By Paul Langer

A Forex Trading Guide for Beginners

Many of us started this journey because we wanted financial freedom, a way to live life on our own terms, and an escape from the rat race, however, there’s so much noise out there that it is sometimes difficult to find a Forex Trading Guide for Beginners, that is not just full of fluff, or a way to lure us into buying something. 

That’s why I decided to write this article where I am going to outline a clear roadmap to help you in your journey to start trading, even if you have been struggling to start trading, you could use this as a reset.

It’s not a complete trading course, and you will need to do more investigation, but it will serve you as a bird’s eye view of what is really important and what really doesn’t matter. 

I won’t push any product on you, well, only my course, but it’s not like you HAVE to buy it to be successful, it’s just something that will give you all the information you need in an orderly fashion, but you can also find everything yourself for free on the internet.  

The aim of this article is just give you the important pointers you need to start on the right track. 

The article I wished I read when I wanted to start trading. 

As you might know by now, Forex is a huge market, and trading it, although not easy, doesn’t have to be complicated.

When I started trading, I decided I wanted to read all the trading books, take all the courses, hire mentors, and spend a lot of money to learn this craft. 

Truth be told, I didn’t need all that. 

In the end, I realized that there’s no “secret” to Forex trading as many claim, but more about that later, because maybe you won’t be ready yet to hear what I have to tell you. 

But if you pay close attention you might find a couple of points of solid advice that could potentially help you avoid the years of frustrations I had to go through before I was able to become a profitable trader. 

Section 1: Understanding Forex Trading 

Here’s the part where I tell you about pips, and pairs and sells and buys… but I won’t, why? Because that is common knowledge by now.

If you need a free course to guide you through all of the terminology and the most basic concepts head to this link and come back. You can also buy my course… wait, I told you I wouldn’t sell you anything so… nevermind

This Forex Trading Guide for Beginners, in my case at least, is a way of telling you what you REALLY SHOULD KNOW before you start trading. 

So I will write down seven bullets you need to ingrain in your head, write them down in your favorite notebook, take notes on a blank piece of paper and hang them by your computer monitor, take a picture with your phone, or whatever works so you don’t forget. 

  • Forex Trading is not a “Get Rich Quick” scheme, but once you understand how to play it the possibilities are endless, act patiently and diligently; you are entering a game played by brilliant Ivy League minds. But don’t get discouraged, there’s plenty for everyone. 
  • You can keep on learning everything there is under the sun about trading. You could spend years studying indicators, Moving Averages, MACD, technical analysis, Fibonacci, Fundamental Theory, Order Blocks, and Stochastics… but you know what? You are not here to become a Forex Trading Scholar, are you? You are here to make money. 
  • To make money on the Forex Market you need to find something that works FOR YOU. That’s what makes it so elusive. We’re all different. Let’s say, trying to find a parallel, you want to learn how to approach people from the opposite sex. You can read all you want, you can talk all you want about it with others, and the experiences of others will definitely help, but to actually become a master at it, you will have to find your own way. And above all, practice. 
  • Read some books, take it slow, and see how others have failed and succeeded before embarking. Enjoy the process, and get inspired. If you learn how to trade, You will gain an invaluable skill that will serve you for the rest of your life, take it seriously but not too seriously. 
  • DON’T gamble your money, please don’t! I lost over $50k when I started because I didn’t have a real beginner’s guide to Forex Trading and I entered the market with arrogance. “This shouldn’t be that difficult”, it is, and they will take every single dollar from you. You will live and die by FOMO until your account is wiped out. 
  • DON’T GAMBLE YOUR MONEY, DON’T GAMBLE YOUR MONEY. Sorry to be so intense, but I have to tell you this a second and a third time. Don’t be impatient and eventually good things will come. Stay consistent in your study, respect the process and you will see results. 
  • Open a demo account and start playing with fake money, do it for a month or two, or a year or two until you can become profitable. If you feel the urge to gamble at some point and don’t want to listen to my advice fine, open a small account with a bit of money you are willing to lose or “give away” to the market as tutoring, use a small amount, please. There’s a very big chance you will lose that money, lose it wisely. 

Section 2: Getting Started in Forex Trading

  1. To get started in Forex trading just go here, or to any reputable broker that allows citizens from your country, and open a DEMO, I repeat DEMO account. 
  1. Learn to enter and exit trades, it’s just fake money, so don’t worry if you lose it, you can always reset the account. I would recommend you open a Trading View account, we all started with MT4 and MT5, it’s only that I feel right now they’re not as updated as they should be, Trading View is way more modern. 
  1. Stop loss is your favorite tool to become successful. Always enter a trade with a Stop Loss order, it doesn’t matter what others tell you, you should enter a trade only if you know how much you are going to lose and have an expectation of how much you are going to win (take profit). However, the Stop Loss is way more important than anything. 
  1. Schedule your trading. Are you planning to trade after work? Before work? Are you planning to scalp the US session? All are good, just remember it’s going to take you several months (or more) to learn this. Don’t approach this with a get-rich-quick mindset. Start trading with consistency according to your schedule. Two hours a day? Only on Mondays? It doesn’t matter, just do it consistently. 
  1. But I don’t know how to trade! You will say, it doesn’t matter, trade by heart at least for a few weeks. And that’s why Forex Trading Guide for BeginnersDo you feel it’s going up, awesome! Buy. Do you think it’s going to dump? No worries, sell. Do you want to risk 30% of your account? Do it! Always, always, always use stop loss, and make a habit of entering a stop loss with your order. That’s the most important lesson here. 
  1. Enter and exit trades without any emotions, don’t waste your time worrying if you lose or getting excited if you win. You are just learning to use the platform, seeing how the leverage works, and observing how the market moves. Please don’t make this a quest to make fake money, you will ruin your psychology from the start. Watch the market move up and down. Observe, experiment with crazy stuff, and have fun. 
  1. Journal your trades. I know this is boring and time-consuming. But don’t overestimate the power of journaling. It’s your key to understanding your psychology, what works and what doesn’t, and overall to have control over your trades. Otherwise, you will just be trading without any compass. Use an Excel sheet or Notion, enter at least your entry, your exit, and the reason why you decided to take the trade. If you can, take a screenshot of the setup so it’s easier to review later. 

Section 3: Developing a Trading Strategy

What is a Forex Trading Guide for Beginners without a roadmap to actually start trading, even in demo mode? So after at least 3-6 weeks of consistently trading “by heart”, you should be familiar with the platform.

You should have some understanding about the time of the day or the week when you decided to trade. And more importantly, it should feel like second nature to enter and exit trades, and use your stop-loss. 

OK, so this is the next step. Spend at least 4-8 weeks experimenting with different indicators and strategies. Again, my course will help you with that a lot, but you don’t have to use it if you want to save a few bucks and you prefer to invest a lot of time finding everything yourself, the information is already there all over the internet. 

This is what I recommend you start with: 

  1. Price action trading, learn about how to read trends, trend reversals, and ranges.
  2. Candlestick patterns. Don’t go too fancy, just the basic ones, you don’t need to become a candlestick ninja. 
  3. Pairs, what are the pairs that move the most during the times you are trading? Don’t overcomplicate this, if you are day trading or scalping my recommendation is to stick to one or two pairs until you really understand how they move. 
  4. Support and resistance. This is one of the most important concepts in trading and they work because everyone is looking at them all the time, remember that higher time frames like daily or weekly are much more important than shorter timeframes like 1-hour or 15 minutes. 
  5. Basic indicators: MACD, Stochastics, RSI. They are not useful on their own, but they can be a good confirmation tool. 
  6. Fibonacci retracements. I don’t use them very often anymore, but they are a valid tool to confirm your trades.  
  7. Moving Averages. These are very simple to understand and many traders use them, again, they can be useful combined with others. 
  8. News, learn how news events affect trading. The general rule of thumb is don’t trade during major news events.  
  9. Trading patterns, again, stick to the basic ones: double top and double bottom, head and shoulders mainly, flags and pennants can be useful too. 

You don’t need to use all of these things all the time, take them as a starting point to finding your own trading style, and review this Forex Trading Guide for Beginners many times over to use it as a guide.

Maybe you find that for your swing trading style before the London session opens, a mix of support and resistance with MACD divergence and reversal candle patterns in a 1-hour timeframe suits your style. 

Or perhaps a trend following using Exponential Moving Averages and Fibonacci retracement as confirmation in the 2-hour timeframe is your go-to starting point. 

Whenever you decide to try a strategy don’t go blindly messing with the indicators or lines. Write down your rules in a very clear way. For example: 

EUR/USD Day Trading Strategy 1 (SAMPLE)

  • Trade only during the NY session
  • Determine Support and resistance from previous sessions
  • Determine if the market is ranging or trending 
  • Use the 15-minute timeframe to find entries
  • Enter at the top or bottom of the range if a double top is confirmed
  • Exit by the middle of the range only if there’s at least a 1:2 win ratio 
  • If the market is trending wait for a retracement to the 0.618 level 
  • Exit at the next support or resistance only if there’s at least a 1:2 ratio 

Rinse and repeat, observe, take notes, and try at least a hundred times. Of course, if you don’t want to wait all that time until you try this for so long you can start by backtesting.

Go back a few years and try your strategy 50-100 times and determine if it can be good or not. If you see it as something promising try live on your demo account. 

In my course I show you several strategies you can try, but you can also go to YouTube and type: day trading strategies or swing trading strategies for the Forex Market, or whatever.

Just don’t buy expensive indicators, robots, signal providers, or expensive courses, they don’t work 99% of the time.

Conclusion to A Forex Trading Guide for Beginners

As you begin your journey into the world of forex trading, it’s essential to keep in mind that success in this field doesn’t happen overnight.

It requires patience, dedication, and a commitment to continuous learning. While the allure of quick profits may be tempting, it’s crucial to approach forex trading with a realistic mindset and a long-term perspective.

Throughout this Forex Trading Guide for Beginners, we’ve covered the fundamentals of forex trading for beginners, including understanding the market, developing a trading strategy, and getting started with demo accounts.

By now, you should have a solid foundation to build upon as you embark on your trading journey.

Forex trading is not a one-size-fits-all endeavor. What works for one trader may not work for another. It’s essential to find a trading style and strategy that aligns with your personality, risk tolerance, and financial goals.

This may involve experimenting with different indicators, timeframes, and trading techniques until you find what works best for you.

Remember, trading is as much about managing risk as it is about making profits. Always use proper risk management techniques, such as setting stop-loss orders, usually around 0.5% to 2% of your account. Additionally, keep your emotions in check and stick to your trading plan, even when the market becomes volatile, and especially when you have a losing streak.

While this guide has provided a solid starting point, there is still much more to learn and explore in the world of forex trading. Take advantage of the plethora of educational resources available online, including books, courses, forums, and webinars. 

Above all, approach forex trading with a growth mindset. Treat every trade, whether it ends in profit or loss, as a learning opportunity. Analyze your successes and failures, and use them to refine your strategy and improve your skills over time.

Remember, the journey to becoming a successful forex trader is not one that you have to navigate alone. Feel free to connect and ask any questions you might have. 

Start your forex trading journey with confidence and determination. With the right knowledge, mindset, and support system, you have the potential to achieve your financial goals and live the forex lifestyle you’ve always dreamed of.

Leave a Reply

Your email address will not be published.