Posts Tagged ‘forex trader’
Before starting the work on Forex each trader needs to elaborate his/her own, individual business plan that will help him to succeed in carrying out operations on the market.
We shall touch upon the most important points to be considered when elaborating an effective business plan.
1. Personal growth
Being optimistic is vital for a trader, since negative mood is a key hindrance to cope with.
It is a peculiarity of human psychology that one cannot succeed all the time – there are both ups and downs in any enterprise.
A negatively thinking person is fated to suffer losses and be incapable of taking steps towards success. Thus, a trader needs to set achievable goals. Only through accomplishing small subgoals will you reduce negative emotions’ effects and develop positive thinking.
A trader should seek to transform all his/her negative emotions into positive ones. More positive thoughts will help you to get rid of previous negative impressions. The victory over negative emotions is the first step towards success.
2. Figuring out the aim of trading
1. Defining general priorities of activity.
2. Calculating time expenditures and economic costs.
3. Writing a plan.
4. Methods of planning.
5. Maximum hedging against possible losses.
6. Profit and loss calculation.
Finding out the main priority of activity
Let us outline major priorities of a trader. If you strive for success on Forex, you definitely should:
– invest in books, seminars and market researches;
– cooperate with prosperous traders;
– be open to new concepts and ideas.
A trader willing to gain constant profit should:
– focus his/her attention upon price dynamics of a given short-term trading market;
– make every attempt to ensure over 70%profit;
– assist other traders in exploring Forex.
Calculating time expenditures and economic costs:
- Economic costs:
Before becoming a trader one should define the amount of funds necessary to start with, including an initial deposit, computer software, a trading program, quotations, books etc.
- Time expenditures:
These imply the time you are ready to spend for trading. Some traders work several hours a day, while others can trade as much as 16 hours daily. You need to decide which period is the most convenient for you and to keep an eye on what happens on the market.
Writing a plan
It is of crucial importance to chronologically record all the operations you carry out on the market. Write down all the deals you made in your trader’s notebook in order to analyze them at the end of your working day.
Methods of planning
A trader should choose the methods he/she will use for entering the market and be always prepared to react to slightest market changes. A trader should be able to clearly gauge a moment to close a deal whether it is profitable or unprofitable. Decide in advance on which ways of closing a deal you will employ.
Maximum hedging against possible losses
If you suffer losses deal after deal, there must be some drawback in the strategy you elaborated. Sticking to such style may well result in complete waste of the deposit. If, however, you are armed with a set of rules for this situation, you are sure to preserve you composure at watching your balance decreasing so that you will be able to restore profitable trading.
Profit and loss calculation
The last but not the least: a trader should define what profit he makes for a month taking into consideration all the trading expenses. Forex trading is in fact a sort of business which sooner or later yields profit. In order to make it maximum, elaborate your own trading plan and then be sure you will succeed on Forex.
Added by Evgeny Staroviborny,
InstaForex Development manager
The majority of totally green on Forex traders start their market experience with intraday or short-term trading. Which can be easily explained, as there is no need in possessing a substantial initial capital for such type of currency market operating; in addition, a trader has a possibility to test the trading methods that he or she has chosen for working.
Basically, the structure of price movement is nearly identical on five-minute and on four-hour charts. Irrespective of the chart, there always emerges a market pattern with the impulsive correctional waves. In order to estimate the efficiency of the developed trading strategy, it will be more comfortable for a market player to analyze it on short time intervals. However, one should keep in mind certain features of short-term trade.
- Macroeconomic news and speeches of high-ranking officials and politicians. A trader must consider these facts. Right after releases of key news, there emerge fluctuations. It extremely difficult to forecast climbing or falling. Though a trader that is working with a short-term chart should predict a possible price advance before the news release. The best way out is waiting for the news publication, of course, if there are no open positions on the account. If the deals bring profit, one should fix it, and the positions with losses need setting up the stop-losses.
- A trader should make allowance for the trading session as well. Four trading sessions are known: the Pacific, the European, the Asian and the American. As the market is functioning 24 hours a day, one is able to conduct deals at any time in a 24-hour period. Nevertheless, during the night there can be either strong wobbles or, on the contrary, trading is slack. Consequently, it is essential to choose carefully the time of trading and the currency to work with.
- Besides, the choice of the day for trading is also very significant. Here Monday and Friday perform the main role. On Monday, the trading week opens with gaps, in particular, if important events took place during the weekend. And at the beginning of the week traders start to observe the situation on the market. Friday, on the other hand, facilitates sharp price jumps. It is caused only by a trading session coming to an end. The majority of traders do not leave open the positions through the weekend, thus, by closing the deals they raise the price dynamics.
These are the general traits of short-term trading.
The interview was obtained by Anna Shubina ,
InstaForex Clients’ relationship manager