Educate Yourself
The first thing to keep in mind is that you’ll need to know a little bit about what you’re doing before you wade in. Whether you once had a decent forex trading account that crashed, or you’re just starting out with no experience at all, you’ll want to educate yourself on forex basics first. Get acquainted with risk management and other basic forex concepts before you commit any money to a trading account. If you already have an existing account, you might want to withdraw some funds to spend on learning resources. A great resource to educate yourself is the collected readings for those sitting for the Chartered Market Technician (CMT) exam. The CMT Level 1 Curriculum is the definitive text for technical analysis, the mainstay of research for forex traders. It is an excellent place for the serious and aspiring forex trader to start. It will introduce you to in-depth money management advice, advanced analysis techniques, and—best of all—how to talk trading with the professionals who work with banks or established funds. Even if you don’t buy the book, find a way to get exposure to those who are trading well and who have an established track record.
Start Small
Starting small means starting really small. You can’t have success at trading for dollars until you’ve mastered trading for pennies. One broker that will allow you to do this is Oanda. You can open a trading account with this broker with literally just a few dollars.
Invest Regularly
Start investing on a regular basis as you refine your craft. Add $5 or $10 a week to your account. It doesn’t sound like much, but regular investing over time, along with your compounded gains, can grow quite a sizable account. The best part is that it won’t even hurt. You won’t lose the last of your savings on a trading stunt that you thought was a sure thing.
Be Patient
Forex is all about patience. Starting small might seem slow and frustrating, but it will keep you disciplined. Trade small and view everything in terms of percentages rather than dollars and cents. If you have a gain of $1 with a $10 account, that’s a 10% gain—not too shabby. If you lose $1, you’ve only lost 10% and you’ve learned a lot. And the whole experience only cost you $1. Profitable investing takes time to learn. There isn’t anyone out there who was excellent at it on their first day. Investing small on a regular schedule can help you combat some of the major hurdles involved in learning forex trading.
