If you’re a forex beginner, you have come across many free and paid courses online that promise to turn you into a successful trader. Forex trading is a skill that needs extensive knowledge and experience. But many forex newbies wonder if it can be self-taught.
Forex trading can be self-taught. Online and offline resources such as books, websites, YouTube videos, and forums are invaluable information sources, allowing you to learn forex trading basics. Also, demo and micro-accounts can give you real-world experiences without losing your hard-earned money.
This article will discuss how you can learn forex trading on your own. We’ll elaborate on where to find information and what to focus on in your learning process.
IMPORTANT SIDENOTE: I surveyed 1500+ traders to understand how social trading impacted their trading outcomes. The results shocked my belief system! Read my latest article: ‘Exploring Social Trading: Community, Profit, and Collaboration’ for my in-depth findings through the data collected from this survey!
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Can You Learn Forex on Your Own?
You can learn how to trade forex on your own. However, it doesn’t undermine the importance of education. You can’t become a successful forex trader without getting in-depth and extensive knowledge of the market dynamics. It’s just that you don’t need to take courses.
The vast amount of online information can benefit you the same as a one-on-one tuition course. But it may make you confused, especially if you’re a beginner and don’t know where to start. So, you should know what to look for and where to find it. Here’s how you can take the first steps to become a self-taught trader:
Read Books
By reading books from credible sources and authors, you can learn the basic concepts of forex trading. It’s the classic way of self-education in any subject. So, find academic textbooks and those recommended by top traders. One of the best books on forex is “Technical Analysis” by John Murphy.
Online Sources
The online world can be a real university for forex beginners, taking them to advanced knowledge levels. Many reputable websites can help you learn everything about forex through their free materials. Balance.com, Investopedia, and Babypips are among the most reputable websites that many forex brokers use as educational references.
YouTube is also a valuable source that can help you broaden your knowledge. Forex forums are another invaluable hub of knowledge and experience where many traders share their expertise with others. You can ask just about anything you want, and there will be enough responses to help you solve your problem.
Use a Demo Account
No matter how extensively you read and learn, you can’t become a successful forex trader until you get real market experience. Forex trading is a skill, like programming, that you should practically engage with to consolidate what you’ve learned. Most forex brokers and educational websites offer demo accounts where you can trade in a simulated market without risking your money. You’ll be able to see things from a different angle and get a real feel of the whole story.
Use a Micro Account
When you trade with a demo account, you can test many scenarios and strategies and get a valuable experience without getting nervous about losing your money. This possibility takes the pressure off your shoulder, allowing you to think more logically rather than emotionally.
Controlling emotions is a crucial part of forex trading that you can learn using a micro forex account.
This account allows you to place small orders using a limited capital. This way, you can put your real money at risk and experience the feeling of losing actual money. So, you can learn many things that books and websites can’t teach you.
What To Learn About?
Subjects and nuances related to forex trading can be so numerous that you don’t know where to start and which ones are more important than others.
The Basic Concepts of Forex
If you want to become a profitable forex trader and shorten the learning curve, you need to build a theoretical foundation of the basic forex concepts. First, learn about forex terms such as pips and lots, price patterns, margin, and leverage. Then, study the different strategies, charts, trading styles, technical and fundamental analysis before preparing a plan.
You can visit forums and read their threads to see what you need to learn. Check to see if you understand everything they talk about or not. This way, you’re ready to move on to the next level.
Devising a Plan
Developing a winner plan is one of the pillars of forex trading. It’s a framework in which you make all the decisions, devise your risk-management strategy, and virtually any step that you take down the road.
Do your homework, consult websites and forums, and read extensively to see what trading plan suits you and your goals. When you have a robust plan, you won’t give in to your emotions and use it as a yardstick to measure your decisions’ accuracy.
Emotional Management
One of the most significant risks of forex trading is giving in to emotions. To curb your feelings, first, you should determine your expectations. Forex trading isn’t a get-rich-quick scheme that makes you a millionaire in no time. It takes extensive work, experience, and of course, failures.
You should prepare yourself for losing money and avoid engaging in trades out of fear. Emotional control should be one of the first things that you try to learn.
Find out how to stick to your plan when you’re tempted to try different strategies. It’s a crucial factor in forex stressed by many experienced forex traders.
It also helps you avoid following the crowds and take losing traders’ advice. When you’re in control of your emotions, you don’t let others sway you, and you make trading decisions based on your preferences.
What Currencies To Trade
Currencies are the only assets you’ll be trading in forex. So, you may think it’s easy to choose some based on what other traders do. However, you need to study market conditions carefully and avoid buying random currencies that simply look good.
Track every reason behind currency moves and try to predict their future movements. Choose a few currencies and focus your efforts on them.
Your Personality
Most of the trading decisions are direct results of your personality. It can affect how you approach trading, profits, risks, and losses. For example, if you’re naturally risk-averse, you should have a different plan from an adventurous trader.
If you can’t tolerate waiting for a long time, maybe day trading is better for you. If you’re a people person, you may be better off trading in groups. So, try to evaluate your strengths and weaknesses and decide how they can affect your trading styles.
Learning From Mistakes
Learning from mistakes is what distinguishes a successful trader from a loser. The essence of experience comes from making mistakes and learning from them. If you simply move on after losing, how can you decide what works for you?
Keep a journal and take note of everything that happens to you and the reasons that led to your failure. If you consider these mistakes as tuition fees, you’ll never repeat them.
Author’s Recommendations: Top Trading and Investment Resources To Consider
Before concluding this article, I wanted to share few trading and investment resources that I have vetted, with the help of 50+ consistently profitable traders, for you. I am confident that you will greatly benefit in your trading journey by considering one or more of these resources.
- Roadmap to Becoming a Consistently Profitable Trader: I surveyed 5000+ traders (and interviewed 50+ profitable traders) to create the best possible step by step trading guide for you. Read my article: ‘7 Proven Steps To Profitable Trading’ to learn about my findings from surveying 5000+ traders, and to learn how these learnings can be leveraged to your advantage.
- Best Broker For Trading Success: I reviewed 15+ brokers and discussed my findings with 50+ consistently profitable traders. Post all that assessment, the best all round broker that our collective minds picked was M1 Finance. If you are looking to open a brokerage account, choose M1 Finance. You just cannot go wrong with it! Click Here To Sign Up for M1 Finance Today!
- Best Trading Courses You Can Take For Free (or at extremely low cost): I reviewed 30+ trading courses to recommend you the best resource, and found Trading Strategies in Emerging Markets Specialization on Coursera to beat every other course on the market. Plus, if you complete this course within 7 days, it will cost you nothing and will be absolutely free! Click Here To Sign Up Today! (If you don’t find this course valuable, you can cancel anytime within the 7 days trial period and pay nothing.)
- Best Passive Investment Platform For Exponential (Potentially) Returns: By enabling passive investments into a Bitcoin ETF, Acorns gives you the best opportunity to make exponential returns on your passive investments. Plus, Acorns is currently offering a $15 bonus for simply singing up to their platform – so that is one opportunity you don’t want to miss! (assuming you are interested in this platform). Click Here To Get $15 Bonus By Signing Up For Acorns Today! (It will take you less than 5 mins to sign up, and it is totally worth it.)
Conclusion
Forex trading is a skill that you can learn on your own. Online resources such as websites, forums, YouTube videos, and books can eliminate the need for a course. You can gain experience in trading through demo accounts and micro-accounts.
In your learning process, you need to start with the basic forex concepts and terminology. Go on to learn different trading strategies and styles, and decide which ones match your personality and goals. You also need to learn how to manage risks and your emotions.
BEFORE YOU GO: Don’t forget to check out my latest article – ‘Exploring Social Trading: Community, Profit, and Collaboration’. I surveyed 1500+ traders to identify the impact social trading can have on your trading performance, and shared all my findings in this article. No matter where you are in your trading journey today, I am confident that you will find this article helpful!
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