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Forex Trading For Beginners – How Do You Get Started 

Last Updated: July 13, 2022

By Rayner Teo

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In today’s episode, you’ll discover a simple framework in forex for beginners to help you get in your Forex trading journey.

So tune in right away…

Resources

Forex Trading Basics

The NO BS Guide to Swing Trading

How to Write a Trading Plan

The ONE Thing Winning Traders Do That Losing Traders Don’t

How to be a Successful Trader — A Step by Step Guide

How to Use Trailing Stop Loss (5 Powerful Techniques That Work)

Transcript

Hey, hey, what’s up my friend?

In today’s episode, I’ll talk about Forex trading for beginners – how do you get started?

I know most of you might have less than one year of trading experience and you can’t wait to trade the Forex markets, install your platform and click the buy & sell buttons.

But before you do that, hold onto your horses first because I have a framework that I believe will prove useful to you. It won’t even cause you to risk a single dollar in the market.

Follow this framework and I believe you’ll find greater success in the markets instead of just diving head straight and then finding yourself losing money day after day, week after week.

Let’s get started to learn forex trading step by step…

Step 1: Absorb as much as you can

I’m assuming you have less than a year of trading experience. So you don’t know what you don’t know.

You don’t know what the different types of trading methods are in Forex, you don’t know what’s the opening session, the closing session, the risk management, trade management, or the currency pairs, you have no idea what all these are.

This is why my suggestion, when it comes to forex for beginners, first and foremost, is to absorb as much as you can about this trading environment that you’ll be in. Understand what’s Forex, how it works, read books on it, and study books on it.

Study the different types of trading methodologies out there. They can be swing trading, day trading, or position trading, some traders even use fundamentals for their trading. Learn all you can about it.

Learn about technical analysis where you have tools like chart patterns, candlestick patterns, support & resistance, and trendlines. Study others’ systems, study everything that you can get your hands on.

I want you to absorb as much as you can, be it through reading books, podcasts, or blogs whatsoever.

Step 2: Find a trading method that resonates with you

This is dependent on two things, your circumstances, and your goals.

What are your goals?

Let’s say, for example, you get involved to learn forex for beginners, maybe to help you to beat the interest rates that the banks are paying you. Maybe you’re happy just making an additional 10% a year.

So find a trading methodology that allows you to generate, an average of 10% a year. This could be through swing trading position trading. Can you see how first and foremost you define the goal that you want and then you find the methodology to fit a goal?

On the other hand, let’s say you’ve just graduated and you want to generate a consistent income from trading. Maybe you want to get into the proprietary trading industry or work for a prop firm.

If that’s the case, that’s where you want to be geared towards shorter-term trading, day trading, and scalping the markets because that’s where you generate a high enough frequency of trades for the law of large numbers to work out in your favor within a short period of time.

(I know that’s a handful, but don’t worry about that first.)

So find out what’s the goal that you’re after and then find the trading methodology to fit your goal if you want to learn forex for beginners.

What are your circumstances?

Let’s say, for example, you’re in Singapore and you have a full-time job. You work from 9 to 6 every day. Clearly, you can’t be trading London breakout because you’re at work, in front of your work screen.

For that circumstance that you’re in, then possibly you have to adopt trading on the higher timeframe, the 4-Hour, the Daily or the Weekly.

So you’ll have to be honest with yourself, given your goals and your circumstances.

Next, the next step that I’m about to show you is important if you wish to learn forex for beginners…

Step 3: Dive deeper into the trading methodology you want to learn more about

Once you’ve identified the trading methodology you want to learn more about, I want you to dive deep into it. Study all the books, or even pick up courses, to learn more about the trading methodology.

Let’s say, for example, you find that swing trading is for you, I want you to study all you can about swing trading, like what is it, how it works, market conditions that you can capture a swing, the pros and cons of swing trading, and study books on swing trading.

If I were you, I’ll go to Amazon to search for swing trading books and stuff like that. Take up courses which share with you swing trading methodologies. Study all you can about swing trading.

Once you’ve learned a lot about the trading methodology…

Step 4: Develop a trading plan for that trading method

In other words, I want you to develop a trading strategy around swing trading if that’s the methodology that resonates with you, and the one you’ve done the research on.

This means you need to define things like:

  • The market conditions you’re trading in
  • Your entry trigger
  • Whether you’ll be buying breakouts or buying pullbacks
  • Your stop loss
  • How you manage the trade if it moves in your favour or against you
  • Your risk on each trade

This is what I mean by developing a trading strategy or a trading plan.

Once you have a trading strategy that you have developed, you’ve no idea whether it works or not.

This is when you move on to…

Step 5: Validate the trading strategy

This is a crucial part to learn forex for beginners where you can either trade on demo or open a really small live account to trade that strategy you’ve just developed that. Ideally, you want to get a sample size of 50-100 trades and see how that strategy fares in the real world of trading.

If it’s working great, you can make tweaks to it and make it work even better. If it’s not working your way, you gotta go to the drawing board again and find out where your losses are coming from and how you can improve on it.

This is just a very big overview of how you should approach trading in your first year of trading. There’s a lot that I’ve covered and I don’t expect you to hit all the 5 pointers immediately.

Focus on the individual steps:

  1. Absorb as much as you can
  2. Identify the trading methodology that resonates with you
  3. Dive deep into the trading methodology that resonates with you
  4. Develop a trading strategy around it
  5. Validate it

I hope this helps and with that said, I’ll talk to you soon.

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