Thinking And Trading Like A Professional Forex Trader

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Trading consists of negotiating financial securities (for sale or purchase) to generate gains after the settlement of its operations. Trade Forex process is a speculative financial activity: the trader seeks to estimate the evolution of the next value of a security to anticipate market movements. 

Thinking And Trading Like A Professional Forex Trader

They place orders corresponding to their predictions, and if these come true (rise in price or fall in price to a certain extent, as the case may be), then he obtains gains.

What Is Forex Trading?

Forex Trading is an activity that consists of negotiating or buying and reselling (and vice versa) financial assets (currencies, crypto-currencies, stocks, indices, commodities, CFDs, etc.) on the financial market, the purpose ultimate being to make the maximum possible gains at the time of the closing of the positions. 

It is, therefore, a question of predicting how the price of an asset will evolve and of placing stock market orders to take advantage of this evolution.

The calculation of trading gains depends on the asset being traded. With Forex, you will have to look at the pip value, position size, etc., which is not the same with indices and is very different when it comes to cryptocurrencies, for example. 

Either way, calculating the gain is still broadly based on multiplying the profit made on an asset by the number of assets traded or involved.

Stock market trading consists of negotiating financial securities (for sale or purchase) to generate gains after the settlement of its operations. 

Trading is a speculative financial activity: the trader seeks to estimate the evolution of the next value of a security to anticipate market movements. He places orders corresponding to his predictions, and if these come true (rise in price or fall in price to a certain extent, as the case may be), then he obtains gains.

What Motivates Traders To Trade?

Forex trading is an activity now accessible to everyone, showing probable immense, even unlimited, returns. But to succeed with trading on the financial markets, you must train beforehand and continuously, requiring consulting guides like this one. In this guide, we tell you everything you need to know about stock market trading.

Traders are motivated by the desire to earn. However, motivation per se is accompanied by fears, greed, and hopes that sustain it.

Understanding the element of fear when trading is perhaps the very first emotion you feel when seeing charts, tickers, and stock market information that you cannot understand, and it is a scary concept. 

You may be scared to invest your money, but you may be losing out on possible gains. You may feel afraid to invest in something that you do not know about. But, by understanding what fear is, you can overcome it. When investing, there is nothing to be afraid of.

Traders who have had some market exposure will know that they want to hold on to their time when things are good. This mindset can lead to catastrophic accounts due to rapidly changing markets. 

Overcoming a blow is not easy, but overcoming greed will be even more difficult because you have to know when to step back and enjoy what you have achieved when you have profited from a trade. You need to identify the feeling of greed quickly, decide that you don’t have to “do a little more,” and stick to your trading plan in which you already base your initial decision on rationalization. Greed can lead to excessive trading.

In trading, hope is an unnecessary emotion, although all traders feel a sense of hope, no matter the cost. Being an optimistic trader is necessary but must be kept in check, as a positive and motivated disposition also requires a reality check when trading online. 

Traders often fall into the trader’s trap of creating a false hope that the markets will adjust and save their position if they give it a little more time. This is a textbook example of the wrong approach to trading.

Right Forex Trading Attitude

Beginners are not already capable of experimenting with more complex trading strategies. The best strategy will be “trend following,” which consists of taking advantage of periods or phases of strong trends to trade and reap significant gains. 

During periods of calm, the newbie trader might simply not take a position and wait for the next intense trending period. This will avoid loss of earnings and time.

Discipline

All successful traders have a strategy. Trading financial securities based on a well-thought-out plan and executing trades with discipline is the first step to success.

This advice applies to all traders, especially beginners. It takes time to educate yourself, even when already active in the markets. You never stop learning how to trade.

Build up your capital with money you can lose: raising capital is essential to start trading. Invest an amount according to your assets so that a 100% capital loss does not deteriorate your quality of life.

Objectivity

Build up your capital with money you can lose: raising capital is essential to start trading. Invest an amount according to your assets so that a 100% capital loss does not deteriorate your quality of life.

Traders share their opinion in forums and sites dedicated to evaluating company services (Trustpilot, for example). Comparing the opinions of various users of trading sites will help you make a better choice.

Patience

Leave aside your emotions: stock market trading and emotions do not come cheap. Regardless of your attitude and state of mind, always remain lucid and rational in your analysis and trading decisions. For example, don’t trade a rising Stock CFD just because you like the company issuing that stock.

There is a wealth of literature on trading. These books expose all the principles and skills necessary for the practice of stock market trading. Some are purely didactic books written by experts. Others are books written by successful traders who share their experiences.

Realistic Expectations

In stock market trading, profits are not necessarily correlated with the intrinsic performance of the financial assets traded. A trader can make gains on an asset whose price is rising if he opens a long position and unwinds it when the price has risen. 

They can also make gains on an asset whose price is nevertheless falling: he just needs to place a trade or a position on the decline, i.e. a trade that predicts that the price of the asset will go down; and when that price drops, it makes gains.

Common Active Trading Strategies

  • Scalping: This strategy is used in markets with high variabilities like Forex and crypto-currencies (although not all currency pairs and crypto-s are very volatile). It consists of the trader chaining many trades, the average duration of which is a few seconds or a few minutes. Scalping allows you to generate profit by taking advantage of slight variations in a price to earn a large number of small margins. Chart analysis is a central scalping tool.
  • Day trading: day trading is a strategy whose time horizon is the trading session (one day). The positions opened by the day trader are kept for a few hours and generally closed at the end of the session. Day trading relies on short-term trend analysis to generate profit. The number of positions opened and closed in one day is less than in scalping.
  • News trading is simply a matter of trading according to announced financial information. It is, therefore, necessary to listen to financial news, analyze them and take positions according to the influence that we anticipate that these announcements will have on asset prices.
  • Swing trading: Swing is a strategy traders use on less volatile securities such as stocks. It uses medium-term chart analysis as well as fundamental analysis. Indeed, its time horizon is several days or even several weeks. At this scale, financial information can already have an impact.

Summary

Trading on the stock exchange is done from trading platforms. These are working environments accessible online or by software/applications to be installed. 

The trading platforms offer all the functionalities necessary for the trader to exploit his capital on the financial markets: order placement, technical indicators, economic calendar, and installation of expert advisors. 

There are two types of platforms with online brokers: licensed platforms, developed by third-party companies; and proprietary or native platforms, developed and operated by online brokers themselves.

Trading and investing in the stock market aim to generate capital gains and gains. Unlike other professions, which may have other social or economic objectives, the activities of both the trader and the investor contribute to the return on capital.







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