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If you want to trade in the Forex market, it is best to take some lessons from a good Forex school. Such schools teach their students the basics of Forex trading and prepare them to handle the ever evolving market of Forex. But there are some limitations to these schools.
There are many things that you’ll learn from a Forex school, and then there are some skills that are not covered in their courses. I’m not trying to disparage the quality of formal Forex education, but just stressing that how important hands-on training is.
When you actually start trading using real money, you acquire several practical skills that cannot be learned in theory classes. These skills are necessary if you don’t want to lose your capital. Here is a short list of some most common skills every Forex trader must have:
It pays to be patient. When you start trading in the Forex market, you cannot expect instant success. You need to be patient and understand that success will come to you after a few trading sessions. Apart from all the lessons that you learned from your Forex course, you’ll have to spend many hours in practice when you make paper trades instead of real money trades. The common saying goes that it takes 10,000 hours to be proficient at something. So you need to be patient and keep practicing before you can consider yourself to be a master at the Forex market. Success does not happen overnight.
Trader’s point of view
Make sure you have a trader’s mindset and not a gambler’s when you trade in the Forex market. When your trade starts to go against you, you should just close it instead of letting it run. While a gambler would hope for a positive outcome even if the trade is unsuccessful, a trader would accept his loss and close the trade when it starts going down.
When you open a trade, it always has chances of going against you. If that happens, you will lose money. This is why you must develop some risk management skills that would help you deal with possible loss. One simple example is to limit the money that you are willing to risk per trade. This could be some percentage of the trading capital. So in case you have an unsuccessful trade, your loss will be limited. The downside to this is that your invested amount would be less and you won’t be able to make large profits.
Long term view
Beginner traders generally think that they can be rich overnight in the currency market. Although all good Forex schools teach their students that it takes time to earn money in the Forex market, yet some people have the wrong notion. If you try to make big money in the starting, your trades can be a disaster… unless you are really lucky. The right way to earn in the Forex market is by trading using leverage, although this also increases the risk.
Make sure you develop these skills if you want to make long term profits in the Forex market.