Forex trading courses are essential for the new forex trader and also for the experienced trader looking to expand his or her horizons and learn new skills.
Often times, a trader will pick up a book or join a training program and only pick out one new point that they had not come across before, but that one small point will make a huge difference to their trading success, sometimes exponentially increasing their profits.
Soare a worthwhile investment for traders at all levels. However, it is the beginners who need more help in selecting the best course.
Practiced traders usually know what they are looking for, or at least what they are not looking for. Beginners need some assurance that the course they are considering is going to cover all of the basics that they need to know.
This means that forex courses for beginners should cover all of the basic and essential points of forex trading. That would include at least the following five topics:
1. Forex Principles and Terminology
This section should cover the basic principles of the forex market including how trading takes place and how profits are made. It should explain terms such as pips, spread, leverage etc, and should give guidance on selecting a broker.
2. Forex Fundamental Analysis
The forex market is driven by economic factors. Changes in indices that measure the economic performance of a country, such as the interest rate or the gross domestic product, are the real force between changes in the relative value of currencies. For example, an increase in the US GDP will be reflected in a rise in the value of the dollar, other things being equal. It is not necessary for a forex trader to predict the outcome of announcements about these economic indices but it is important to understand their impact.
3. Forex Technical Analysis
This is how most forex traders predict price movements. They look at charts and mathematical indicators which are provided either by brokers or by specialist charting services. Graphs such as candlestick charts record actual price movements in real time. Indicators measure factors such as the strength of a trend, whether a currency pair is overbought or oversold, etc. There are many different indicators. A trader only needs to follow those that are relevant to their particular trading system, but good forex trading courses will explain a wide range of indicators and how to use them.
4. Managing Forex Risk
Forex trading is a high risk investment strategy and surviving for the long term depends on managing risk very carefully. In order to maxmize profits, a trader must find the best balance between a risk that is too high, which will sooner or later break the bank during a bad run, and a risk that is so low that the profits are insignificant. Most traders work on a risk of between 1% and 5% per trade depending on the system used and how willing they are to risk their bank. Some professional traders with very large accounts would be even more cautious with a risk of around 0.5%.
5. Forex Trading Psychology
The mindset of a successful trader is probably the most important aspect to develop for the beginner. Without this it would be difficult to make money in forex, even with the best system in the world. The secret to success in forex is being able to maintain discipline and consistency under stress. This means keeping a cool head and not letting fear, excitement or other emotions influence trading. To some extent this will come with experience but there are also techniques that you can use to develop your trading mindset. Good forex courses will cover this and it is important not to skip this section.