Nowadays the Forex market has become one of the most in-demand markets for investors, money managers and those who want to increase their income. However, it takes a lot of experience, time and risk management to become a professional trader and avoid losing money. As I see it, a good broker with acceptable spread and wise leverage will work fine, but what’s really important is your trading style!
First of all, if you are going to be a trader you must control your feelings, your behavior, your reaction to the market, and to any loss you confront; it’s a psychological game that you should be aware of and ready for, otherwise you will lose your money sooner or later from being so greedy or being so hesitant. So remember, always stop yourself from falling prey to your emotions, balance is the key.
Secondly, the charts you see of any pairs is like someone who is talking to you but highly intelligent and sometimes unpredictable so you need to learn his language correctly so as to react to his actions. This is in essence the Forex Market. It takes a lot of effort to understand each pair’s personality, in addition to its nature and to control your own desires and nature.
For example, you will see that EUR/USD reacts totally differently in comparison to that of the AUD/USD.
Even if the news affects the common currency between these two pairs (USD), each chart will respond in a different manner and with different volatility.
So it’s not just with fundamental factors or technical analysis that we get a grasp of the market; it’s much more like you are learning an artificial intelligence language.
Many people try a lot of trading styles, like a day-trader who enters and exits the market in the same day.
Scalpers are classified as a sub-category of day traders who try to enter and exit the market so quickly, taking 1-5 pips and repeating this method all day.
Swing traders is a term used to describe those which trade over the medium term. Trades could take a day a week or even a month until you reach the target profit value.
Position traders conduct trades over the long term, taking positions and wait until they hit the desirable level, even if it takes months.
All of these styles are great but they also can fail you if you still don’t have what it takes to control your feelings and understand the chart language.
The main point which you should understand to be a successful trader is that you should depend on much more than fundamental or technical analysis. You should use both when considering pair behavior and the suitable style of trading that fits you and this pair. Eventually you will work out a strategy for each pair and get what you seek from each opportunity you see in the market. This takes a tremendous amount of effort, but, having mastered these abilities, you will be a professional trader.