Most people struggle trading because either they had a misdirect guru from forums , or friends or even a mentor that does not trade for a living at all. Other than that, either they are simply lazy or in the wrong direction on learning the way to trade correctly and following the system properly.
Though I never had covered this section before but that’s what I am going to start with before directing you all how to learn it properly.
Step no.1 Learn the basics if You are new. Read basic forex terminology, type of analysis, how orders are taken, understand the whole market process. Most new novice or random average person that are influence in trading forex by friends or family or by ads in the internet are lead to dive into the chart without knowing anything at all.
Step no.2 Learn the Trading system inside out. Learn how you can specify a signal that is clear and easy to follow or look for on a chart. Understand the drawdown of the system involve. That drawdown is infact the losing streak season and identify this ‘When’ , it could be a specific month or season. IN order to know this is to backtest or forward test. Test 1000 test trade, or even 10,000 or even more until you are fully cooked and confident and knowing the whole criteria like 2nd nature.
Step no.3 Applied your knowledge of testing and system into the live market with a very very very small position because on the first step of your trading is in fact not making money at all but to learn new mistake which you might not anticipate in testing since the market changes over time and ‘ The historical past does not indicate future result’. Most people are mislead on this. What I meant here is Trading Psychology which is a major skill in which you need to master via live trading. Because live trading uses real money which uses real emotion. The Trading System it self is NEVER be broken at all.
Step 4. Once you are able to master your greed and discipline, You will then still need small position to learn your mistake in training your self to follow your very own plan without deviating even 1 letter! Most people tend to be on autopilot , trading straight away without emotion but without a plan. Taking trade at the spur of a moment without analysing the actual moment or current condition of the market.
Step 5. If you successfully manage your discipline, your Money management, Your psychology and consistently follow your system over a period of at least 3 months or 6 months as per what you had endure and you will still learn to use small position to maintain consistencies.
Step 6. This is where the Big Bucks come in. This is the part where you are very competent in Master Psychology, Discipline , master manager of your risk, Master Trader in trading with a plan. This is where you uses your maximum tolerable risk position in order to earn for a living. You must ensure your self mastered in Trade management and the ability to make quick sound decision if a trade goes unplanned. This is your focus and have a goal in mind to achieve for a particular year or month.
So , sounds easy ? the process going through that step is not a short one, I had gone through worst achieving a level now to be an expert in what I do. It may take years months or weeks. This depend how strong your mentality is and not for the faint of heart! You have to realise that this is reality. Trading is not a joke or easy money to get from. IF I win, means someone is in a suffering loss. That’s trading, transfering money from who do not know to who does know!