Step 4: Get Educated So You Can Devise a Trading Strategy!

Up until this point, you have a live, funded account that you are NOT using yet.

You have a demo account that you’ve used to learn the mechanics of trading.

Now, BEFORE you place your first live trade – this is important — it’s time to start reading.

I see people “wing it” first, and it ends up costing them a lot. Then they back up and do it right.

It’s like trying to build something without reading the instructions first. Bad idea.

You also want to get a forex education, because it helps you to devise a strategy that could involve charting techniques called “technical analysis.”

Part of your strategy can include fundamental analysis. This might involve watching the economic calendars for clues as to how an economy is doing.

OK, so now you have a live, funded account. You know the mechanics of the trading station and you’ve just completed a quick, online course over the past few days. Here’s what to do next.

Step 5: Just Before You Place Your First Live Currency Trade…

Don’t start off trading multiple lots. Start off trading 1 micro lot in your micro account OR 1 mini lot in your mini account. This way, when you have losses at first (and we all do), they won’t be compounded by multiple lots.

Trade with the daily chart’s trend and never take counter-trend trades. This way you’ll have an edge over time.

Use wide stops because your trades will need some breathing room. If you set your stop-losses too close, they are bound to get hit and will cause you more unnecessary losses.

Focus at first on buying the country with the strongest fundamentals if you use a fundamental approach. Or focus on buying the most distinct upward trending chart if you are a technical “chart” trader. If the trend isn’t obvious, scroll through the charts until you find a trend that you could see from across the room.

I’ll visit you tomorrow with Part 3 of this mini-series on “Your Quick-Start Guide to Currencies.”

Now that we’ve covered what forex is, and how to get a running start in understanding the FX markets, tomorrow going to talk about something called “pips” … and how they translate into big gains.

Even better, we’ll take a look at an actual currency opportunity that, judging by the looks of its chart, is about to make a big move.