For Trading Futures/Forex, Before You Can Earn You Have To First Learn


Trading Futures / Forex can be very confusing for those just beginning their life as a trader. Too often novice traders focus all their attention on earning. How much am I going to earn? How many trades do I need to do to get me there? They take out spreadsheets, calculating the numbers. If I double down my earnings then in 6 months I can be making 5 times what I am making now. But here's the problem: if you focus just on earning and not on learning, you won't need to worry about doubling down your earnings...there won't be any.

Before you can trade the Market, you have to be able to see the Market. Right away novice traders want to open a brokerage account, put their hard earned cashed into it, and then start trading live, as if they were seasoned veterans. Forget the simulator, go straight to the portfolio. Trading is not, repeat, not an ATM machine. You don't just type in a couple of numbers and whammy...money pours out. You have to learn to trade. It takes time and patience, and most of all the ability to see the Market.

What does that mean, "see the Market?" When you begin trading futures, or stock or etf's for that matter, the first thing you need to do is watch the Market you intend to trade. Just watch. Do not try and trade that Market. Do not bring up your desktop software and start buying and selling. You just want to watch. For days on end, all you will do is watch. You want to see how the Market trades in different conditions, how fast it trades, how many buyers and sellers are investing in the same Market you are. Just sit and watch. It may take some days but after a while you will start to appreciate the Market you want to trade.

For best results, watch the Market at the same time each day. That is because you will be trading with the same traders every day. You'll come to recognize their trading patterns, what they want to accomplish, how long they remain in trades, etc. In short order, your ability to "predict" their behavior will improve, little by little. But most of all, your confidence in understanding that Market will improve, dramatically. You'll know what the Market is going to do, why it is doing it, and just how you want to trade it.

Once you have developed confidence in what you see, the next thing you want to do is start trading with a simulator. No cash, not yet, just simulation. See if what you thought was true about the Market is really true when you start to execute your trades. Simulate trading for days and day, just like you did when you were just watching. But simulate for blood, not just as a game. Simulate your trades just as you would were you trading live with real cash. And when you can achieve at least 85% success each day for all your trades, over several days, you are ready to trade live.

By the time you are ready to trade live, your confidence in trading should be very high. You've spent your time learning, not earning. You've focused on understanding the tools of trading so that you can be successful. You did not rush into buying and selling, putting your portfolio at risk for no reason. Instead you chose the sane way of becoming a successful trader.

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