Once I starting making a regular profit in the forex markets, the word quickly got out via friends and family, and everyone I know started asking me if I would teach them about of forex trading. So this article is all about what I tell them. . .
The first thing is get ready for a life-changing adventure! Once you get a taste of making money by sitting in front of your computer monitor, there is no turning back. Then after getting them all fired up (I am one of these people who get passionate about things I believe in – I can’t help it), I get them into a free demo trading account as quickly as possible, usually within minutes.
Then, I show them how to use an online trading station (free computer software that allows you to use your demo account to interact with the largest money market in the world – with over $1.5 trillion exchanging hands per day – a huge market!).
The wonderful thing about these free demo accounts is that they are exactly the same as real trading – unlike learning how to invest in the stock market, for example, where you have to pretend that someone will sell to you and that someone will buy from you – and that is not real at all! The forex market is so liquid (instant buyers and sellers) that both the demo and real accounts behave exactly the same! What a great way to learn – when you switch to a real account, you can’t even tell.
Next, we download a template trading plan and complete this in detail, agreeing the strategy and rules that they will follow. Then I get them to practice, using the techniques that we outlined in their trading plan, and their demo account, until they feel comfortable that they are making consistent profits. At first, like anything, you need to learn from experts. You need a mentor to teach you. You can’t just do what you ‘think’ will work – you must learn techniques that really work. Trading is both a science and an art, so practice is very valuable before you start to trade for real. I tell them to be patient, the thrills are coming soon!
At every stage we review their performance in the demo account. Of course, we’re interested in how much money they’ve made, but far more importantly we’re interested in how closely they’ve followed their trading plan. This plan is what will anchor their trading over time, and provide the guidance and structure that facilitates focussed and disciplined trading with a high probability of success.
Then the day arrives, they open a real account and start trading in a mini account (designed for beginners or those who want to do smaller, yet real, trades). Once they see real money being made, they can hardly wait to trade in a regular account – but again I tell them to practice because now the trades are real. Because they did their homework and practiced proven techniques with the demo accounts, the transition to a real account is easy – the hardest part is learning not to shake in your shoes as they enter into this exciting arena along side the wealthiest people in the world. Keeping calm takes awhile and then they come to the realization that they too are on their way to making more money than they ever imagined.
Eventually, everyone I’ve mentored goes out on their own and doesn’t need my support any more. Even though they no longer rely on my support, they continue to rely on their trading plan to guide ever aspect of their behaviour – what markets they trade, when they buy and sell, how large their positions should be, what they should do following a string of losses, or an exceptionally large profit. . . A solid trading plan works out exactly how to respond to each of these eventualities, and pretty much every other conceivable occurrence.
What amazed me when I first looked into forex trading was the amount of available websites offering endless promises about riches to be made forex trading. Yet, at the same time, I quickly learned from real experts that most people who follow this advice lose all of their investment in the first few months. Wow!
So, not wanting to make that huge mistake, I followed the advice I now give to my friends. Start with a demo, then a mini-account and finally move to a regular account all the while being mentored by someone who really knows how to make profits in the forex market.
By following this advice myself, and sticking to my own trading plan, I survived the first few months and now make a steady profit.