Welcome to the Forex Trading School of Manual Trading Systems!
Forex Trading School…Class Is Now In Session
Today’s lessons will cover manual trading concepts and best practices. Pay close attention because falling asleep in class CAN cost you money!
Forex Trading School Lesson #1 – Manual Trading Overview
forex trading school manual trade Manual trading is where you, the trader, do all the work. Also referred to as “discretionary trading”, every aspect of the trade is 100% under your discretion.
You research information, analyze data, reach a decision, and then execute the trade.
You also decide where to place your stop-loss and when to exit the trade.
Forex Trading School Lesson #2 – Control Your Emotions
Making consistent profits from manual trading can be very difficult. It requires both intellectual and emotional intelligence.
You need to be smart enough to analyze and interpret information.
But you also need the mental discipline to prevent fear and greed from interfering with your trading.
If you let it, the Forex market can take you on an emotional roller coaster ride.
When that happens, you’re probably gambling and not actually trading.
Always be mindful that your Forex trading journey does not turn into a roller coaster ride.
Rather, stay on a smooth, steady train to profits!
Forex Trading School Lesson #3 – Information
Forex trading is all about information. This information can come in any form, including news, economic reports, charts, and indicators.
It can even come in the form of the “latest tip” from your neighbor at a barbecue.
However, information by itself is pretty much useless.
It’s the application of information that really matters, and this is what separates the good traders from the bad.
How well you can analyze and interpret information to assess future price action will determine your trading success.
Of course, there’s more to it than that.
Proper money management, setting stop-losses (in case you’re wrong), and emotional discipline are just as important in determining your success as a trader.
Forex Trading School Lesson #4 – Fundamental Analysis
Generally, there are two types of analysis you can perform as a discretionary trader.
Fundamental analysis is where you assess a country’s economic strength by reviewing news, economic indicators, and other “fundamental” data to determine future direction of the country’s currency.
forex trading school news You might even derive some insight from a Forex currency market report. Many Forex advisory sites provide such reports that go over trends in the currency markets.
This type of analysis is best suited for long-term traders, although one exception is when you trade on the news.
When important news hit the wires, the Forex market can react very quickly with a high degree of volatility.
With that said, be very careful if you decide to build yourself a Forex news trading system.
It can be highly profitable, but also very risky.
For example, when a very important report such as the NonFarm Payrolls report is released, I’ve seen price movement in the 50+ pip range occur in a matter of minutes.
Imagine being on the right side of the trade when this report is released…
…or the wrong side. Yikes!!!
Forex Trading School Lesson #5 – Technical Analysis
Forex technical analysis is what most short-term traders use to analyze the markets.
By looking at price patterns and technical indicators on price charts, you could anticipate future price action.
I consider this type of analysis part science and part art.
The “science” part consists of the rules and definitions for the various price patterns and technical indicators.
The “art” part involves your interpretation of these price patterns and indicators.
One trader can look at a chart and believe the price will go up. Another trader can look at the same exact chart and believe the price will go down.
Still, another trader can look at the same chart and think the price will go nowhere…simply fluctuating within a tight range for a while.
One of these traders will be correct…
…with enough practice and experience, that trader could be you!
Forex Trading School Lesson #6 – Trading Time Frame
As you start to trade Forex currency, one important aspect to consider is the amount of time you are able to devote.
If you work a full-time job, then you probably don’t have the time to sit in front of your computer all day to trade.
Even if you did have the time, perhaps you wouldn’t want to.
Your trading time frame will depend on how much time you have and are willing to spend on trading.
Generally, there are 5 types of trading time frames:
- Day Trading
- Swing Trading
- Trend Trading
- Position Trading
Forex Trading School Lesson #7 – Live Trading Versus Demo Trading
Forex currency trading for beginners can be very, very risky. When you’re just starting out and haven’t gained enough experience, chances are higher that you will lose your capital.
I’m not trying to scare you. It’s just the reality of the situation.
But don’t despair, there is a solution…
…you can demo trade!
Most, if not all, Forex brokers will allow you to open a “demo” account where you trade with fake money.
Demo trading eliminates risk, and it does help you practice your trading strategies.
However, it does not replicate trading reality completely.
As you trade Forex online with a demo account, one thing missing is the emotional aspect of trading. You’re not trading with real money, so you have no emotional investment.
For example, if you lose $1000 in a trade, you couldn’t care less. It’s not real money!
As soon as you start trading with your own money, however, it’s amazing how fear and greed can creep in.
But that’s simply the real test of your trading abilities…trading on a real, live trading account with real money.
As a beginner to trading, a safe approach would be to demo trade first. Then trade on a live account with a very small deposit of capital.
Some Forex brokers allow “micro” lot trading with no minimum deposit. With a micro lot position size, every one-pip move would be measured in pennies instead of dollars.
Trading on a live, micro account would help you experience trading using real money…
…and with real emotions, without risking too much capital.
Always, always take a conservative approach as you learn Forex online currency trading.
Your wallet will thank you for it!