Is it possible that you can become a Forex trader? Let me ask you a question first. Can you become a pilot without knowing how airplanes work? The same thing applies here to Forex trading. You cannot become a trader without knowing how the Forex market works. Even if you read this article until the end, you cannot become a trader unless you have the experience.
So how can you learn to trade and how can you get the experience? First, you need to understand a few basic things and how they work.
imagine if you're a pilot and you have an airplane in your control. You're traveling to another country. Whether is good then you suddenly see a storm so you have to control the airplane correctly otherwise things might go wrong. You must have focus and training before controlling the airplane correctly.
Now the same thing applies to Forex trading. You can imagine the airplane as a trend in the Forex market. The trend is something that when buyers decide to push prices higher and higher or when sellers decide to push prices lower and lower. To become a trader to you need to train yourself to see the trend correctly and see if buyers are going to win or sellers. Even if you guess the direction of the trend correctly you need to understand when the trend ends. Sometimes trend direction is not always clear and things might be stormy and you need to not trade.
What are the ways that you can guess the trend correctly? To answer that question, you should know at least know what a candle is. When buyers or sellers decide to push the price up or down and close it at a specific price a candle is formed. A candle might also have wicks. if it's a bullish candle(buyers) the smaller the upper wick, the better. and if it's a bearish candle(sellers) the smaller the lower wick the better.
If you see 2 or more bullish sequential candles that means the bullish trend(buyers) is getting stronger. And if you see 2 or more bearish candles that means the bearish trend(sellers) is getting stronger. The bigger the candles are the stronger the trend. You need to watch the candles closely and see if buyers will be in control or sellers. Sometimes it might be better to not do anything because there might be no trends in the market.
Any trend has also pullbacks. For example, even if you see a very strong bullish trend you might want to wait for prices to come lower before buying it. This is the moment that will define your trading career. If a pilot makes a mistake and land the plane incorrectly the plane will crash, the same thing applies to trading. If you're not a patient trader and you trade without focus you will make mistakes. You need to have focus and see if your guess is true or not and that takes a lot of practice. You need to watch the price through the storm and see what the direction might be and see if you can buy or sell prices at a discount. Sometimes you might be confused and that's ok. When you get confused you should do something else instead and restore your focus so you can trade again.
To be a consistently profitable trader, you need to have a plan. For example, I like to watch trends and spot a really strong trend, then I wait if there is a possible pullback then I buy the prices. Your plan might be different. You need to make a plan that you are comfortable with and practice that and you get better with that plan. If you're a true trader it does not matter if you win or lose you will always keep trading and get better.
To understand the forex market, you need to learn the market structure. Market structure is a battle between buyers and sellers. You need to see what price levels are important for market participants and see what is happening at each stage of the battle.
The market structure consists of levels. The important price levels are called support and resistance. Support levels are where buyers are active and push the price up and resistance levels are where Sellers are active and push the price down. To spot these levels, you can use the help of indicators that show these levels, for example, the Ichimoku Cloud indicator.
When price approaches support and resistance levels it tries to break those levels and pass beyond them. The price should have enough momentum and energy to pass those levels. Sometimes price passes an important support and resistance level but because it might not have enough momentum it bounces back.
Market structure is different depending on the timeframe you're using. It takes one minute for a candle to form in the one-minute timeframe. It takes four hours for a candle to form on the four-hour timeframe. The timeframe you want to use depends on what your preference is. If you want your trades to be faster you can do them in the one or five-minute timeframe. If you want to wait and think about your trades longer you can use the four-hour or the daily timeframe.
If you make a mistake, you can feel it right when you open a trade or maybe an hour after it, if that happens you should close your trade and take any possible loss. You should accept losses in Forex trading because they will happen and you want to want to minimize your losses by accepting them and closing your losing trades before it's too late.
There are either losing trades or winning trades. If you feel that you don't know if it's a losing trade or a winning trade you should exit your trade quickly before it's too late. You should always know what you're doing and have confidence in your trades. Leave no room for doubts and enter trades at the best market condition possible. Always choose the best condition and better.
The forex market is unpredictable but it can be predictable at times. Your job as a trader is to try to make a prediction based on your plan and strategy. The best strategy is the strategy that you are comfortable with and know how it works and you know when to apply it. It could be a very simple strategy that you have made up yourself and you know how to spot it when it happens in the market.
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