My own trading education started 8 years ago, when I excitedly opened my first account, deposited $10,000 into my trading account, and then waited for the broker to confirm receipt of my funds. A few days later I received an email from my forex broker to confirm that my online trading account was now open. I can remember to this day what happened next!
I opened the forex trading platform, clicked on the screen and bought 2 gbp usd long contracts, 2 eur usd short contracts, 3 eur jpy short contracts and 1 gbp chf long contract. I had placed my first forex trades, and now just needed to relax and let the markets produce the profits that would allow me to retire. Having opened these positions in the late afternoon, I then sat up for the next 24 hours without a break, watching my trading balance swing violently between profit and loss, before lurching downwards and gradually gathering momentum as the New York trading session became the Asian trading session, followed by Australia, and finally back to the London session in the early hours of the following morning. Throughout the night I had watched in horror as my overall trading capital had shrunk alarmingly, from my initial 10,000 USD down towards 6,400 USD by the early morning, a twelve hour period that was punctuated, albeit only momentarily, with bouts of euphoria as the markets recovered slightly in my favour, only for my euphoria to be replaced with fear and horror once again as my trading capital sank lower once again. By early morning, and the opening of the London trading session, my capital was now close to an unrealised loss of $4000, not bad for one night’s work, and if it continued like this for another day, then I would be wiped out in two days, and no doubt receive the dreaded margin call. I can remember all too clearly the sense of fear and panic building through the night, as I sat there alone, staring out in the darkness with the rain falling softly and creating a mist around the street lamps outside, with only the occasional sound of a distant car, or late night party goer returning home. That was one of the loneliest nights of my life, as I sat and stared at the numbers flicking up and down, and with little idea of what to do, other than watch, hope and pray.
And then my luck turned, although of course at the time I had no idea why, but suddenly my trading account stopped falling and started rising, not slowly but very quickly. By the late morning I was almost back at break-even and despite one or two panics along the way, I had clawed back all my losses, and now had a small profit. I promptly closed all my trades in the early afternoon, had a shower and went to bed exhausted, where I slept for the next 10 hours, happy in the knowledge that I had beaten the market, and made $10 which had only taken me 24 hours!!
The above is a true story, and one I have told many times. It may strike a chord with you, it may not, but it is true nevertheless, and I now shudder at how someone with a reasonable degree of intelligence can behave so stupidly and irrationally. If you are just starting to trade in forex, then I hope the above is both a salutary lesson as well as a prime example of how not to trade, as I made every mistake possible. I was fortunate, and survived, and now make my living from both trading, and writing on the forex markets. You may not be so lucky. That was all many years ago and since then I have spent time years studying the forex markets, learning about trading strategies and trading signals, and studying trading charts until becoming an expert in all these areas. In addition, I took time to learn about every aspect of fundamental news, from every country, and how the underlying econmic picture affects the markets and respective currency rates. In addition I also understand about bonds, treasuries and yield, a subject all on its own! Someone once said that it takes 10,000 hours to become an expert in your chosen field, and for forex trading this is undoubtedly true. If you are not prepared to put in the effort required, then you will blow your account in much the same way as I almost did at my first attempt.
Over the next few months I will be adding a range of forex trading tools, along with details of my own trading strategies which I hope will help you in your own trading education. All the information I provide is free, and please do follow my daily forex market trading forecasts which you can find here – I trade many of these pairs regularly, so know them well, and understand them even better, so hopefully you will find the anlysis useful in your own forex trading. Whilst my trading decisions are based on a technical analysis of the chart, I am always aware of the fundamental news due for release during the trading day, and its likely impact on the pair I am trading. Never let anyone tell you they are purely a technical trader – no one is, so you have to understand the economic news and why it is important, as well as becoming an expert in candlestick chart analysis. Just by reading my own daily forex trading analysis should help you to learn and understand the charts more easily, and I hope through this site I can become your trading mentor, and help you to avoid the ghastly mistakes I made when I started.
Oh and by the way, in case you were wondering – it was a fundamental news release that saved my account – so I have started with an excellent economic calendar which will highlight all the latest news releases for all the major countries, along with forecasts of the likely numbers, impact on the forex market, and previous release information. Trading the news is one of the forex trading strategies I use a great deal, so I use the calendar all the time in my own trading. In addition you will find many other trading tools which I will be adding to over time, to help you become a better forex trader. So start your trading education now.