frequently asked questions about forex trading

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This post is my best short at responding to frequency asked questions about forex trading since I receive a lot of emails from forex traders every month. 

  • 1. I am interested in forex trading, how do I began?

  • 2. What Is the best trading Indicator ?
  • 3. What’s the best forex trading strategy that works more consistently?
  • 4. How to get rich quick trading forex?
  • 5. Forex Trading Books You Need to read
  • 6. What’s the best forex broker?
  • 7. How much do I need to start trading?
  • How long will it takes for you to become a successful trader

Inspired by these  above frequently asked questions, I decided to write this article. I hope you find it useful.

#1. I am interested in forex trading, how do I began

If you are new forex trader and want to learn how to trade, you have two choices: you can pay Someone to teach you or you can learn to trade online on your own, heck you can learn to trade and become a consistent profitable trader on your own with the information I share on this side for free and you don’t have to pay a penny for it.

To make things much simpler for you I have written an article on how to become a profitable trader step by step and that article can be found here. Joining my mentorship would also speed up your learning process. Here are the reasons to join my private room

#2. What Is the best trading Indicator?

There are some traders who spend a lot of time searching for “best trading indicators” These traders that seek such an indicator are often referred to as traders looking for the Holy Grail.

If you have been searching to find that perfect combination of indicators, as most forex traders do, you have been misdirecting your focus and you are wasting your time because there is not a single indicator that is better than any other or that can guarantee profits.There is no Holy Grail. 

After all, all trading indicators are Condition-dependent. For example, Lagging indicators are more useful during trending periods. This is due to the fact that lagging indicators tend to focus more on the trend and produce fewer buy-and-sell signals whilst a leading indicator is thought to be the strongest during periods of sideways or non-trending trading ranges.

The leading indicators will create reliable signals on a choppy non-trending markets instead of trending markets. This simple means if you want to use oscillators, you should only use them  on a non- trending markets.

I personally don’t recommend any trading indicator but if you feel deep down inside that indicators are the way to go, that’s okay, but before using any indicator, be sure to understand what it measures and how it works.

To learn more about trading indicators make sure you check this article I have written here.

#3. What’s the best forex trading strategies that work more consistently

When traders ask me, What’s the best forex trading strategies that work more consistently, my answer is always clear. It’s the Price Action. Simply because it works, it tells me everything I want to know about the forex market, it is easy to learn and understand, price action signals are very easy to sport, no need to use indicators or get involved with the news. It is just simple!!

If you are serious about about becoming a consistent profitable trader, price action is the way to go. Otherwise, you will end up wasting you time and money moving from one strategy to another, one indicator to another. You really don’t have to believe me  or anything you read on this site. after all this is just my opinion. If you think what I am saying is crap then so be it. However, having been trading forex for as long as I can remember, I have tested hundreds of trading strategies therefore I can tell you that there’s no better indicator than raw price action. By using simple price action strategies you’ll reduce the learning curve by half if not more.

Two of the most powerful and reliable price action trading strategies in forex market are trendlines and support and resistance. There are  two types of trendlines: upward sloping trendlines and downward sloping trendlines. I am not going to get deep into support and resistance levels strategy because I have already written an article called ” everything you need to know about support and resistance levels” if you don’t know much about trendlines make sure you also check this article here.

Master one or two price action strategies at a time…Forget about trading indicators. In fact, let me tell you a little secret you may or may not know about trading indicators: Every technical trading indicator that exist is because of price action. It doesn’t matter if you use a moving avareges, Stochastic or RSI, leading or legging indicator they all rely on price action.

Remember: Whatever you do, keep it simple. Learning how to trade Forex doesn’t need to be a complicated process. In fact, it should be just the opposite.

#4. How to get rich quick trading forex

This question is probably the most asked question. For some reason, people equate trading to “get rich quick”. I get it. That’s what also attracted me to forex and I am guessing that’s why you are here reading this post, right? Right.

You want to get rich fast, right? I am sorry to burst your bubble but that’s not going to happen, you are not going to get rich quick trading forex. Yes, money can be made if you take the necessary study and preparation to learn the essential skills and strategies.

Invest your time and effort to learn about forex and forget about making a killing in a short period of time. it take lots of work, frustration, and perseverance to get there. So if you’re not prepared to commit to roughly ten times more effort than you’re expecting, then you’re only wasting your time and money.

#5. Forex Trading Books You Need to read

Trading books are one of the best ways to learn about the forex market but finding good Forex trading books to read can be more challenging than one might think since there are plenty of options to choose from. To make things easier for you i have written and article about the 5 best forex trading books. Make sure you check the article here.

#6. What’s the best forex broker?

Because I understand how difficult it is to find a reliable forex brokers you can trust with your hard-earned cash since there are thousands of online forex brokers to choose from.

I decided to compile a list of most reliable and recomended forex brokers to help you.

Please note that  I am in no way affiliated with any broker nor do I gain anything from mentioning any of these forex brokers on this site. If you see a forex broker recommendation from me, it’s because I did my research and I think they might be what you are searching for.

Below there is a link about top 20 forex brokers that are highly recommended by other forex traders. This list is based upon the reviews from individuals forex traders from different  websites. Therefore, my opinion plays no role in deciding which brokers make this list.

Top 20 most reliable and recommended forex brokers in the world

 

#7. How much do I need to start trading

The amount of money you need to trade forex will be determined by your goals and not by those minimum deposits from online retail brokers. Are you looking to simply grow your account in the long run, or do you seek regular monthly income from your forex trading?

It is important to be realistic about what you expect from your forex trading. How much money you deposit plays a crucial role in how much you will likely make if you follow proper risk management

If you are new to forex trading and you’re just looking to test the waters, then you can likely begin with as little as $500- $1000. Starting small will give some flexibility in how you can trade, an opportunity to feel what’s like to trade on a live forex account and actually risk you own hard-earned cash and also get to know the forex market and your trading platform. If you are disciplined enough and follow money management you can grow that $500 account and double it maybe after a year or so.

However, If you are looking for decent income stream, then $500 is not enough.  for decent profit, I recommend opening a trading account with at least $3000, preferably $5000.

I say 5000 because your trading account can suffer a big draw down and still survive if you are strict in your forex money management. After all successful trading is about winning in the long run. To win in the long run, you must not be wiped out in the short run therefore you need enough to avoid blowing up and I think $2000- $5000 will be much easier to increase than it would be for a $500 account. Again, This is just my opinion.

I am not saying it’s impossible to open a $100 and grow it and you shouldn’t do it. It is possible to start an account with a smaller amount, such as $50 or $100 but if you open a $100 account it would take you a very long time before you can start making decent profit, it can even take you 2 or more years to make it to a $1000 therefore you must make a commitment to grow the account for at least  few years before withdrawing any money.

Now, I am aware that most of novice traders are under-capitalized. And they end up opening $30, $50 or $100 trading accounts but, let’s be serious here, if you want to start trading, it’s likely because you want an income stream. Well, you aren’t going to have much of an income stream if you start with $100. Since very few people are patient enough to let their account grow, they will risk way too much of their capital on each trade trying to make an income, and in the process they blow it.

If you are a begginer and you can’t afford to open a $500 trading account then you’re better off saving up more money before opening a forex account, thus adequately funding their account so they can trade properly. It is also important that you only trade with money you can afford to lose otherwise, stay away from forex trading.

#8. How long will it takes for you to become a profitable trader?

Unfortunate there is no scientific formula to calculate how long it would take for you to become a profitable forex trader. However, if you are discipline enough to follow the rules of your trading system including your trading money management rules, if you are patient enough to wait for best setups to form on higher time frames ( daily and weekly) then forex success might come your way sooner than you may think. Just know you are not going to become rich over night trading forex.

Now It’s Your Turn to ask questions…

If you have any questions about forex, please feel free to ask anything in the comment section below, I’ll answer as soon as possible.

Don’t forget to check this week’s free price action trading signals here and my private room here. Otherwise, good luck with your trading.

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