Online forex trading for professionals is characterised by commitment and dedication as traders take this very seriously and consider it a full-time career. Through using various training methods that provide consistent results, beginner traders can become professional traders. Also being able to determine which techniques can be successful in the market, can also boost your expertise.
Before we move on to understand how professional traders work, let’s understand the forex market a bit more. So, what are the three ways to trade in the forex market?
Even though the concept of forex trading is very similar to currency exchange, it is interesting to notice that a majority of forex trades are not made to exchange currencies. Rather, the purpose is to either speculate or hedge a position in respect to future price movements. The most popular ways to trade in the forex market are:
- Spot Market: This could be explained as the primary market wherein currencies are traded and exchange rates are determined based on actual demand and supply on a real-time basis.
- Forward Market: If we have a futures contract then a trader could enter into a contract with another trader regarding an exchange rate decided in the current time for delivery at a future time.
- Futures Market: The traders could also enter into a specialised contract to either buy or sell a predetermined amount of currency at a specific exchange rate in the future. Contrary to a forward contract, this contract is carried out through an exchange.
Read on to learn what a professional trader is, what the types of expert traders are and why MT4 is the best choice.
Definition of a professional trader
If you are a professional trader, it means that you work in finance or you are engaged in investing as a full-time career. These traders either work for themselves, for a CFDs broker or other investment firms, or even as freelancers that trade on behalf of other clients. All environments require the same duties more or less. However, each trader has different experience and education. There are two types of professional traders:
- Day traders: Open and close positions at the beginning and end of each trading day.
- Swing traders: Hold positions for various days in the hope of potentially generating some revenue from market fluctuations in the long term.
The role of the professional trader is to buy and sell investment products so as to generate revenue. Let’s take a look at an example. If a trader buys a stock for let’s say 2 dollars per share and sells it when its value is 5 dollars, then the trader makes a profit. The professional trader’s job would not stop there. Instead, an expert trader would analyse the markets, build his/her strategy, review trades individually and engage with other experts in the field.
Tips for becoming a professional trader:
- Maintain your discipline
- Stick to your trading plan
- Spend time perfecting your strategy
- Stick to your defined rules
- Trust yourself
- Make use of your intuition
- Leave emotions out
- Be careful of warnings
- Accept losses
- Don’t only trust tools
- Know where to stop
- Think well
- If you lose, don’t trade more
- Go simple sometimes
Most traders fail to focus on who they are which eventually leads them to finding more traditional ways to make a profit. Becoming a professional trader requires following a few classic rules designed to keep you focused on your end-goal.
Why use the MetaTrader 4?
MT4 is the best online trading platform for professionals and the industry-standard, chosen by numerous traders worldwide. Its intuitive and customisable interface, its advanced analytical features and other tools make it the best choice for both new and professional traders as they can adjust it according to their level of experience. In fact, the platform offers access to technical and fundamental analysis, EAs (Expert Advisors) and basically everything an expert trader needs to view and manage orders and currency prices and place trades. Traders can download and access the platform through a forex broker.
Not to mention that MT4 is supported by Windows, macOS, Android, iPhone, and web browsers. Traders can log in to their account and monitor their trades on the go, anytime. The MetaTrader 4 Advanced for Windows enables traders to make use of the latest trading features like automated strategies and the built-in ability to use EAs.
Some of the features are as per below:
- Full control over orders and positions online
- Ability to monitoring financial instruments’ prices and exchange rates
- Ability to use advanced charting and indicators
- Access to online streaming news
- Access to detailed activity reports
- Use of permitted automated strategies
- Built-in ability to use EAs
Traders from all around the globe, download MT4 for online trading and make the most of its advanced features and tools.
What do expert traders do?
Professional traders step into more advanced techniques like the ones described below. Forex refers to exchanging currencies. It can also be speculative, such as in CFD trading. In fact, many investors hedge their stock portfolios with some percentage investment in forex, as these are stable commodities, given we’re sticking to national currencies of stable and large economies. Popular currency pairs such as JPY/USD have high trading volumes and are very liquid investments, making it attractive for short-term traders and investors with lesser available funds.
Since currencies fluctuate a lot, if one is in the business of exports or imports, they can hedge their future risk by entering forward contracts or swaps. Such contracts fix the exchange rate for a future settlement date. This secures the trader from potential future fluctuations and helps them realise/pay the actual value of goods or services provided/received.