By definition, being a successful Forex trader means being a trader who makes more winning trades than losing trades, and more importantly, profits than losses.

I’ve found that many traders who leave the Forex market for good after getting badly burned out in the first few weeks of their short trading careers have one thing in common: they don’t follow a disciplined, step-by-step approach to getting started. in the Forex trading way. Most traders, even experienced ones from other markets, are so eager to get started that they just start live trading without following a proper plan.

That, in my opinion, is pure suicide. It is better that they donate the money to charity. Trading is not gambling. To become a profitable Forex trader, you need to follow a plan. I have detailed 8 steps that I followed religiously when I first embarked on the Forex path, all of which had served me well. Now I share them with you and I hope you find them useful.

Step 1 – Forex 101

Before you start doing anything, make sure you learn as much as you can about the basics of Forex. Understand what Forex is, how it works, how to calculate Forex profit and loss, what are the most popular currency pairs, etc.

Step 2 – Trade 101

If you are totally new to trading anything, arm yourself with at least some basic knowledge about trading. Understand as much as possible about terms such as chart reading, price action, market trends, breakouts, technical indicators, candlesticks, etc.

Now, it is important to note that right after this, many new traders feel able to enter the market. What happens next is an ugly sight as they become hundreds or even thousands of dollars poorer in a week and walk away from the Forex market forever disappointed and disillusioned. As fancy as you feel after choosing a few ‘innovative and safe strategies to make money on Forex’, resist the temptation to start trading right away.

Instead, continue with Step 3 below.

Step 3 – Find a good broker

Getting a credible broker is essential to trading Forex because you need their services to place your trades in the market. However, there are plenty of trades posing as legitimate Forex brokers hoping to gobble up your hard-earned money. So before you eagerly sign up for an account and transfer cash, make sure you do a thorough research on the broker.

Google the name of the broker with the word “scam” behind it and see if anything negative comes up. You’ll be surprised to hear horror stories where seemingly well-presented online brokerage sites work great at convincing people to deposit funds with them, but give tons of excuses when it’s time to disburse the funds. Many people get scammed by such trades every year, so make sure you only sign up with the most credible brokers.

And while you’re at it, look for a broker that allows you to sign up for a mock trading account. You’ll find out why in Step 4.

Step 4: Set up a mock account

As discussed in Step 3, you should look for brokers that allow you to set up a mock trading account. Basically, this allows you to trade with virtual money, so you can decide if you like their trading platforms without having to trade with real money.

Another obvious advantage of the mock account is that you can start honing your trading skills without consequences. Most of these simulated accounts give you a sum of virtual money to start simulated trading and put into practice what you have learned.

Step 5 – Start Simulated Trading

Now you can start trading virtual money while learning the basics of Forex trading! Now, I would recommend that you trade on a demo account for at least 3-6 months before you start using real money. Skipping ahead doesn’t do you any good except deleting your account.

I must remind you to treat your fictitious account with respect and operate it as you would a real account with real money. Only if you have a sincere attitude towards simulated trading will this do you any good when you start trading with real money.

While you’re making trading fun, this is the time to learn all you can about Forex trading strategies and train your eye. See Step 6.

Step 6 – Learn, Learn and Learn

It is highly recommended that you choose a few books or e-courses on Forex trading rather than trying to figure it all out yourself. Learning from a good mentor and applying the techniques you are learning to practice is the only way to become a successful Forex trader.

Step 7 – Plan your finances wisely

Surprisingly, many traders tend to skip this step altogether. Remember, trading is not gambling. You must plan your finances wisely and determine how much you can risk on each trade. Each individual has a different risk tolerance level depending on their financial status and personality. But as a general rule of thumb, I wouldn’t recommend risking more than 2-5% of your total trading account per trade. This means that if you have a trading capital of $10,000, you should not risk more than $200 to $500 per trade.

Step 8 – Start live trading

Once you have learned what you can from books and courses and have simulated trading for 3-6 months, and only if you have made more winning trades than losing trades, you can start live trading.

You have come a long way and you should feel confident in your business skills. However, you may find that you are not as confident as when you are simulating trading. You may be losing more than before. This is normal, because now you are trading with a live account and the fear of losing and the greed to win are stronger than before. If you can overcome these psychological barriers, you will soon regain confidence in your trading.

Also, don’t get in the habit of trading just because you feel the need to. The market will always be there for you to trade, but you may not always be in the right frame of mind to trade. If you are in a bad mood, don’t trade. If you can’t think straight, don’t trade. If you are tired, do not trade. If there is no signal to trade, do not trade. The bottom line is don’t trade just for the sake of trading.