First step is knowing how things work.
1. It’s a zero sum game.
Meaning for you to win, someone loses which most times is the broker or the bank.
2. You choose between a Market Maker or ECN broker.
Market Makers have an interest in seeing you lose a trade and can trade against you.
ECN brokers don’t trade against you, but build their profit into the spread. (The difference between the buy and ask price)
My personal preference is ECN broker and I use Oanda.
3. You need to figure out your trading personality.
There are 4 different types of trading personality.
Scalper – In and out of trades within minutes for very quick profits like 3-7 pips (points in the market)
Day Trader – Holds trades intra day and can have multiple trades during a trading time frame.
Swing Trader – Holds trades a few days to maybe a couple of weeks sometimes
Position trader – Can be in a trade for months. Generally people who don’t have a ton of time like doctors, ect.
You know who you are based upon how you react to the market. If you can’t watch it without trying to check it every few minutes then you probably are more of a Scalper or Day Trader.
If you don’t have a lot of time and only want to check charts every now and again, then it’s probably the latter two.
4. Your system
Your system needs to match your trading personality. This is where a lot of people mess up.
There are lots of systems out there, but honestly you want to trade on charts that give you a true representation of the market.
These are charts like range bars, tick bars, ect. If you’re using a platform like Metatrader then a lot of people develop free plugins to help translate the chart to this.
5. You controlling you
There’s a reason why a lot of crypto people be up and down like waves tossed to and fro.
They don’t know how to control themselves.
THIS IS THE HARDEST PART AND TRUEST WORK OF TRADING.
Systems are nothing without you committing to following them because systems tell you what you’re doing right and wrong.
6. If you day trade and scalp, move when the money moves
Every day banks have to fill orders. While the FX market is a 24/5 market (24/6 in some cases), the banks really only fill orders at a certain time.
It’s these times that you want to look to make your money. Generally between 1-4 am est, 7-11 am est, 6-8pm est.
London, USA, and Asian session.
7. Keep a trade journal.
This helps you to see where you’re good and where you’re not.
That way, you put the odds of success in your favor even more.
8. Keep a plan and don’t be greedy.
Currency isn’t going anywhere. Get a plan to compound your money and you’d be amazed where you are in 6 months to a year.
9. Don’t trade when you’re emotional, just had an argument, or not feeling the best.
This is when you make stupid judgments. If you’re not there mentally, pass on trading. Money isn’t going anywhere.
10. Manage risk. This is the most important rule.
Don’t risk more than you’re comfortable with. Think of your capital as inventory and trading as a business.
If you run out of inventory…well you know…
I don’t risk anymore than 2% per trade because I know my skill set and that it would take me 50 times losing in a row to lose all my money.
Which if you have a halfway decent system, that shouldn’t happen.
11. Study charts.
Look and see what makes sense to you when you look at the patterns on the chart. Once you see something that’s recurring, then see how you can monetize it.
This is what I do with crypto. You have to know the money management rules in any market. FX is no different.
12. Start with a small amount of real money. Use a demo to get used to the broker’s platform.
I don’t recommend starting with a lot when you’re starting out even if you can. I also don’t recommend hanging on a demo for long because nothing gets you ready for the feeling of losing real money like losing real money.
Use the demo to get used to the platform and then go with a small amount in the real platform.
Once you’ve proven you can turn a profit, you can add more.
13. Trading gets boring when you’re doing it right
Once you’ve mastered some of it, it just becomes boring and repetitious.
But it’s still a little nice to see the profits rolling in.
Let me know if these things help.