The Foreign Exchange Market otherwise known as, Forex, FX, and currency market is a global decentralized market for the trading of currencies. Some of the major players in this market are large international banks. These global financial centres serve as the anchors of trading amongst a wide range of buyers and sellers. The Foreign Exchange Market sets the determinative value of the varying currencies and the trading runs around the clock, except for the weekends. (Source: Wikipedia) Many Forex traders have become successful and operate in this field as entrepreneurial career professionals. This article will share information on how to develop a career in Forex.
Information on Forex Trading
Forex offers new users the opportunity to open a practice trading account where they will be given $50,000 in virtual money in order to learn the online system. Users will see real-time streaming quotes as well as have access to use the tools and trading platform through the virtual training program. Forex also offers new users the chance to download their free eBook, Currency Trading for Dummies which offers expert advice on trading in the Foreign Exchange Market.
Steps to Develop a Career in Forex
Nial Fuller is a professional trader and author of the book, Price Action Trading. He maintains a monthly readership of over 250,000 traders and has been teaching in this field since 2008. According to Mr. Fuller, one of the biggest mistakes that many Forex traders make is that they dont treat their Forex trading like a business. For example, they may see it as a fun past-time or trip to the casino. However, when it is not viewed as a viable career or entrepreneurial activity, time and money are both wasted. In order to develop and succeed in a career with Forex trading, you must see it as a serious business or career opportunity. On Mr. Fullers website, LearnToTradeTheMarket.com, there are valuable insights into the best ways to develop your career in Forex trading. Some of those steps will be discussed in this article.
1. Understand the Costs Involved
All business opportunities involve costs, so when developing a career in the Forex trading industry, dont expect anything different. Basically, the goal of a trader is to generate increased revenue through winning trades than the costs involved. That is when a trader makes a profit and is on the road to having a viable trading career. However, Mr. Fuller advised that if you let your costs (mainly losing trades) get out of control, you will lose money and your Forex business will go under (youll blow out your trading account). When entering this business, it is important to understand that every trader will lose money at some point in time. The following is a listing of the major costs involved in maintaining a viable Forex trading business.
- Losing trades
- Broker commissions
- Computer hardware and software
- General office equipment
2. Profiting with your Trading Business
You should definitely be well informed about cultivating a viable trading strategy. You can learn more about creating the best strategy by checking out Mr. Fullers Price Action Forex Trading Course. He has detailed a short basic outline for putting together the best strategy for a profitable trading business and those tips are discussed below.
- Your winning trades need to offset more than your trading costs. If that is not happening, you wont be creating a profitable trading career.
- Maintain a higher percentage level of winning trades compared to your losing trades.
- Or you can maintain winning trades that have significantly larger revenue wins that your losing trades.
Profitable traders operate under the risk reward system. According to Mr. Fuller, If we aim for a risk reward ratio of 1:2 on every trade we take, we only need to be right about 35 to 40% of the time to make a decent profit. He further estimated that a majority of professional traders generally win only about 40 – 60% of their trades. Winning 70 – 80% of the trades is not typical. Professional traders operate with the understanding that as long as the wins outperform losses by a significant margin—the liability of having to win a majority of trades is reduced. Mr. Fuller advised that you can be wrong more than you are right and still make money in the markets. Utilize the power of risk and reward to ensure that your wins far outweigh your losses.
3. Understanding the Specifics of Trading
If you want to develop a career in Forex trading, you need to understand how it is different from owning a traditional business. Basic Business 101 teaches that you sell a skill, service or product to those in a specific market in order to make money. Trading is similar in that you are working within a specific market. However, you are not providing a specific service or product to that market. One similarity is that you need to treat trading as a serious business if you hope to become successful. Discipline, commitment and a hard work ethic is also needed. Mr. Fuller advised that it is vital to realize that to be successful in your Forex trading business, you cant be forceful or control the market. All you can do is identify what is happening and determine if your trading edge is present or not. Basically, you can control your reactions to the market, but you cannot actually control the market and what is happening with your trades. One lucky trade or hot tip is not going to safeguard your financial future. Mr. Fuller also advised that running your business on autopilot wont give you the success you want either. Developing a successful trading career takes care, consistent effort and an efficient trading strategy.
4. Key Factor in Building your Business
A key factor in building your trading business and developing a successful career is dependent on how well you have been cultivating your trading skills. Mr. Fuller suggests that you create a specific set of trading rules—based upon solid advice—that are best suited to you and your current situation. Follow those rules and continually learn how to improve your trading skills. According to Mr. Fuller, successful traders enjoy their profession because they have faith in their rules and their methods.
Developing a successful career in Forex trading takes time and a consistent effort. However, it is worth the investment of your time and money; especially if you learn the right skillset for trading the correct way. Always remember that to be a successful trader, you need to treat trading like a serious business, work hard, and believe in the trading rules that you have established.
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