Phantom Trading’s 4-Part Beginner’s Guide To Forex Trading

Part 1: A Basic Introduction To The Forex Market

Part 2: The Different Forex Pairs And Markets

Part 3: How To Get Started Trading The FX Market

Part 4: The Journey To Becoming A Forex Trader

Understanding The Journey To Becoming A Forex Trader

Start Small and Scale-Up

When starting out as a forex trader, it’s important to start small and slowly scale up as you grow your confidence. While the definition of starting with a small amount of capital is relative to each individual trader, it’s important to follow this rule so that you’re not overexposed to the market from the get-go when starting out. What we suggest to new traders at Phantom Trading is to either start in Demo if you’re completely new to trading, or to start with a very small live account that you can afford to lose entirely. 

For those who have one or more years of experience, we suggest opening a live account or using a live account if you have one already and funding it to a point where you can risk 0.5%-1.0% of the total account equity pushes you just enough outside of your comfort zone for it to hurt a bit on a loss. The reason we suggest doing this is so that you can start getting used to having your money and emotions involved early on, almost as a form of exposure therapy. To give an example, if you feel that risking $50 per trade will push you outside of your comfort zone, open a $5,000 account and risk 1.0% of your total account equity per trade in order to put $50 on the line for every trade you take.

Don’t Expect To Get Rich Overnight

Next, we need to focus on setting realistic expectations. Trading is not a get-rich-quick scheme. Despite the fact that many have created huge amounts of wealth with the recent cryptocurrency boom over the last decade, that is not trading the way we know and teach it. We do not take our life savings and risk it on a single position like the people of /r/wallstreetbets on reddit. Just like anything else in life, there are no shortcuts to real success. There is only pure luck and good old-fashioned hard work. When you make the decision to become a trader, you’re potentially signing onto a 1 to 2, 3, or even 5+ year journey to making things work, and as I’ll cover later in this article, not everyone will make it. Again, we don’t want to dissuade anyone from learning how to trade, but please don’t come into this thinking you’ll be making millions in profits and retiring on a yacht in the next 30 days.

Expect To Lose Frequently When Starting Out

That’s right, expect to lose almost as often as you win, if not more often! Even when trading retail strategies, a strike rate (or win-to-loss ratio) of 50% or higher is considered masterful in the world of trading. This is why we also look to enter trade setups that, in the event of a win, will provide us profits that are many multiples of what we’re risking on the trade. If you’re new to trading, just like I was one day, you may have this preconceived notion that it’s possible to win every single trade you ever take. It’s statistically next to impossible for that to happen. Expect to lose, expect to celebrate your valid losses (and winners), and work on your trading psychology when you catch yourself taking invalid trade setups, regardless of the trade’s outcome.

Long-Term Success Depends On How You Handle Failure

What I’m about to mention here may not be the case for everyone. I’m sure there are people out there that found their journey to becoming a consistently profitable trader a breeze relative to what I experienced. Again, it’s not my intent to discourage you or anyone from getting into professional trading. It’s ultimately one of the most relaxed and fun jobs in the world once you find and maintain your consistency, but for some people, including myself, it can cause them to feel incompetent mixed with a debilitating sense of anguish and distress at times.

Are you overly critical of yourself at work or in your day-to-day life? If yes, you’ll need to drop that habit.

Do you find that you have an addictive personality or have impulsive traits? You’ll need to learn self-control and discipline.

Are you an impatient person who gets bored easily or can’t stay off their phone? Again, another thing you’ll need to train yourself to stop doing.

The list goes on and on and on. These are all barriers to your success that will not only impede your ability to learn and master the art of trading consistently but will also destroy you if you don’t know how to handle failure.

Notice, I’ve never once said that failing is a bad thing. As cliché as it may sound, failing is how we learn. I’d argue it’s our best learning tool. Learning to fail and learning to lose properly is hands down the biggest roadblock that most traders will face, and conversely the most useful and powerful skill you’ll pick up as a trader. Like a boxer, even if you have the hardest hitting right-hook, your ability to punch is utterly useless if you can’t take a punch to the face. You will lose. It’s an absolute certainty in trading. Learning to deal with those losses and making mistakes like failing to follow your plan, hesitating out of fear, or overtrading out of overconfidence are all normal parts of learning to trade!

“What matters most is how you pick apart your failures as a trader and use them as lessons to aid your growth.” – Robert Castillo

Expect To Get The Most Frustrated You’ve Ever Been

No exaggeration when I say this, trading can really suck sometimes. Expect big highs from winning your first few trades and soul crushing lows unlike anything you’ve ever experienced as you lose all of your winnings whilst going into deep drawdown, then expect to get another taste of consistency while also detaching from the outcome of each trade emotionally for a little while. Once you’ve gone through that, expect to perhaps lose your consistency with another big losing streak. Now, repeat this cycle over and over again until you iron out the holes and inconsistencies in your trading plan, execution, analysis, and trading psychology that are causing you to repeat the same mistakes over and over. If that doesn’t sound frustrating, you’ve probably got a lot of patience, but for your average person, it’s usually enough to make them want to pull their hair out or make them contemplate quitting for good… multiple times.

You May or May Not Get Support From Friends & Family

Like any entrepreneurial venture, you may or may not get support from your friends and family. This one is tough. If you do get support from them, count your blessings – because that’s one one less thing to worry about and it ups your chances of success. If you don’t have support from them, don’t worry. The best way to handle this is to agree to disagree and try your absolute best not to let it affect your psyche when trading. The unfortunate challenge of having someone in your life who is unsupportive and whose opinion you value is that it may contribute to unneeded stress and can even tilt you when trading. Another tip for those of you who have an unsupportive spouse or partner – keep your job and learn to trade on the side. I’ll go deeper into this in the next section. 9 times out of 10 you should keep their job or primary source of income when learning to trade anyways!

Understand That Not Everyone Will Make It

This is just a fact of life. Not everyone can be an astronaut, astrophysicist, fortune 500 CEO, or famous actor. There is such a thing as survivorship bias. Trading as a profession is unforgiving and can destroy your life on multiple levels if you’re not careful. Not only is it possible to develop a serious gambling addiction (if your risk management sucks), but it’s also possible to invest over 10 years of your life into trading and still have absolutely nothing to show for it. Trading is a business, and we all know that statistically, most businesses fail. This profession is just not for everyone.

Now, I’m not writing this to discourage you from getting into trading in any capacity, but I do write this as a word of caution and disclaimer for those thinking this will be a cakewalk to becoming a multi-millionaire trader all while quitting their job (and losing their primary source of income) within the first 3 months of opening a trading account.

There is a smart way to get into trading, and it starts with planning and preparation FIRST. Forget everything you ever heard about “burning the boats”. This type of hyperbole undoubtedly hurts more people than it helps. Yes, you should push yourself and take it seriously, but by no means should you quit your job and sell all your possessions to cover your living expenses while trying to learn how to trade.What most trading communities won’t tell you is that trading is hard… really hard. If you want a fighting chance at this, give yourself time to learn and gain experience through actually trading in the markets through simulation, demo, and live. Just watching a course on trading alone is not going to give you the domain knowledge and hands on experience you need to become a consistently profitable trader Much like learning to ride a bike, you have to do it. Reading 10 books on how to ride a bike just won’t cut it.

Finding A Profitable FX Trading Strategy

Another thing that most educators in this industry won’t tell you is that pretty much any strategy can work. Sure, some strategies are better than others, but again there are arguably hundreds, if not thousands of ways to trade profitably. Whether you want to try to trade a retail strategy or trade using indicator(s) or an Expert Advisor (trading bot), there are always going to be ways to make it work. This of course is assuming that you execute the strategy without deviating and have proper risk management as well as proper trade psychology. At Phantom, we teach traders new and old how to trade supply and demand in the currency markets by analyzing pure price action on multiple timeframes. It’s not a simple strategy, but it’s also not overly complicated. 

The Phantom Trading methodology was developed by our founders Wyse, and Kev, as well as BLACKWATCH in the discord community, and while we don’t claim to be a completely original strategy (supply and demand trading has been around since the dawn of candlestick charts), we’ve developed our own concepts and refined them over the years, plus we actively trade the strategy profitably on live personal accounts, private funded and prop-firm funded accounts.

Building Consistency In The FX Markets

To conclude this article let’s talk a bit about finding consistency in the forex markets. Like any career or profession, mastering a series of skills takes time and effort. No one at Phantom Trading claims that becoming a profitable forex trader is easy. If it were so easy, everyone would be a millionaire from trading. As I previously mentioned, there are those that find their consistency after a non-specific period of time (remember everyone learns at different paces), and there are those that may never find their consistency and profitability in the market. Again, our job is to give you all of the knowledge, tools and processes we used to find our consistency to give you the best fighting chance of becoming a profitable, professional FX trader.

Our goal at Phantom Trading is to give you everything you need, so that if you’re serious about making a living trading currencies and putting the time in to make it work, you can create your own success! That pretty well concludes our in-depth rundown on what FX is! If you’ve made it this far, congrats on going through this beefy article and thank you so much for reading! 

Happy Trading!


Looking To Learn Market Structure & Get Consistently Profitable In The Forex Market?

Click here to join Phantom Trading and get exclusive access to our global trading community filled with like minded traders, plus learn from our team of funded traders with a combined 50+ years of trading experience featuring the founders Wyse & Warner who have institutional experience and experience with trading private capital, plus our team members who have over $1.5 million in funding through prop-firms combined!

Robert Castillo
FX Trader & Analyst
Writer & Editor

Rob is a funded trader from Toronto, Canada, and has been trading currencies, commodities, stocks, and cryptocurrencies for over 7 years. Outside of trading, he enjoys making music, boxing, and riding motorcycles