How to be a professional forex trader

How to be a professional forex trader.

Orchestrating your foreign exchange success is by no means an easy feat. It requires an amalgamation of numerous skills and in-depth forex knowledge to strike gold. The reality of it all is that when you enter in forex-dom, you are playing with the mavens from the first day itself. The margin of error here is minimum, even if you decide to opt for a mini or micro lot trading. So you may ask how to be a professional forex trader ?

The article will explain how to be a trading ace in this market. Follow closely.

How to be a professional forex trader - Secrets revealed.

Passion and drive to succeed:

Henry Ford quoted: “ Whether you think you can, or you think you cannot, you are right .” He explains if one can and the other cannot, it is not because of their difference in ability but because of their mindset. Ability comes second but firstly they should have the belief, the passion and drive to succeed in forex mentally.

This characteristic is the very essence of currency trading. Experts state that without these traits, greed, fear and hopelessness creeps into the mind. Determination and strength of your belief will help you stay on course even when the currency exchange market does not respond the way you had predicted it to.

Understand the nitty-gritty of forex trading:

The next step to be a professional forex trader is becoming familiar with the rudiments of currency trading. Many ignore this important aspect and hence face huge losses in their trades.

You should cater to a solid forex education course and understand what it is, why it exists and ways to make sense of it. There are also numerous online tutoring videos which you can follow and also for references you will also find numerous articles, online for your aid.

Being familiar with forex trading systems:

You should get accustomed with candlestick patterns, Bollinger bands and every technical aspect employed for forex market analysis. Along with this, you should also learn about 50 days Moving Average, Support and Resistant and Fibonacci oscillator.

Plus you need to possess a proper knowledge about the various currency pairs and their shifts resulting due to various news releases, or socio-politico-economic occurrences.

Learning proper trading strategies:

After you have learned about all these aspects, the next step concerning how to be a professional forex trader is learning about some effective trading stratagems.

Though you will find numerous approaches to forex trading, experts suggest the use of Price Action approaches for reading the natural price of dynamics of the market. With the knowledge of Price Action strategies, you will be able to learn ways to read charts forming at key chart levels.

There are websites which offer courses as well as membership communities which you can make use of to learn all about Price Action.

Perfecting your skills with demo trading:

Now that you are well versed with forex knowledge, it’s trading methodologies and mechanisms; it’s time to roll the dice and see how well you can actually make use of those skills. Start with a demo account. This is the next step concerning how to be a pro forex trader!

Demo accounts give you virtual cash which you can use to trade, and it also gives an idea about specified market conditions enabling you to ease into the scheme of things. The knowledge attainable will be akin and irreplaceable and will actually boost up your moral when you engage in real trading.

You have mastered how to stop loss and aim orders; you are aware of trading systems, and you have also identified your suitable trading strategy. Plus you also have a fair idea about forex-dom. So all that’s left for you asking how to be a professional forex trader is to go live.

Experts recommend keeping realistic expectations and also starting small, only to build on it as you progress. Hopefully, this segment regarding how to be a professional forex trader is clear to you. Here’s wishing you have a wheel of time with your forex trades.

The content of this article reflects the author’s opinion and does not necessarily reflect the official position of LiteForex. The material published on this page is provided for informational purposes only and should not be considered as the provision of investment advice for the purposes of Directive 2004/39/EC.

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How to Become a Forex Trader.

Steps to Become a Forex Trader.

Anyone with a little money and patience can become a Forex trader. However, the skill and patience required to become a successful or profitable trader requires limiting losses while identifying good trade set ups with a positive risk: reward set up. Despite the ease of getting into the business, there are a few steps you should follow. A hasty entrance into Forex trading can lead to the poor house very quickly.

Forex traders do not need to have a lot of capital to trade due to being able to trade on margin. The average Forex broker requires at least $300 to open an account and start trading. A good rule of thumb is to have at least $1000 to open a mini account, preferably $2000.

This number might sound a little high for beginners, but this will allow you to trade with a bit of a buffer in case of losses. You're not looking to risk the entire amount but rather just have a higher cushion so that you're not forced out of a trade, which can happen with smaller balances. More.

Continue to 2 of 5 below.

A forex trading demo account is an a trading account with monopoly money in it that is connected to the live market. Trades can be placed in real time and represent what would be true losses and gains if the money were real.

Before you put 1 penny on the line with trading, you'll need some practice. A demo account will give you the ability to practice trading without the pressure. More.

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Aside from practicing, you may want to seek some trading advice from a forex trainer or forex books. As a trader you will need to develop your own style and trading ideas, but in the beginning, it can be helpful to have some professional direction and recommendations. Forex is very daunting in the early days and some guidance can really help. More.

Before you actually commit to live trading and money on the line, you should be able to profitably trade on your demo account or with paper trading. Your track record should be more than a few weeks, at least 3 months, preferably 6 months.

It will be difficult to refrain from trading after you make those first few profitable trades, but experience really counts in forex trading. It's something that you cannot work around, you have to get it the old fashioned way, hard work. More.

Continue to 5 of 5 below.

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After practicing for several months, doing a little training, and getting some forex education and becoming consistently profitable, it's time to start making live trades. You may find that it's a little different to have actual money on the line, but if you stick to the same practices you used to be profitable while trading the demo account, you will be successful. More.

6 Things That Separate The Pro From The Amateur Trader That You Can Change Right Now.

Contents in this article.

A professional trader is not the one who was more trading screens, better equipment or the better indicators. A professional trader is defined by how he approaches his trading mentally and how he evaluates his trading routine. Therefore, every amateur trader can easily acquire the mindset of a professional trader by following a few principles and changing his approach. The following article walks you through the 6 most common trading principles that make the biggest difference between an amateur and a professional trader.

#1 Distractions and focus.

Amateur: Watches YouTube videos, is online at Facebook, chats in Skype or watches TV while trading. The amateur loses focus easily and does multiple things when there is no setup in sight or markets are currently slow. He, therefore, misses trades easily, makes mistakes when calculating his position and when executing trades.

Pro: When the professional trader is trading, he is 100% focused and does nothing else besides watching his charts. He might have a website open to monitor news releases or watch the news ticker on a TV channel (on mute!), but that’s it. The pro knows how important it is to be 100% focused and when there is nothing to do and no trading setup in sight, he turns off his platform, works on his trading skills or just takes the day off.

#2 Wasting screen-time.

Amateur: Amateur traders tend to watch charts for hours at a time and randomly flip through timeframes on the hunt for a trade. The myth that screen-time will help a trader become better is still accepted among amateur traders. Watching charts for the sake of it has no value whatsoever if you don’t know what you are looking for.

Pro: The professional trader has a detailed trading plan and knows exactly what he is looking for and when he is going to trade. He does not flip through timeframes, but just waits patiently until the trade comes to him. He does not waste his time by sitting in front of his charts all day long when there is nothing to do. When there is nothing to do, the professional goes back to his trading journal and reviews his past performance to find ways to become better.

#3 Overconfidence after a winning streak.

Amateur: The amateur trader believes that after a few winning trades in a row he has acquired superior skills or that his trading strategy is suddenly a money machine and cannot fail anymore. The problem is that after a few winning trades, amateur traders use too much risk and take trades that are too big or violate their trading rules because they ‘can feel’ what will happen next.

It’s not uncommon that after 4 or 5 winning trades, traders lose all their profits on only one trade. Are you guilty of that too?

Pro: The professional trader knows that he is not suddenly a super trader and cannot predict what is going to happen next. A winning streak is normal and will happen time after time; it is just how trading works. A professional trader ALWAYS sticks to his plan, always follows his risk and money management rules and NEVER lets one losing trade wipe out a significant amount of his capital.

#4 Loss of confidence after a losing streak.

Amateur: When having a losing streak, the amateur trader loses confidence in his skills and his trading strategy. An amateur trader tends to change his trading strategy when he enters a losing streak or breaks his trading rules because he wants to make up for his losses.

Losing streaks are dangerous for amateur traders because they often lead to even bigger losses when traders try to make up for lost money.

Pro: For the professional trader, winning and losing streaks don’t matter. They are inevitable and will happen over and over again. A professional trader knows that over the long term, his trading strategy will make him money, no matter what. A professional trader sticks to his rules and never loses his mind.

#5 Taking losses personally.

Amateur: It is hard to accept that your trade idea was wrong and that you are going to lose money. Especially new and inexperienced traders can’t accept to be wrong and when they see that price is about to hit their stop loss order, they will do one of the following things:

– Setting a stop loss further away to delay the loss.

– Adding to a losing position to get out of the loss faster when price turns around.

– Taking off the stop loss order completely because eventually, the price will have to turn around.

All these tactics will lead to large losses and to margin calls. A trader who is engaging in one of the three mentioned scenarios is as far away from becoming a professional trader as possible.

Pro: The professional trader lives by the following two principles:

– One trade is just one trade and the outcome of one single trade does not matter.

– The stop loss order is the price where you fully accept that your trade idea was wrong and where you WANT to exit the market.

The professional trader knows that the outcome of one trade is totally irrelevant to his trading career. Whether a single trade is a winner or a loser does not matter because there will be 400, 500 or 800 trades coming soon where he can make money. A professional trader also accepts that a stop loss is the place where his trade is wrong and that he is happy to exit the trade because it is not going to make him money.

#6 Do you need money fast?

Amateur: What is your trading objective? Do you believe that trading is a way to make a lot of money in a short period of time? Research showed that traders who believe that they can get rich quick with trading lose the most amount of money.

Pro: For the professional trader, trading is a regular job. The professional trader does not trade for the excitement or because he wants to make a fortune with a few lucky trades. Trading is not an easy profession and it requires time, hard work and a lot of hustling before you can make money. In the end, being a trader is a job like many other jobs.

Conclusion: Fake it until you make it.

To become a professional trader, act like one. Behaving like a professional trader does not require a lot of capital or expensive equipment. You can trade like a professional trader RIGHT now. Analyze your trading behavior and then see how you can make the adjustments to take your trading to the next level.

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6 comments.

Wow, great points and I think you nailed the amateurs right on the head LOL. They could learn a lot from your blog! Good luck in the future!

thanks for the advice i truely thank this trading advice it truely helps in trading more than one can expect but not so sure with the stop loss orders because many traders tent to get off a trade earlier knowing later on that it was a winning trade well i lost greatly but it works one of those good days.

Main difference is money management.

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A Day In The Life of A Professional Forex Trader.

Professional status as a forex trader takes years of commitment, backed up by clearly-defined strategies that show consistent profitability. But the rewards are worth the considerable effort, with high income and a lifestyle that most folks can only dream about. Opportunities abound for these full-time players, who can choose to work for international banks, hedge funds or just put on their pajamas and trade out of a family home-office. (See related: How to Become a Successful Forex Trader).

Let’s look at a typical day in the life of a professional forex trader who manages private accounts that may include family funds and a share of other people’s money. These overachievers define the lofty goal for millions of at-home players who want to earn their livings by trading currencies, but without the restrictions of a more traditional forex workspace like an international desk.

In addition to goal setting, this over-the-shoulder view serves as a reality check, allowing at-home forex traders to examine current progress in creating their dream jobs within the worldwide flow of currency exchanges. It focuses on three areas of interest:

Workflows that traders can use for morning preparation and end-of-day examination. Attitudes and strategies during the trading day that can impact performance. The personal side, including lifestyle choices that assist or undermine profitability.

Defining Market Hours.

The professional forex trader specializes due to the currency market’s enormous complexity. This is a biological as well as logistical imperative because forex trades 24-hours a day, from Sunday evening to Friday afternoon in US time zones. This around-the-clock action makes it impossible to watch continuously in real time, encouraging a razor-like focus on specific time frames and forex pairs.

Most US professionals start with EUR/USD and USD/JPY, adding other pairs that fit into time frames dictated by these popular instruments. This often includes other euro and yen crosses as well as Australian and Canadian dollar crosses. They choose wisely, often swapping out closely-watched pairs over time, understanding that tracking too many markets will dilute the reliability of their strategies.

Euro price action picks up between 1 am and 3 am on the U. S. East Coast, encouraging local pros to get up earlier than equity or futures traders. This timing takes many of these folks out of the game after the New York lunch hour, triggering a noticeable drop in forex volume and volatility during U. S. afternoons. This lifestyle works perfectly in conjunction with timing of key economic reports in Europe and the United States but fails to capture Asian developments, which can move world currency markets for months at a time.

This leaves two other specialization choices:

Match market hours with other U. S. traders, aligning activities with the New York stock markets and Chicago futures exchanges. Bend the sleep cycles further, awakening for the Asian session and completing the market days early after the U. S. sunrise.

In all specialties, professionals focus their efforts on currency pairs that provide the most profit potential for their strategies. This inevitably changes over time, forcing them to adjust market and sleep hours to manage profitability.

Trading Day.

Trading screens are turned on soon after waking because currency markets are open and prices have been driven higher or lower during sleep hours. However, stress levels are low because well-trusted brokers are holding their capital while carefully placed stops are guarding against outliers, like China’s devaluation of the yuan in August 2015. In addition, they always review exposure at the end of the market day, to ensure that losses taken during the sleep cycle fall within the confines of their risk tolerance.

Forex professionals hold a deep interest in economic and central bank policies around the world, understanding how the Federal Reserve (FOMC), European Central Bank (ECB), Bank of Japan (BOJ) and Peoples Bank Of China (PBOC) impact currencies. They keep a detailed calendar of economic releases and central bank meetings that will impact their strategies, often foregoing sleep when a key meeting is set outside of their normal market viewing hours.

They examine the latest economic releases while having their first cup of coffee, adjusting stops and exiting positions if needed. Time frame now comes into play because many professionals hold a large core of smaller-sized positions for longer holding periods. This allows them to keep stops loose and away from predatory algorithms, which dominate modern markets. These efficient robot-traders predict price zones where retail stops are clustered and hit those levels during less active trading hours or in response to economic releases.

Market day activity depends on the current strategies. Pros who manage a core of longer-term positions may be surprisingly inactive in a typical session, waiting for key price zones to come into play. It’s a different story for day trading strategies that demand fast and furious participation. Even so, these positions cluster around the hours of major economic and central bank releases, with the balance of the session set to observation rather than action mode. (See related: Anticipation vs. Confirmation for Today's Forex Trader.)

Professionals choose specific times to end their market days rather than letting circumstances and price action make those determinations. A 24-hour environment changes continuously and there’s no good time to walk away, but humans require other activities to maintain balance. The New York lunch hour offers the most popular choice for local professionals because it also marks the close of trading on the European stock exchanges.

The trading day ends with a performance and session review, noting characteristics that may impact future strategies and outcomes. Pros also take note of economic releases scheduled for their off hours, adjusting stops to account for the greater risk. Finally, they take a last look at forex pairs not closely watched that day, checking for trading opportunities they may have missed.

Lifestyle Choices.

The 24-hour forex grind can be tedious and proper lifestyle choices are needed to build discipline and focus, in turn improving the bottom line. As a result, the forex pro takes as much time working on relaxation and personal health issues as watching world markets. These folks also know how to have fun, taking regular time to get away from their trading screens and unwinding with friends and family.

Many pros take physical and mental conditioning even further, quitting smoking, limiting alcohol use and maintaining a healthy diet that keeps weight under control and the mind in an alert state. They also understand that problems with interpersonal relationships can translate immediately into performance shortfalls, so adequate time is taken to deal with spouses, parents and children.

The Bottom Line.

Professional forex traders become lifetime students of worldwide economic and central bank policy, understanding that currency trends can turn on a dime when central banks shift direction, as they have many times since the 2008 economic collapse. They live an affluent lifestyle but pay the price with many hours of research and market watching. Sleep deprivation is common for these individuals until they build the trust required to allow their trading strategies and risk management to work without constant monitoring.