There's more than one way to learn to trade Forex.
I've received many emails over the years that basically ask:
What's the best way to learn to trade the markets?
There isn't one best way.
But there are methods that are better than others.
In this post, I'll go over the 9 top ways that people learn to trade Forex…and the benefits and downsides of each.
If you are just getting started in Forex, this list will give you a better idea of where to focus your energies.
1. Signal Services
There are two types of signal services:
- They just give you signals and don't tell you why they are recommending the trades
- They teach you the trading method and support you by alerting you to the trades that are setting up
Obviously, #2 is the better choice.
If you don't know why they are suggesting the trades, how will you ever learn the strategy for yourself? In order to become a self-sufficient trader, you need to learn how to trade, not just take someone else's signals.
Here are the pros and cons of type #2 signal services:
Pros
- Easier to follow suggestions
- Gives you real-time examples of trades
Cons
- You may miss entries and exits if you aren't watching the signals, or they are delayed
- May not tell you to backtest, so you are only getting forward testing results…which can make the learning process a little slower
- Can create a dependency on the signals
2. Real-Time Chat Rooms
A good real-time chat room education service is really hard to find.
The reason is that it takes a lot of time moderate a chat room and full-time traders usually don't have the time to focus on trading and chatting at the same time.
But if you can find a good chat room, it can be worth its weight in gold.
The reason is that you can get real-time feedback and alerts from the trader(s)…and that's the best way to learn. In addition, you can learn from other knowledgeable traders in the group.
It's basically real-time mentoring…at a fraction of the price.
Pros
- Ask questions about setups, as they happen
- Get alerts to possible trade setups
- Learn variations of the strategies from other traders
- Learn while trading
- Get feedback on your results
Cons
- If the conversations aren't moderated, they can turn into a stream of meme gifs and conversations about what people did over the weekend. That's really annoying. Make sure that the room only allows posts about setups, or they have a separate room for random chats.
- The monthly cost can be high
- The trading strategies being taught may not work for you
- Hard to find a high-quality chat room that teaches a style of trading that you want to learn
3. Forums
Here's the big thing about forums…
You never know who is behind the posts. They could be legit, or just making shit up.
Most traders will start learning from forums, but quickly move to other education methods because forums tend to be a mess.
That said, they can be a useful resource for finding tips and ideas.
Pros
- Usually free
- A great place to find free indicators and tips on how to use trading software
- There can be legit traders there, but they are rare
- Since there are so many posts, it can be a good place to get trading ideas
- I've spoken to a couple of traders who have gone full-time after learning strictly from a forum, but again, it's rare
Cons
- Conversations have a tendency to devolve into third grade name calling (that system can't work, you're an idiot)
- Can be hard to sort through all of the threads
- You will get a lot of opposing opinions, which can confuse a beginning trader
4. Webinars / Live Events
This type of education is great for learning a new strategy or a specific tip.
While this may not be a long term solution to learning to trade, it can be a great way to pick up some valuable ideas and have some fun in the process.
Pros
- Short, focused format
- Usually don't take up too much time
- Can sometimes chat with other traders, which makes trading less lonely
Cons
- You may not be able to get long-term support
- It can be easy to miss things if you don't take good notes or have access to a recording or transcription
- Might not give you the big picture
5. Books
I love books. You can learn things in a few days, that would otherwise take you years.
I've gone mostly digital, but there are a few books that I still keep around because they aren't available digitally, or I just like having the physical format.
To see my list of favorite trading books, go here.
Pros
- You can keep them around for reference
- You don't have to worry about your hard drive crashing
- Sometimes the only source to learn from a particular trader or expert
- They can be relatively cheap, when purchased used
- Usually best for learning trading strategies and trading psychology
Cons
- If the trader is not good at explaining things, it can be difficult to understand the concepts
- You may not be able to ask additional questions
- Some concepts are difficult to teach in a book
6. Blogs / Social Media
The right blogs and social media feeds can give your education a huge boost.
Of course, I could be a little biased.
But I've personally learned so much from blogs, Twitter and YouTube that I think that you should at least give them a try. Just limit your intake, or you will spend all day on them.
You can follow Trading Heroes on YouTube, Instagram and Twitter.
Pros
- Great resources for individual tips and trading strategies
- Get insights from the writer/trader, that may not be available anywhere else
- Video posts can give you easy to follow tutorials
- Get inspiration when you are discouraged
- Usually free
Cons
- A lot of the best trading blogs start out as hobbies and remain hobbies. Therefore, they tend to go away when the writers realize how much work (and little pay) is involved
- There can be years of posts, making it hard to access the specific information you need
7. Online Courses
Online courses are one of the most popular ways of learning to trade because they can be affordable and you can learn at your own pace.
You can see a list of our recommended courses here.
Pros
- Learn at your own pace
- Usually affordable
- Can interact with people in the course
- Easy to access and reference the material
Cons
- May not get long-term support with your trading
- The educator may not be good at explaining things
- Courses tend to focus on the trading strategy and not trading psychology (which is more important)
8. Private Mentoring
If you can afford private mentoring, this is usually the best way to go. That said, there can still be some drawbacks.
The best way to find a good mentor is to ask successful traders who they trained with and their results.
Pros
- Frequent feedback and course correction
- Get tips that the trader may not teach publicly
- Learn while doing
Cons
- Usually very expensive
- The trading strategy may not fit your personality
- The person may be a great trader, but a lousy teacher
- May be hard to find reviews on the educator
9. Trading Robots
Note: This is only for trading robots without any educational material. I believe that there's nothing wrong with an education program that teaches you a method, then gives you a robot to help manage or spot trades.
Yes, I agree with you.
A trading robot cannot teach you trading.
Except maybe this robot…
Just joking.
However, some people still insist that this is a trading education method. They think that they will be able to somehow “reverse engineer” how a robot trades.
While this is certainly possible, it's highly unlikely.
Pros
- I don't know of any
Cons
- If you don't understand how the strategy works going in, how do you know if it's a good match to your Trading Personality?
- How do you know that the trading strategy actually works over the long-run?
- Reverse engineering a trading system requires a lot of time and trades to figure out the strategy. Even if you have a lot of trades to look at, you may not be able to figure out all of the rules of a strategy.
- Most commercial trading robots don't work, they are optimized for a certain period of time
Conclusion
Learning to trade is not easy, but it's very rewarding when you finally figure it out. I hope that this post has taught you the value of learning from different resources because they each have their own strengths and weaknesses.
The bottom line is that you should try a few different things and find what works best for you.
What has been the best education method for you? Let us know in the comments below…