Becoming a trader
Can individual investors become currency traders? The answer is yes. Anyone who is serious, rigorous and realistic enough can learn everything there is to know about currency trading. To become a forex trader and make money on a regular basis, it is essential that you be organised and work in an intelligent manner. Success in the foreign exchange market depends on the trader's trading strategy as well as the discipline with which the trader applies his strategy. The below articles will teach you the concepts you need to know in order to invest in the forex market like a professional trader. These tips are easy to understand, yet most investors do not have the psychological profile nor the rigor that are required to develop the mentality of a professional trader. You can also read our articles on the psychology of traders to further your education and acquire the discipline needed to properly use a forex trading strategy.
Getting started with trading
This short guide is intended for beginning traders, it is intended to explain the basic concepts of forex trading: demo accounts, spreads, leverage, lot sizes, types of orders…
There are different steps involved when learning how to trade. Let’s take a look at the 6 steps that a beginner faces on his journey.
In this article, you will learn how to become a professional trader or a home-based trader.
Books on trading can be useful to learn trading. They provide a wealth of information and are usually inexpensive compared to formal training courses.
Some tips to avoid the mistakes that are typical of beginners traders. Know the broker’s trading conditions, secure your profits, follow the trend, establish a strategy, manage risk, etc…
7 deadly trading sins that traders should avoid. Risking 2% of the account, being greedy, day-trading and scalping, technical indicators, arrogance, using exotic currency pairs and thinking too much.
There is no magic formula enabling one to become a profitable forex trader. There are as many approaches to trading as there are traders. Nevertheless, professional traders have things in common in terms of how they approach currency trading.
Here is a neat and nicely arranged list of key things you need to know in order to become a profitable trader. Although this list is not exhaustive, you’ll find the following tips to be very useful.
Types of trading accounts
A brokerage account allows you to access the best stock market shares, but should you have to open a cash trading account or a margin account?
Even when a trader does great when trading on a demo account, his results on a real account are often way different.
Demo accounts are ideal to learn how to trade for free and without any financial risk. However, they don’t enable you to develop the psychological aspect of trading.
The transition to a real trading account is difficult and often leads to losses at first. Here are a few tips to know if you are well prepared. Make sure that you go through this checklist before you invest your savings in the ruthless world of forex trading.
Tips from trading professionals
Traders oftentimes lose money because of a lack of rigor or discipline. Ironically, these investors are usually aware of the reasons of their failure, but they are unable to adopt the mindset of a professional trader. Here are 10 reasons which explain why professional forex traders make money.
William Delbert Gann, a famous American trader (1878-1955), earned $50 million during the Great Depression. In 1933, he performed 479 trades – 422 of which were winners – which enabled him to achieve an overall gain of 4000%! He is credited with… (more…)
Dennis Gartman has been directly involved in the capital markets since July 1975. (more…)
In forex trading, a gregarious instinct (or “herd mentality”) refers to those traders who blindly follow the trend set by the masses. These traders generally adhere to the well known investment saying “the trend is your friend”.
The various markets in which you can invest online
Futures are among the oldest derivative contracts. They were created for farmers who needed to hedge against crop price variations, between planting and harvest.
|Trading commodities – Online guide and brokers|
This beginner’s guide explains what is involved in commodity trading, as well as investment tips and sample strategies. We also list the best brokers for commodity trading.
The most important aspects of risk management in trading: the risk/reward ratio, position sizing and the fixed risk in pounds (or euros, or dollars, or…) versus risk as a percentage.
This article, written by a professional trader, explains three methods for managing risk. Risk management and position size management can make the difference between two traders who use the same entry and exit points.
How to calculate the amount of capital you are willing to risk before you have to stop trading (commonly referred to as the “point of ruin” or “maximum drawdown”).
Proper money management allows one to maintain control over the risk/reward ratio of each trade. It significantly increases the likelihood of making money over the long run through management rules pertaining to stops and position sizes. The mastery of risk is the basis for success in forex trading.
This system tells you how much you can invest in a position based on the risk level you’ve chosen and the performance of your strategy.
A forex trading plan helps traders avoid making mistakes. It consists of a set of rules that precisely define the trading strategy, money management and the management of emotions.
A hybrid trading system which combines a mechanical (or automated) approach and a discretionary approach can be ideal for forex traders who are influenced by their emotions.