The following question came in from a budding new trader named Adam.
Really like to start day trading currencies, have no experience whatsoever – but what I got is the will to succeed in this field, and I thing the proper set of mind. Wish to find out with the $1000 account and I am successful go with 25K account for live trading. What would be the best way to approach and to learn the skills. Can you advise?
This is one of those open-ended questions which are really hard to answer with any specificity. It ends up making me ask some questions in response.
First, what inspired Adam to pick currency trading over the other alternatives?
Did he pick forex based on some marketing message, or after hearing it was a good market? Or did he do his research and identify that as the best market for him? If not, my suggestion is that he step back and do a proper evaluations.
Second, why day trading?
Again, did Adam select day trading after consideration of all the alternatives? Or did he just hear that it was the thing to go? As with picking a market, thought needs to go into these decisions. Day trading is the sexy thing to do (seemingly) but it is definitely not for everyone – or even most folks.
Obviously, I’m going to recommend reading my book, The Essentials of Trading, or going through my trading course of the same name, to anyone who is new to trading. Both were designed specifically for new traders.
Aside from that, though, for Adam it’s a questions of developing a complete understanding of the mechanics of the currency market. Then he needs to understand how and why forex rates move. Cornelius Luca is the author of a book which can help in that regard: Trading in the Global Currency Markets. It’s a pretty thorough discussion of theÂ forex market, if a bit textbookish (and don’t expect any specific strategy advice).Â
After thatÂ Adam needs to start developing a strategy for pulling profits out of the market and gaining the experience trading which is really important for consistent success. That means a lot of study, research, and practice with both demo and small deposit live account work.