I am guessing that we all have clicked and hoped. Then we clicked again and hoped some more. We have entered trades not knowing what we were doing, having no clue, which way the market was going, or even how to determine which way it was headed. These are frustrating times as well as costly times even if we are only trading a demo account. With a demo account we only lose our confidence, with a live account we lose our confidence and our money.
We make mistakes and don’t even know what the mistakes are. We have perfect hind site and can see exactly what would have made us a lot of money. We go through this over and over until we have blown up several demo accounts and we still do not know what we are doing wrong. This is the Mistake-By-Mistake method. This is the hard way to learn to trade. We think most of us can relate to this type of trading.
When we find a trading strategy that fits our way of trading and thinking, it just feels good. This will be different for everyone. We then will start to make progress in our trading knowledge. We see many traders go from 8 to 10 indicators back to 3 or 4 indicators. We found that less is better. It seems to be a cycle of over analyzing with many losses, then going back to more exact signals with less analyzing and more winning trades.
We go from not using stop losses back to using stop losses, from not knowing what money management is to following a solid basic money management system.
Here is a suggested Step-by-Step approach.
1. Learn a trading platform
2. Learn the currency terminology
3. Find a trading system that fits your personality (day trading, swing trading or position trading)
4. Develop a study program
5. Develop a trading plan
6. Keep a trading journal
7. Learn how to use indicators to trade the market not just price movements
8. Practice simulated, demo, visualization, then live trading
9. Learn good money management principles and use them
10. Start out slow on your live account. When you become a good trader the money will come