direction that crude oil does. And crude oil offers stable trends which are possible to deal with, through technical analysis. Except for the US dollar component itself, which does not always behave as a technical currency. The trends of crude oil however tend to offset the impact of the US dollar, when looking into longer than 2 or 3 days.

The USDCAD Forex Trading Strategy

The SUDCAD forex trading strategy is nice for various reasons. The most important is the solid trend that crude oil provides from time to time. Since the entire crude oil industry is behind these trends. And this is in huge contrast with other currencies that are very country-specific, and therefore inherently less stable. And being less stable means that fundamental factors can create sudden movements in a currency pair. Movements that will easily defy all technical analysis. A good forex trading business opportunity for many beginner level traders can be perfectly based on USDCAD. But apart from crude oil itself, traders can enhance such strategies further by looking deeper into the US dollar. The US dollar cannot change the solid trends of crude oil. But it can nonetheless have day to day impacts on crude oil price, and also on USDCAD. Traders can use these intraday extreme price swings to make day trades. It also helps to know that one day’s extreme price action cannot possibly change the daily trend. And a lot of research has to be focused on the daily charts of these markets. Intraday movements are mostly caused by news, and only last for few hours to a single day. Counter-trend movements lasting for several days are corrections of the major daily trend itself, and are natural and expected to happen. But even these can be predicted to quite an extend.

CFD Trading Simulator for Pros

Traders can use a CFD trading simulator, which is either provided by their CFD broker as a virtual trading platform. Or through other available software, which accurately simulates the real thing. A good CFD trading simulator will cover the requirements of all tests. Good CFD trading systems can be based on simple logic, little curiosity, and few basic calculations. The tests needed to confirm these systems against real market movements are quite realistic. Since they include all the effects of volatility and the most unexpected moves. The concept of trading online made easy by practicing through simulation tests is real for many traders! Trading does in fact become easy, but that’s only because the hard work has been done in advance, during these tests. There is no free lunch and effortless trading. There is however well prepared trading, which does in fact work very well. Critics of paper trading argue that using a simulator is not real trading, and therefore it cannot provide serious trading. But that’s just their opinion, and is actually a premature assumption on their part. The fact is that paper trading is subject to less emotional pressure, and the testing trader actually takes more risk. Risk they would not take directly on a live account. All wise traders have used simulation software and have done paper trading at some point. After all, even a thought process is actually a simulation of reality. And there is nothing wrong with testing assumptions and ideas. In fact, even bad ideas that eventually fail, do help one’s creativity and original thinking. Wise CFD traders are wise only because they think wisely, accept failure, and are not afraid to fail again and again. And much of this is done in a demo CFD account. So that eventually they can trade a live account with confidence. Critics of paper trading do not realize that both live and demo accounts deal with the same, real underlying market. And in fact, many good trading systems are left unused by potential investors. Only because they wouldn’t allow a demo account trader to trade with their money. So instead they wait to find the super successful live account trader, to do their trading. Except that this trader never comes, either because they don’t exist, or because they prefer trading their own account.

Online CFD Trading Simulator
We are simulation machines anyway, and all our thoughts help simulate real world ideas. So critics of simulated trading talk nonsense. How real something is depends on how good the observation is. Even live account trading, under poor observational conditions, will not help the trader develop. It’s that critics cannot handle the truth, the truth that an under-financed trader can outperform their big size trading.

What a CFD Trading Simulator Does

A CFD trading simulator offers traders unique insights into techniques for handling open losing trades and uncertain trades. It’s not about handling winning trades, anyone can close a profitable trade and lock-in the profit. The hard task is dealing with risk, and losing trades. Simulated trading allows wise CFD traders to solve much of this problem. And to also make the transition from being an average trader to being among the pros. And even pro level traders continue to test new ideas once in a while. As curiosity never stops, it’s just that they become more selective traders through more and more experience. And the learning curve required devotion and accepting failures. Trading CFD for dummies is actually possible and not a far fetched scenario, and this is about profitable trading. This is because beginner trader have the curiosity to test their ideas on a demo account. And they can move fast onto trading a live CFD account. As CFD trading is very affordable, and trading size can be small. The live account trading experience, even at small size can offer all the money-related emotions that demo trading doesn’t offer. So the two accounts together make up a complete experience which does deal with the unforgiving reality of the financial markets. And it is unforgiving because there is no much room for mistakes. Wise traders learn from their failures, and move on. While easily intimidated traders quit before the battle even begins. And they are easily intimidated because of not having done sufficient, well observed simulated trades.