Forex can be a captivating pursuit. Its unique challenge can be enough to get the aspiring trader hooked, and brokers like ETX Capital have an extensive clientele, every one of them devoted to their endeavour.
Yet it is not for the faint of heart. High risk and high reward, it is a game that takes skill, dedication, determination, and grit to master, and those who fall by the wayside will inevitably be left with battle scars to mark their defeat.
The greatest danger lies in believing it to be a gamble. Lady Luck will always have a part to play in determining success, yet it is the talented, not the fortunate, who score the most lucrative victories on the currency markets. Armed with experience, intelligence, and knowledge, they are masters of their art, and the perfect example for you to follow. They will give their all in the pursuit of profit, and most of them follow a rigorous daily routine in return for results.
If you share their hunger, then here’s where to start…
#1: Get to Grips with the Markets
The most important weapon in any forex trader’s armoury is knowledge. You cannot read nor interpret the markets without first understanding the fundamentals of how they work, and the truth is that you’ll never know all that there is to know. Luckily, there are thousands of sources to draw from for those with the determination to learn and succeed, from books to blogs to YouTube tutorials. Most forex traders will have a number of these that they regularly return to, and many will start and end their days by trying to improve their understanding. The earlier you start to compile and study your own list of useful sources, the more quickly you’ll begin to succeed. And when success translates to profits, you have all the incentive you need to step up your game.
#2: Read Data and Charts
A large amount of a forex trader’s day will be spent studying data and charts, and the majority of this information will be supplied by their broker. This is the reason that it’s important to pick your professional support network with care if you decide to give trading a go, as their services and packages will play a key role in determining your success. The precise tools and information at your disposal will be dependent upon the firm that you select, so unless you’re 100 per cent satisfied with their usefulness then you’ll want to look elsewhere.
The more time you spend studying this information, the more likely you are to spot trends and patterns as they emerge, helping you to seize the perfect windows for trading. So that you don’t have to assess them constantly, stop loss orders and similar tools will become your best friends, so it’s handy to learn what exactly is available to you, and how to put these to use, before you start laying your money on the line.
#3: Assess Economic Calendars
Another tool used by forex traders is the economic calendar, and most investors will study one of these at least once per day. The concept behind them is simple: they showcase any known major events, either financial or political, that seem likely to impact the markets, so that traders can act in advance of their effects. This means that should you wish to apprehend the impact of a central bank decision on your chosen currency pairs, for example, you would have the requisite advance warning to help you do so.
To try this without trading, take a look at a few of the upcoming events contained within them, and see if you can apprehend their likely impact on the markets. By tracking the correctness of your assumptions once these events come to pass, you’ll be able to see how successful you would have been if your profits had really been on the line.
#4: Study the News
The forex markets do not act in isolation of the wider world; rather, external factors are a major driver of the emergent trends and patterns that impact trade. Everything from social discontent to political upheaval, central bank decisions, natural disasters, and conflict can influence the value of currencies, and thus have a causative effect on market movements. The best way to apprehend these is, of course, to stay up to date with current affairs, and this means that the average trader will spend hours every day reading and studying newspapers and digital media, looking out for potential drivers that could affect their tactics and strategies. Many will be subscribed to multiple publications, receiving daily updates via their phones and other technological devices.
A good exercise for would-be traders, therefore, is to take a look at what’s happening in the wider world, and make notes on how you think these events may impact the markets. Keep an eye on the outcome to help you chart the validity of your intuition, and you’ll soon discover whether or not you’re really ready to begin trading.
#5: Follow Financial and Investment Market Blogs
No trader makes their decisions solely on the basis of their intuition; instead, their choices are impacted by a multitude of factors, from information to recommendations. There are thousands of people out there studying market movements, and luckily for investors, some of them are generous enough to share their insights via blogs, either written or uploaded onto YouTube. The best of these are an invaluable source of information for the ambitious and the eager to learn, and most top traders will spend a lot of time reading and following the advice and assertions made by those they most admire.
If you’re considering trading yourself, it’s a good idea to start finding and reading some of these blogs now. By studying them for a few weeks, you’ll soon discover which are the most accurate, and which you could trust to provide sound advice if you really were investing your capital – an invaluable shortlist for when you begin trading for real.
Now that you know what it involves, could you be cut out for the fast and furious pace of the foreign exchange? If so, give it a go today and set yourself on the path to success.
A Day in the Life of a Forex Trader: Top Tasks to Prepare For
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