Financial markets are a complex beast and sometimes may seem like they have a mind of their own. Spot Forex has been a massively growing industry and I guarantee you’ve seen the growth! A vast majority of Forex traders entering the industry get caught up in deceptive rules on how to begin their journey. Here is some common rules:
- Research what Forex is.
- Educate on Youtube, BabyPips, or online
- Find a broker
- Open Mt4 account
- Trade, Trade, Trade!
Well I’m sure some of quite a few reading have taken this path. What exactly is wrong with this route? For successful and professional traders, this is not the road they take. In fact, it's almost completely different. Some of you may be stuck in this rut, but you will start to see improvement in your education if you take some mental notes.
If you are coming into the Forex business, break away from the rules you hear and give yourself a chance.
Research
Understanding what the Foreign Exchange Market is, is extremely important. False information gets passed around from uneducated individuals. Which is alright, we are all uneducated somewhere. That’s why I want to help clarify. A common misconception about the Forex market is that its a 6 trillion dollar market. When beginner traders make this assumption, they are saying it from the spot Forex perspective.
They don’t understand that within the Foreign Exchange market there are other instruments:
- Fx Swaps
- Forward contracts
- Options
- Currency swaps
Education
Actionable education is extremely important. The rule for the vast majority entering is to start with BabyPips & Youtube. You figure out what strategy you’ll use there. This is completely illogical and a rule you need to break..IMMEDIATELY!
“But Baby Pips has everything about Forex” First off, it does not have everything. Secondly, even if they did, there is no actionable structure. A dictionary has all the terms for you to be knowledgeable in life, but that doesn’t correlate to you being successful. You may think BabyPips has all resources to be knowledgeable, but that doesn’t correlate to you being profitable
Don’t fool yourself into thinking a free education resource will give you a real edge against the largest market in the world. Break the rules and find a mentor who has corporate, institutional, or firm experience in the industry.
Hard Work does not equal success!
Broker
The most costly rule around the industry..There are plenty of well regulated brokers with good customer service, and professional management.
Under capitalization among novices entering markets is common. As a result, low minimum deposit and high leverage brokers often attract individuals looking to be a trader. Oftentimes these brokers are unregulated, practice unprofessional business, and usually set up shop in countries not quite developed.
Break this rule and research a quality broker. Here is a huge key to help with you..If you cannot see the CEO, CFO, Directors, sales team on LinkedIn, you should stay far far away. Similar to that saying “I wouldn’t touch her with a ten foot pole” Do that with those types of brokers!
Dean Hyde is the CEO and managing director of Blueberry Markets based out of Australia. A professional and legitimate broker would never hesitate about being transparent.
Sign up free here if you would like a 10% trade credit. Sign up and shoot them an email!
Trading & Execution
Execution is where the action happens..But there is a proper way to be executing. Once many interested rookie traders get past the 1st 3 steps, this is where they execute everything that they’ve learned. This is also a detrimental part to their trading since every action leading up has led them in the wrong direction.
At this point, there is no understanding of what's moving markets or how markets work. The biggest wall faced by traders, which can easily be scaled, is staring at charts all day and drawing lines. If it was as easy to make money just by looking at a chart all day, your whole family would be traders!
That isn’t the case..Trading requires research and actionable education. Technical Analysis does not, I repeat, DOES NOT, give you an edge in markets. It’s a fallacy and a portfolio killing rule to uneducated retail traders.
Fundamental Analysis in Forex is the only way to truly scale into the business. That is how you understand what is moving markets and how to gain an edge. It’s how you determine the difference between price & value.
What to take away from all this
Trading is a tough business to be in. Don't let anyone tell you different! These rules among naive traders entering the industry eventually hold them back from any legitimate progress.
To be successful in trading, you need to learn from someone who has traded before. You need actionable education or you are wasting your time! When I mean traded before, I mean someone who has a high level of actionable knowledge. This could be firm experience, money manager, or corporate/institutional.
If it was as easy as looking at charts and YouTube all day, there would be a tremendous amount of profitable traders. I'm sure your friends & family would be doing it too!
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