Forex trading can be a rewarding and profitable profession. Like any profession it takes practice, persistence and an ongoing education program. The first thing to understand about forex trading is that it is not gambling. It is a pastime that requires a range of skills and a great deal of discipline. While gaining access to a forex trading platform is a relatively simple process you simply can’t wake up one day and decide to be a full time trader and expect to succeed. You need to learn and practice the necessary skills and strategies to give you the best possible chance of success.
If you really want to make Forex trading a fulltime job, you need to get your head around some fundamental concepts. These concepts include:
- By its very nature Forex trading is not investment. Forex trading, as the term implies, involves trading currencies over the short term to generate profits whereas investment involves a longer-term view.
- Forex trading is done on the internet. No physical transactions take place. Orders are all done in cyberspace and profits and losses in line with currency price movements are recorded against your account.
- A lot of the potential profits and risk to be generated from Forex trading comes from what is known as leverage. Understanding leverage is critical if you want to make Forex trading a full-time job. Most currency pairs fluctuate in a fairly narrow range. The narrow range will not usually generate substantial profits. However, by strategically using leverage you can increase the profits (and potential losses) substantially. A Forex broker like USG can allow leverage on trades of up to 50:1. Understanding the potential power of leverage and the ways you can minimise the risk associated with it is crucial to succeeding long term with Forex.
- There are many different currency pairs that you can trade in. As each currency is subject to its own set of unique economic and political factors, it pays to specialise in trading in one or two selected pairs of currencies. A lot of time should be devoted to learning the intricacies of these currencies and the factors that are likely to affect them. A trading pair is the term applied to the two currencies that you choose to trade in. The Australian dollar is often paired in trades with the US dollar (AUD/USD). Other common trading pairs are the Euro and US dollar (EUR/USD) and the Yen and the USD. Once you decide which pair(s) to specialise in, significant time and effort should be spent learning the intricacies of the relationship between the two currencies. This would involve learning such details as key economic dates, major commodities that the countries import and export and other economic and political factors. The more you know, the better prepared you will be.
- Good traders are able to work strategies while controlling the emotions that can cause them to make bad decisions. Planning and control are key components to being a good trader.
If you are serious about making forex trading a full-time job then it is imperative that you become fully conversant with these concepts as well as the language and mechanics of forex trading. You can get started today by setting up a free account with USG and tapping into the wealth of free training and education available through the USG platform.
In our opinion the USG Forex traders’ course is the most comprehensive and personalised forex traders course on the market today. It covers every trading concept including:
- Market analysis
- Trading psychology
- Risk Management
- Trading strategies
Start your Forex education today and use our demo trading accounts to get a grasp of the fundamentals. You can make Forex trading your profession provided that you have the knowledge, discipline and mindset. You can discover if you’re suited to the Forex trader’s life by enrolling today.