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It is Crucial to get a Forex Trading Education

Why it is Crucial to get a Forex Trading Education

 

Often, Forex Trading is marketed like a get-rich-quick scheme. But Forex traders need to know that trading is a skill. Just like any other profitable business, you need to know what you're doing before you make money. This is why you need a Forex Trading education.

Now that Forex tutorials are available online it's easier than ever to learn, and there are huge advantages to getting that education.

Understanding the basics

When you start trading Forex, you'll find concepts and terminology which may be difficult to grasp. It's very different to other types of trading, so even if you have some experience, you may not be familiar with terms such as pips, drawdown, stop loss order, Forex spread and margin call. But with web tutorials, they'll soon be a part of your vocabulary.

Create your plan

As a Forex trader, you'll want to create a plan of action. A Forex trading plan will be the gamechanger that has you earning big. It will also keep you disciplined and stop your emotions from getting the better of you.

Mentoring

Getting a good Forex trading education is more than simply reading up on information online. Video tutorials, Webinars, and expert traders are available to provide you step by step lessons as to how to be a top trader. It is impossible to get there alone. With mentors available, it is necessary to try go it alone.

Learn the importance of macroeconomics and global news

An important part of your education, that you cannot get just by looking at the numbers, is learning the context of a currency. This requires you to learn about the country’s historical context, as well as any global news stories that will affect it now or in future. A good Forex trading education will give you the skills to keep up with determining factors.

Balancing leverage

Leverage is a huge factor in making money through Forex trading. With high leverage available, it can be very tempting to take big risks. Sometimes they will pay off, and you'll make big money in a short amount of time. Conversely, you can lose just as much, as quickly.

Learning how best to make use of leverage is an essential part of a Forex education. You need to find out how to balance risk and expectations so that you don’t make big calls without all the information.

Trading psychology

An aspect of trading that can never be stressed enough is the impact of trading psychology. You need to learn how trading can affect your mindset, and how your mindset can affect your trades. If you don’t know how to recognise when you're under too much stress, you'll end up making emotional trades, potentially losing a lot of money. A good Forex trading education will teach you how to regulate your emotions.

Getting a Forex Trading Education

It may have been difficult in the past, but now it is easy to get a good Forex trading education. There are articles, webinars, video tutorials, and more, all available online. Admiral Markets offers many free educational resources. Remember that Forex trading is not a game. Without an education, you're playing with fire.

 


 

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What Scalping Means in Forex Trading

What Scalping Means in Forex Trading And How To Use It

If you've never heard the word scalping used in Forex terms before, it probably sounds quite strange to you. But if you put the term into context, it begins to make a lot of sense. This is, for the more advanced trader, exactly how to scalp forex.

What is scalping?

Forex is the most liquid and volatile market out there. Many traders bear through minor fluctuations to gain high pips on their trade, but others “scalp”. Scalping is done to squeeze every small opportunity out of the tiniest fluctuations in quotes. You scalp the gains from minor changes in a very small timeframe.

Thus, scalping creates many opportunities throughout just one day. You'll almost certainly get an entry signal, which makes it quite popular.

Traders who scalp Forex do not expect gains of more than 10 pips, and losses of more than 7 per trade. Scalping is done, however, with high volumes, and most traders who scalp are not following the common 2% risk management rule.

Scalping In practice 

Traders generally tend to scalp currency pairs using a 1-15 minute timeframe. The 1 and 5 minute timeframes are the most common. Small gains are expected on these trades. 1 minute may give you a gain of 5 pips. 5 minutes may give you a gain of 10 pips. 

Since you're working with a lot of fluctuations, you have to choose currency pairs that are extremely volatile. If you go for pairs with low volatility, you'll end up waiting minutes or hours for the price to change - defeating the purpose of scalping. 

Another important rule when selecting pairs to trade, is finding those that trade cheap, which will provide you with the lowest possible spread. The spread always lies between 10% and 30% of your income, and you want this to be as low as possible. 

You need to develop a trading strategy based on technical indicators, then pick the right currency pair according to the factors above. When you see an entry signal, you go immediately for the trade, and once you see an exit signal or have made adequate profit, you close your trade. 

It is also important to manage Stop Loss (SL) and Take Profit (TP). Using SLs and TPs with scalping may not be a good idea. Time management is very important with scalping, and you cannot waste time executing your trades. Once you have opened a trade, you might choose to set an SL and TP, but most traders won’t. If you are fast enough, it is a good idea to do so.

The size of the spread is incredibly important, as the higher the spread, the more you'll have to expend on opening a position. This rises disproportionately, and not in your favour, so go for the small spreads.

Execution is also key. Dealing desks make scalping currencies especially difficult, as you could get your order refused by the broker. It’s even worse if the broker does not allow you to close your account when appropriate, which can kill your trade. Choose a broker that offers STP or ECN execution, and accommodates scalping.

These are the basics of how to scalp Forex, but there are many more factors to find out about. See Admiral Markets’ page, which explains everything you need to know.

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