The Importance Of Education In Trading – T4Trade Offers Webinars, Podcasts And Videos

The foreign exchange (forex) market offers some of the biggest wealth-generating opportunities in the financial markets, but it’s a place where it can be difficult to survive in the long run. 

The reasons for failure are numerous. Trading is a difficult profession with a notoriously high failure rate. Academic studies and government reports place the failure rate in trading anywhere between 97% in the Futures market and 70% in the Forex market. The statistics get worse as the study period increases, suggesting that most traders operate with a negative expectancy. 

Marketing gimmicks and fraudulent information have extenuated the industry’s already poignant survivorship bias, shedding light on the few traders who make it and presenting them to the public as if they’re the norm. Despite the formidable collection of evidence suggesting trading is difficult, some ambitious individuals are willing to put in the time and effort to become one of the “chosen” few who attain long-term success in the markets. 

There is no one path to success in Forex trading, but all successful traders seem to have two things in common: They’re life-long students of the markets, and they expend considerable time studying and applying their craft.

Forex Education: Risk Management And Developing An Edge

The first step commonly cited to success in the Forex market is education. 

Unfortunately, due to the ease with which information can be shared, quality Forex education is difficult to find in the sea of information. Additionally, while traditional brokers like Interactive Brokers Inc. IBKR and Toronto-Dominion Bank TD may provide an array of educational material, some traders may find that they’re still not sufficient for long-term success. 

In a rigorous educational curriculum for Forex trading, the concepts of risk management and developing a statistical edge rank highly. Ironically, these are two of the most overlooked aspects of trading for novice traders. Risk management is what preserves traders’ capital, and a statistical edge is what grows that capital.

Specifically, risk management is an umbrella term used to denote a range of risk thought processes and behavioral activities. On the most basic level, it includes standardizing the total amount of account value risked per trade, the maximum dollar loss per trade, and the maximum dollar loss per day, week and month. This is a preliminary list. Risk management can be expanded to include rules. For example, a good rule of thumb for beginning traders in Forex is to avoid weekend gaps. Another is to know when major economic reports will be released. 

Another important idea in trading is that the strategy traders use must have statistical significance. Academic studies suggest that markets are much more random than most traders suspect. When operating in a purely random environment, no edge can be created in the long run. Thus, Forex traders wishing to succeed in the long term must prove the statistical significance of their strategy through backtesting, paper trading, forward testing and real-money implementation. 

Most online brokers do not provide this kind of information and guidance for their traders, but a broker is here to help.

T4Trade Academy And Education

T4Trade, a leading contract for differences (CFD) and Forex broker, has created a rigorous academic curriculum for Forex traders worldwide.

The T4Trade Academy offers aspiring Forex traders video-on-demand, webinars and podcasts filled with Forex trading education. The Forex webinars are hosted by proprietary traders, market analysts and newcomers. They cover a range of topics, including Fibonacci retracements to basic market principles, and are hosted in languages like Arabic, English and Mandarin. 

The T4Trade video-on-demand section provides Forex traders with a daily 60-second update on the Forex markets and delves into many of the important concepts discussed above. Specifically, video topics range from an overview of the basic market structure in Forex to a deep dive into risk management, technical analysis and psychological training. 

T4Trade has looked to lay the groundwork for traders to learn before they venture into the risky world of training. In a blog post, the company provides a step-by-step guideline for aspiring Forex traders, guiding them on a path that could significantly shorten their learning curve. 

For more on Forex education and trading, visit T4Trade here. 

Featured Photo by Scott Graham on Unsplash

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