Helping You Decide Whether You Should Become A Professional Forex Trader
Before deciding to become a professional Forex day trader
, consider that only around 11 percent of day traders are actually profitable and 70 percent of people lose money day trading, according to the North American Securities Administrators Association. Having a solid Forex trading strategy, system, state of the art software and the discipline to learn the foreign exchange market are all vital to success and in addition, not everyone possesses the timing, personality and funds necessary to become a successful professional trader, yet many still try to enter and succeed at one of the most risky careers out there.With many different Forex trading strategies to choose from, it is important to choose one that fits your style and that you stick to it. Each strategy has a unique mindset, so trying to juggle more than one can impede your overall success. For example, swing traders try to anticipate peaks and troughs over the long term, sometimes a period of days or weeks. On the other hand, scalpers look for minute-to-minute entry and exit points, with no regard for long-term actions. Switching gears between the two is confusing and dangerous if done without proper research first and you could lose your entire investment very easily.
Profitable traders must also have a system to work with and the proper tools to implement it. Forex trading software offers many systems to assist traders, such as automated, advisory and rule-based systems. Good software provides traders access to accurate data quickly, which is vital for those who trade for a living. Also, there are some fantastic software packages offered to traders that allow them to create their own customized trading system and there are others that allow traders to utilise more than one system at a time, which can result in a greater accuracy in Forex trading.
Regardless of how many resources traders have access to, if they do not have the discipline to prepare and concentrate on their trades, it is highly likely that they will lose money. Whilst luck may sometimes be on your side and you may make a certain amount of money with what appears to be little effort, it is important that you do not get over-confident. To trade profitably for a living, you must consider trading as more of a science and less of a gamble, as although Forex trading can be very profitable, luck is not an adequate trading strategy for professional day traders.
Timing is essential in Forex trading, as second guessing your strategy can cause you to miss out on lucrative trading opportunities. Therefore, having a confident and assertive personality is essential if you want to trade for a living. If you trade based on emotion, you will lose sight of your plan and ultimately lose money and although losses are inevitable, taking them in your stride and being able to learn from them is paramount.
Finally, you will need to have a sufficient amount of funds available for trading whilst you refine your strategies. Many professional day traders trade on margin, but beginners should avoid this as it is possible to lose all of your own investment, plus more, putting you in the red before you have even become fully accustomed to becoming a full time and professional Forex day trader.
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