What makes a good forex trader?

What makes a good forex trader?

In order to answer the question what makes a good Forex trader? It is of the utmost importance to define what good means in this context. First of all, trading is not an easy occupation which is why a trader who reaches constant profitability is considered a role model. Once the outcomes have been defined it is interesting and practical to notice the many habits and desirable traits a good Forex trader possesses. By doing this, a systematic and effective improvement plan can be developed to reach these much sought after outputs. A list of the most important building blocks which lead to success in Forex trading will be listed next:

1. A devotion to practice.

Although most elements are important in the overall picture, this is by far the most important of them all. This devotion to practice involves persistence, discipline, desire and flexibility. Practice involves study of theory along with applying those teachings to practical projects. After a continuous period of time it can be said that practice makes perfect. When a professional devotes themselves to their craft it can also be said they strive for excellence; the results of this are usually high achievements.

2. The practice of structured organization in every professional endeavor.

Although practice might be considered as a cornerstone of success, it needs many supporting systems. The majority of exceptional Forex traders are not only good at their craft but they are also sharply organized. Besides being efficient in their management of time they also follow structured activities. As a side note they are also aware when they need to be flexible and perform different activities or taking some measured risks. By following these structured patterns that many consider as a sort of work ethic, many effective procedures are created to manage activities such as setting loss limits, managing risk and sticking to a successful trading business plan.

3. They are not attached to results.

Although this might seem like a paradoxical statement it is also true that exceptional professionals in Forex trading are able to keep a cool head in work situations. Many talented people have failed in this regard because when it comes not only to losing but winning they can’t think clearly in the heat of the moment. Cutting losses, being confident, getting rid of the dangers of ego and achieving consistency are just some of the benefits of having this attitude. Whenever quick decisions need to be taken, a person without emotional attachments will usually choose the most logical decision. And logical decisions filled with expertise usually lead to outstanding gains.

Although many things have been written to answer the question what makes a good Forex trader? It is important to notice and examine the source of all the achievements gained by the most excellent Forex traders. The most important attitudes and ways of acting have been mentioned here because they are comprised of critical elements required to reach the heights of trading. And as it was mentioned at the beginning, constant profitability is the mark of trading success.

Forex Terms & Words

Forex Terms & Words

Foreign Exchange Market or commonly known as Forex refers to any market wherein a currency is traded to the other. It has come to be known as one of the biggest market in the world today. To understand Forex and know precisely how to gain from it, one needs to know the relevant keyword and terminology Forex trader uses. Here is a listing of some of the most significant terms in the Forex Industry.

Pips -
Is known as the Performance Index Paper, it refers to the smallest measure of change that happens while trading. It is a standard unit in the Forex industry.

Leverage -
It is a financial tool that gives an individual the option to increase market exposure to a level that is above their actual investment.

Broker -
A Forex broker refers to an individual that provides currency traders access to the trading application, this is where traders buy and exchange currencies.

Stop-loss -
Called as the stop-loss order, an order given to a broker to sell security when it reaches a desirable price. It is designed to limit the loss of security of every investor.

Currency Pairs -
Any currency that has an exchange rate in the Forex market that is available for trading. The exchange rates serve as factors by which the main currency is multiplied to produce an equivalent value of the foreign exchange.

Commodity Pairs -
Refers to the three pairs mainly USD/CAD, USD/AUD, USD/NZD. These pairs are based in the actual changes in the commodity price, that is why traders that aims to gain exposure in the commodity fluctuations take advantage of the commodity pairs.

Bear Squeeze -
Is the changes that occur in the market condition that forces investors attempting to profit from price declines. The profit is then used to buy back the actual investment at a much higher price.



Circus Swap -
Refers ton the combination of an interest rate swap and currency swap wherein the fixed-rate loan is swapped with the floating-rate loan in another currency. It converts the basis of the liability of the interest rate and the liability of the currency rate.

Fixed-rate Loan -
Is the interest rate in the liability, such as payments and mortgages that is fixed for the entire time or only for a part of the term of the investor. It is attractive to new traders that who thinks that the interest will increase over the term of the loan, this increases their interest expense.

Asset Swap -
A swap wherein the fixed investment are mixed with the floating investment.

Adjustable Peg -
Is the exchange rate policy used by different countries wherein the national currency is being fixed with a different currency, but can be adjusted from time to time.

Carry Grid -
Is a foreign exchange rate strategy that is able to profit from a grid of currency positions. It gives the currency of is willing to pay a high interest rate.

These are only some of the essential Forex Terms that you can find. There are hundreds more that can heighten the knowledge of an individual that is interested in joining the Forex community.

Day Trading As A Living?

Day Trading As A Living? 

The words "day trading" tend be brought up in casual conversations these days as most people know someone who has tried it or know someone who knows someone that has. With the ease of accessing online brokers, day trading has begun to take off in recent years as both a hobby and a full time job. With that in mind, there are several considerations you need to keep in mind before you decide to begin day trading on any level.

First, you need to make sure that you understand the risks involved in day trading, especially on the Forex market. Day trading is not gambling. Day trading is not a get rich quick scheme. Day trading is hard work that requires the ability and time to learn a great deal of information and apply it in real time across a spectrum of continuously changing assets. The biggest tip you need to remember is to always have patience. Do not make a trade simply because you want to make money. Make the trade because its right.

Day trading is not for everyone. It requires the ability to handle the ups and downs of making successful and unsuccessful trades. The Forex market trades twenty-four hours a day throughout the workweek. That does not mean that you need to, or should, trade anywhere close to that many hours. Maybe you only have a few hours after your normal job to trade, that is absolutely fine. You just need to realize that no matter when you can trade, you should only trade when market conditions are right for your trading strategy. This brings up another key point, always trade using some sort of strategy. You can trade off of technical analysis based on the chart of the asset you are trading or you can look to fundamental analysis such as how recent announcements from the Federal Reserve will impact the value of the US Dollar. Or you may wish to invoke a combination strategy. Either way, develop (or learn) a strategy and stick to it. Every time you make a trade, do so for a reason, not just on a whim.

Consistency in day trading is the hardest thing to accomplish. Any trader can get lucky or un-lucky. Those that survive and make a full career out of day trading make serious amounts of money each day and do so because they consistently trade correctly. Correctly does not mean that they always win. Correctly means that they know when to cut their losses when a trade is going bad and when to lock in profits and not expect more than is necessary when things go well. Set a goal for each trade and stick to it. Do not expect to make an outrageous percentage gain on any one trade. Be realistic. Set goals. Stick to them.

Also realize that no successful trader became successful over night. It is only through hard work and dedication to learning about what influences the markets, different trading strategies, and the best times to trade that a trader becomes successful. Research as much as you can about the Forex market. Read as many different books as you can. Stay away from robot trading programs - they simply do not work. Learn how to trade and why to make a trade. And most of all, have fun.

All trading can be a risk!

Currency trading as a living

Currency trading as a living

This is also called trading foreign exchange or forex trading. Many people start it as hobby and in the long run it turns out to be a great source of investment income. Forex trading involves trading with different currencies. The trader need to be more speculative so that at no one point he loses. One sells one currency to purchase another. The base currency is the currency that the trader is spending on while the quote currency is the currency that the trader is purchasing. The exchange rate enables the trader to know the long and the short position. At the same time, the ask price and the bid price helps the trader to know the spread. All you need is an account and cash to invest.

There are several factors to consider, economic factors of the country you are trading, position of the country and the politics of that particular country. It is also important to know how to check changes in value of two currencies using the pip measures. This helps to know if your account is increasing or decreasing in value.

Another factor is that, one has to be careful on the brokerage market to trade on. This is by involving some other people who have been in the market for at least nine years. This increases the brokers honesty and transparency. Most important is that if a broker offers commodities and securities it is obvious that they have a wider business and client base. This is based on the number of commodities offered by the broker.

Also, one need to be careful on the reviews posted on different sites because some may not be true. They may be posted just to boost their reputation. Therefore, a lot of concern must be raised to these reviews. At the same time, the links and the sites should look professional and be active through out.

Basic things like the customer support, accountability, transparency and easy transactions must be clearly analyzed. For example, look at the transaction cost for each trade.

One may choose to open a personal account or a managed account. A managed account allows some one to execute trade on their behalf. The broker applies for the account online or fills a PDF document. The cost of transferring cash from the bank account to the brokerage account should be minimal because this fees cuts down on profits. Intermediaries like Pay pals and wire transfers may be preferred because they charge low fees.

Finally when one starts to trade, analysis of the market must be done. These are the sentiment analysis, fundamental analysis and technical analysis. They determine your margin, the place to order and also a careful analysis of profits.

Conclusion

Forex trading is one of the risky investment areas but it has a highest return on investment. It is important that one must be aware of the pit falls that leads one be unsuccessful by consulting a trusted money manager. It is also important that one makes investment in a demo account. If one is successful in a demo account then, you can proceed into a real account.

All trading can be a risk!