How Does One Know When They Have Become a Real Forex Trader?

This was a good question asked of me recently. How does one know once they have broken that barrier between an average trader that does not know what they are doing fully to becoming a trader that understands the market overall. This one is such an obstacle to us all.  When i first realized my trading style had improved to one of understanding it was almost like a ding dong moment, like almost a light bulb going off in the brain. In another sense it is like walking through the rain and then the sun comes out, it really is that big a deal.

Okay so first thing is first, there are so many marketing Forex Guru’s out there saying this and that. It can be so overwhelming can it not? This strategy, that strategy etc etc. It is almost like trading seems to work for everyone else except you. Well, the truth is trading works for you as well it’s just that there are just some issues you need to address first.

Above – Do you see the patterns of the candles bouncing off support and resistance areas? Price action signals at these lines show the overall flow of the market. Click image for larger view.

How You See The Charts and Chart Time

Make sure to always look at the charts, the higher the time frame the better however it works on all time frames. Get a feel of how the market moves. This needs to be done by all forex traders. I call it chart time. Once chart timeyou can see the patterns clearly you will find that looking at charts can be less and less. So for beginners, if you are losing at trading one of the main reasons could be that you have not done enough chart time. For me, while i first learned trading i spent over three months looking at charts daily looking at how they moved. I figured that if was going to trade real money the charts was the key and i tell ya it is.

If when you look at the charts you see only lines or candles then this is a must. There will be a time after weeks and weeks of time spent that you will yourself have a light bulb moment. In a way like looking at one of those 3d images. Once this happens any other information shared to you in forex is much more clearer. You need chart time.

How Many Trades?

This one is important as well. You need to do over 10000 trades before you should expect to be able to trade like an expert. It’s like anything, learning to walk, learning to talk, it all takes practice, practice, practice. Especially when learning how to trade to make some really big money. This can be done in weeks on a trading simulator or can be done over many months by using real money or a trading demo. If using real money as i recommend do so only with micro until you manage to double or even triple your money.

No Indicators

If you are using indicators then definitely you will be hindered by lagging prices. Remove these before learning this valuable lesson years down the track. The only things things that should  ever be on any chart is lines for confirmed support and resistance drawn by you, trend lines and for maybe a basic moving average to remind you of the direction of the trend. Anything else is just going to hinder your learning curve. Instead you need to do what price is doing right then and there. And how do we do that..? Well, that’s where Price Action comes in.

Price Action Trading

Learn price action. This is key once you can recognize patterns in the chart. When combining Price Action trading, support and resistance lines and chart understanding you really have a magical formula. Well more so a formula that works. To understand what i mean, let’s take a look at all the top traders that are making big money in forex. Let’s focus on the ones that do it for a living. What do all of them have in common, well that is easy, they all use price action as there price entry and exit. That tells us what, price action is where you want to be. No matter where the price goes with price action you will always be able to see another pattern to get in.

Money Management
I am sure you have heard this before, but it is true, why risk what we are gaining, instead risk either our profits only or risk less than 2 % on any given trade. This will allow you to lose big on any wrong assessment. It works and so should be respected. Money management like i have mentioned before has two sides, a hard stop or a hedging factor. Each one is up to you.

Overcoming Fear

This is another big obstacle that is overcome in time. When one trades you have to be courageous, you have to take some types of risk otherwise you will just end up not trading at all. When you place a trade stick to it until the market says otherwise or just set your stop loss and take profit and let the market decide. If you are reading the charts right, you have to believe in your decision. Fear is no good in any situation, that is where listening to the news unless it is big news can be trading pitfall. Take notice of the news but do not let it run how you see Price Action on the charts. Price Action will always show news response anyways. Believe in yourself and also believe in the chart.

About Timon Weller

Timon Weller is the professional Writer and Trader behind the blog Forex Reviews. Timon Weller is also a professional Teacher of Price Action Trading and creator of the popular Training Series teaching people how to trade Price Action effectively called The Engulfing Trader. For other Forex Training available here at Forex Reviews click here.

For more on Timon Weller Click Here. To Learn more about How to Trade the Market and get updates Click Here.

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