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Things I have Learned From Daytrading Millions Of Dollars

Forex Trading

Daytrading is the best job in the world on the days you make money. You make a trade, then maybe 20 minutes later you are out of the trade with a profit, and for the rest of the day, you think about how much money you made. It's the worst job in the world on a bad day. I would make a trade, it would go against me, and then I wanted my heart to stop so my blood would stop thumping so loudly.

Here's what I learned. All of these lessons I will certainly use today, many years after I stopped day-trading.


1) You can't predict the future, everyone thinks they can but they can't

  • This applies not just to trading but everything. You could be married for 10 years and the next thing you know — you are divorced and you would not have predicted that.
  • You can always seek to increase the odds in your favor — if I don't jump off bridges, for instance, it's more likely I'll be alive a year from now — but certainly, a path to unhappiness is thinking the future can be predicted and controlled.

Forex Market Participants

Foreign Exchange is the largest financial market in the world with a daily volume of more than $5 trillion.

The Forex market operates as a decentralized network where institutions and common traders can carry out their foreign exchange transactions. There are many different categories of participants including banks, commercial corporations, investment firms, retail traders, and of course hundreds of Forex Brokers.

These are the key players in the Foreign Exchange market:


■ Interbank Participants

The interbank market is the leading power in terms of currency trading volumes. Banks of all types and sizes trade currencies through the ECN (Electronic Communication Network). Large European Banks account for a large percentage of total currency volumes. The leading private banks in the Forex market include Deutsche Bank, UBS, and Barclays.

How to Become a Forex Broker

Reuters recently reported that the Forex market sees over $5.1 trillion worth of currency trades every day. All the world’s equity markets combined don't even come close to this figure. The trading of big amounts of money every day is one of the major reasons why some people opt to become Forex brokers, including experienced traders.

Of course, like in any other career, you need hard work and discipline to become a successful Forex broker. Those who succeed can make a healthy living through trading, but an added benefit of becoming a successful broker is networking with other traders who can assist you in forming a money management fund in the future.


Understanding the Forex Market

Before you can become a successful broker, you need to have a good understanding of the Forex market. Make sure you fully understand the underlying principles behind currency pairings and different sub-disciplines that play a role in the field, such as technical analysis and macroeconomics. Be on the lookout for new jargon, pricing, orders, and anything else that can help you give sound advice to your clients.

That being said, don’t just rely on your research. One of the most effective ways to learn about the Forex market is to talk to practicing or retired brokers. They will be able to give you practical advice that you will not be able to find in books. If you can't find any practicing or retired Forex brokers, search for online discussion groups.

Forex margin requirements

Are you about to start trading in Forex? If so, you're certainly planning to use leverage to multiply your profits. But to use leverage, you'll have to know about Forex margin requirements.

Currency pairs will each have specific Forex margin requirements, and these are related to regulatory decisions, as well as expectations from the market.

Let’s take a look at what exactly Forex margin requirements are, and how they will affect you.


What are Forex margin requirements?

Forex margin requirements go hand in hand with leverage. When you use leverage, you are essentially trading on values that far exceed what you're depositing. The “margin” refers to the actual deposit.

Forex margin requirements, therefore determine what you have to deposit to trade. For example, a margin requirement of 1:50 implies that you have to deposit 2% of the value of the trade.

How to Have a Forex Trading as a Full Time Job

Forex trading is usually described as a part-time job or a “hobby”. It’s true that a majority of forex traders is doing this part-time, while they’re keeping their steady, full-time jobs. This turned out to be a great way of generating extra income for many. However, all these part-time traders probably dream of quitting their 8-hour jobs so they can start earning money while working when they want and from anywhere in the world.

This is a dream that can come true, but you need to keep in mind that it will be a hard road to get there. Persistence, a high level of knowledge, and experience are the first steps toward the goal, but they are not enough. Like in any other small business, 95 percent of traders will lose and many of those will give up on trading eventually. Here are some tips that will help you to fulfill your dream and start making real money through forex trade, full-time.


1. What skills do you need?

Before you even start thinking about trading forex full-time, you’ll need to obtain the necessary knowledge and skills. There are lots of websites that are sharing their knowledge with people and provide forex training guides. Even beginners need to learn the essential terminology and most simple trading strategies. If you want to do this professionally - you’ll need to put much more effort into gaining skills and experience. You’ll need to create your own trading style by mastering several strategies and knowing when to apply them. Some personality traits will certainly help in this venture as well: rationality, cautiousness, and analytical mind.

Making Money by Scalping Forex

So what is scalping and how does it work? Forex scalpers get in and out of the market at the drop of a hat, they don't chase big swings or trends but rather seek to capitalize on the small intraday fluctuations that occur throughout the day in forex. 


Forex Scalping Strategies

If you want to start scalping forex, you're going to need to find a scalping strategy that works. With longer-term trading, a strategy is not quite as important, but when it comes to scalping, the quality of your strategy will largely determine your success. When it comes to selecting a forex scalping strategy there are a couple of options available to you:

The first option is to develop your scalping strategy. Most longer-term strategies can be adapted for scalping with a little tweaking. For example, you could trade trendline breaks, and candlestick patterns or use a range of technical indicators. Generally, you'll want to be looking at 1m or 5m charts, though many people consider the 15m chart great for scalping too. The main thing to remember is you're not usually going for high-reward trades, the idea with scalping is to win more often than not, that is, if you have a choice between taking 2 pips and taking a loss, take the 2 pips.

A great way to start developing your scalping strategy is to start playing around on a demo account, don't worry about blowing the account, just focus on taking lots of quick trades and seeing what works and what doesn't. You can sign up for a free Forex demo account over at the Vantage FX website.

Don't you want to develop your forex strategy? Another option available to you is trading someone else's strategy. Forex forums are a great place to start if you want to trade someone else's strategy. Though most people keep their forex scalping secrets to themselves, there are a surprising number of helpful people out there who share strategies for free on forums. This approach requires a little less legwork, though you will still have to do a fair amount of research.


■ Making Money by Scalping Forex

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