Welcome to the Undergraduate-Junior level of your forex education and we are going to be looking at a lot of things. Brace yourself because the topics are about to get to the meat of it. We have learned so many things about the basics, the indicators, the trends, the news, etc.
Now, it is time that we get into trading. You are almost there. Graduation is only two levels away. Can you feel it? Well, at this level, we are going to be focusing on what many of you have been waiting for.
As usual, we start with this comprehensive summary that will let you know what to expect and how it will help you become the best trader that you can be, in the forex market.
For the first time, we are going to delve into things like the software to trade with and how with all the knowledge you have accumulated, you can make yourself the best forex broker out there.
These are the main topics that you can expect to learn about in this class:
- How to develop your trading plan
- What kind of trader are you going to be?
- How can you create your trading system?
- How do you keep a trading journal?
- How to use Meta Trader 4
These five main topics will cover everything from how you come up with the plan to having the system up and running with indicators and everything for you to take a crack at online trading in the forex market.
So, let us get started on a summary of each of these, to understand exactly what it is you are in for in this level of your forex education.
1. Developing Your Trading Plan
When you are a trader, you need to have your trading plan because following advice is good, until the plan someone else uses fails to work for you. So, how do you even make that happen?
Well, that is why we have this course. You will get to learn all the things that you can use to make sure that you have a trading plan that is custom made for you. You will need to include some of these things:
- Risk tolerance levels
- Experience in the market
You may be able to take some risks and some others may be out of your paygrade. How do you know which ones you can take and which ones you can’t?
The best part is that you will be able to update this plan as you learn new things to accommodate your changing tastes and preferences. The more you are in the market, the more that you will learn in the real-life world. That is how you will be able to get the best in terms of a plan.
When it comes to forex, we are told to be as emotionless as possible. Never trade based on feelings without data to back up what you think you should do. That is the reason why you will need to make sure that you learn the following things, included in this topic:
- You will learn the importance of having a trading plan as a trader.
- Trading discipline will be taught to you as the key to consistent profit-making.
- Personality and trading styles are supposed to mesh to make it easy for you and that is also covered.
- Why are you a forex trader? Find out what your motivation is.
- How much money can you lose before you get wiped out and out of the game? Find out what your risk capital is.
- How much time are you going to be investing in this?
- What kind of profits do you think you will get?
- What routine do you go through before you start trading daily?
- What kind of forex hardware and tools will you be using in your trades?
- How do you stick with the trading plan that you came up with?
As you will find out after finishing this level, there is a lot to cover when you are a forex trader. Having an organized approach will ensure you win and that you win big.
2. Which Type of Trader are You?
Psychology is a big part of the trading business when it comes to the FX online market. Learning how to trade forex involves more than just having a decent amount of forex education and forex trading experience.
There are many kinds of people and in this section, you will be taught how to recognize which kind you are, or are going to be. No two people trade similarly because it is always a judgment call when it comes to trading and how we decide is based on who we are as people.
Who are you?
Before you settle on a strategy that you will be using to trade, you will need to know who you are and the biggest part of this is honesty. Most of the time, you will fail just because you are using a trading style that is vastly different from your personality.
The thing about trading styles is that they seek to find out the weaknesses and strengths of people and then leverage them to make good trading choices. Aggressive people want huge wins and do not care about blowing their account, while the relaxed people want small wins and no losses.
The point is that you will be taken through a process that will help you know which trading style can be married to your personality.
Here are some of the things you can expect on this topic:
- You will learn the most important investment you can make as a forex trader.
- You will learn how to scalp.
- The specifics of day-trading will come next.
- Swing trading will also be taught.
- Position trading will be the last topic you take.
After this, you will have a working knowledge of what it feels like to be yourself when you are trading. You will need to identify without fail, what kind of trader you are or you will fail. This is not some message meant to scare you but something that encourages you to be honest with yourself about who you are.
Remember, this is all for your good.
3. Create Your Trading System
This is the third topic we will be going through. This is the stage where you start creating a trading system based on how much you know; how much you want to trade and what kind of trader you are.
Now that we have hammered out the kind of personality that you have, it is time we help you create a trading system that is based on that. The first step that you will be taken through will be about creating a mechanical trading system that will eliminate overworking.
Automation of trade is one of the ways that you can do this. Some of the things you learned in this course have been automated now. You might be wondering, why did we go into details if a machine could just do it for you?
Well, the thing about machines is that they are not perfect. Sometimes, a judgment call is made best by a human being who knows the details of something.
Pro Tip: You need to understand as you learn this system that, creating something like this is not easy. It is not even supposed to be a priority for someone so green to the market. It needs experience and a deep understanding. You may have that on paper but be in the market first.
The rest of it will be about:
- Designing the trading system in six steps. They will be very comprehensive and easy to follow.
- Building the trading system in just three steps. After the design, the building is not that difficult either.
- Coming up with the ‘so easy it is ridiculous’ system for newbies like yourself who do not have real-world experience.
However, mechanical trading is something that you will need to do. It works using a system of pre-set triggers that will perform a function for you when the time is right. To make sure that this works, you will need to ensure that all triggers are set well and accurately to make sure that any action taken by the mechanical system, does not cost you money.
4. Keeping a Trade Journal
Success in the forex trading comes from having certain crucial things like a trading journal that will make sure you are oriented in your goals and that you do everything in a performance-oriented way.
One of the most important things that we try to teach in this lesson is discipline. The best way to be disciplined is to be very systematic. Journals help you stay that way. That is the reason you will need to make sure that as a forex trader, you keep a journal to remain profitable.
At the end of the day, the three important things boil down to:
You cannot be any of these things if you are not systematic and you cannot be systematic if you have no way to ensure that you know where you stand at any given point in time.
The lesson will delve into the most important things like:
The 5 reasons why you need to keep a forex trading journal
Under this, you will come to understand that the best forex brokers and traders have journals and why you should have one too. It will help define you, keep track of the goals, highlight strengths and weaknesses and be a means for you to self-coach and improve yourself.
The five things that you must have in your journal
Under this, you will learn that some of the things you need to keep an eye on are not expendable. You will have to stay focused or you will lose. Things like potential trading areas, entry triggers, trade retrospectives, and others will all have different impacts on how you trade in the future.
The five things that you need to have in the journal will also be exhaustively examined under separate topics. They include:
- The potential trading area
- What is your entry trigger?
- Position sizing
- The rules of trade management
- Trade retrospective
- The trading performance statistics
- How you review the trading journal
As you will come to find out, keeping a journal is kind of hard but worth it.
5. How to Use MetaTrader 4
Welcome to MetaTrader 4. This is one of the best platforms used by the best forex brokers in the business to access the forex market. This software will allow you to have access to the currency pair in real-time and at the same time, execute orders.
The platform is designed to show you fundamental and technical analysis tools that you can rely on as a trader to improve the trading experience. MT4, as it is known, attracts more users because so many people trust it.
You will learn that it is one of the most important tools to have when you are a forex trader. You will get customizable charts that are also intuitive to make sure that you can understand what you are looking at.
Getting the Software
You can get the software by going to the website and downloading it into your computer. You will need to fill in details like your name, country of origin and other important details to create an account.
You will be provided with a demo account to practice with so that you can get the hang of it. Always start with the demo account before you start using the live account to make sure that you can come up with a strategy, without having to undergo real losses.
Other things you will learn in this topic are:
- An introduction to MT4
- The way you can set an order on MT4
- How you can install an EA on MT4
- How you can use indicators on MT4
That is the end of this level. Be prepared for the next one, where we will go even deeper into the world of real-life trading and how you can make your way through it without stumbling too much. Now, get started on your lesson.
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Developing Your Own Trading Plan
- What is a Trading Plan?
- Why Do Forex Traders Need A Trading Plan?
- Why Trading Discipline is the Key to Consistent Profitability
- How To Find A Trading Style That Suits Your Personality
- What is Your Motivation to Be a Forex Trader?
- What Is Your Risk Capital? How Much Money Can You Afford To Lose?
- How Much Time Can You Dedicate To Forex Trading?
- Which Kind Of Returns Do You Expect To Make From Forex Trading?
- What Is Your Daily Pre-Trading Routine?
- What Forex Trading Software, Hardware, And Other Tools Will You Use?
- Stick With Your Trading Plan
- Summary: Developing a Trading Plan
Which Type of Trader Are You?
Create Your Own Trading System
Keeping a Trading Journal
- Why You Need A Forex Trading Journal
- 5 Reasons To Keep A Forex Trading Journal
- 5 Things You Must Have In Your Trading Journal
- Potential Trading Area
- Entry Trigger
- Position Sizing
- Trade Management Rules
- Trade Retrospective
- Trading Performance Statistics
- Reviewing Your Trading Journal
- Keeping A Trading Journal Is Hard But It’s Worth It
- Summary: Keeping a Trade Journal
How to Use MetaTrader 4