The Forex market is another form of the foreign exchange market for currency trader. It is the process of exchanging a currency into other currency for several reasons, might be for trading, or tour. According to some recent reports from the Bank for International institutes, the turnover of the Forex market is currently at more than $5.1 trillion.
In the next section, we will see the basics of the Forex market including the elements of it. Therefore, you would know how overall activity in this market occurs and how you can make a benefit from the foreign exchange market.
If you want to be a complete currency trader, you should have some characteristics, and there is no alternative to it. In the below section, we will discuss the characteristics of a complete currency trader.
You can match with these, and if you find any lack in yourself, you can focus on improvement.
Characteristics of a Complete Currency Trader
The Forex market is the world’s biggest financial market, where the main participants are central banks and financial institutions. Therefore, retail traders have less scope in the Forex market as the key driver in the market does not care what the retail traders are thinking.
So, what the analysis you do in the market and predict the price means nothing to the market participants.
Therefore, no one in the Forex market can guarantee you a 100% profit. Even institutional traders and hedge funds do not guarantee you a 100% profit.
All people worldwide see the same chart, and some people can make a profit, and some people cannot.
What is the difference between a successful trader and an unsuccessful trader?
Besides learning the trading, successful traders know how to manage the trade and cope with the unavoidable risk.
If you know the characteristic of a complete currency trader, you would understand your failings and area of improvement.
In the following section, we will see the characteristic of a complete currency trader:
#1 Knowledge about the Market
It is the primary difference between a successful and unsuccessful trader. Knowledge means the structure of a currency pair, which is different from other currency pairs.
For example, EURUSD is the world’s most massive traded currency pair. When the Euro becomes strong, people buy EURUSD, and when the EUR becomes weak, and USD becomes strong, people sell EURUSD.
If you don’t know the relationship between the Euro and the US, you cannot profit from it.
Furthermore, it would help if you practiced trading in this paper to understand how it reacts to every fundamental release.
For example, how the pair moves after the non-farm payroll release and how it reacts to interest rate change.
Every currency pair has some unique characteristics that a successful trader should know. There is no way to learn it by the institution or reading an online portal or books.
The only way to know about a currency pair is to do enough practice.
Therefore, you should focus on making and practicing to see the price reaction before implementing a trading strategy with real money.
#2 Trading Strategy
A trading strategy has some rules after reading that its reader follows in every trade. As a trader, you should develop your trading strategy with proper money management.
There are a lot of trading strategies in the world, but all of them are not profitable. Therefore, you should learn a trading strategy that has a history of providing profitable trades.
After having a trading strategy, you should implement it in a demo account to get familiar with it before trading with real money.
A trading strategy has some rules after reading that its reader follows in every trade. As a trader, you should develop your trading strategy with proper money management.
There are a lot of trading strategies in the world, but all of them are not profitable. Therefore, you should learn a trading strategy that has a history of providing profitable trades.
#3 Money Management
Having a trading strategy is not the final solution to be a complete currency trader. The core area of being a successful trader is how they manage the risk. Money management is an integrated part of a trading strategy that every trader should follow.
You cannot take risk on all of your investment in one trade. In the Forex market, we trade only probabilities.
Therefore, when a trading setup appears, you enter the trade based on the likelihood that it is likely to move toward your desired direction. There are no fixed rules to say that your business will hit the take profit.
Professional traders do not take more than 2% to 3% reach. However, you should maintain a decent risk-reward ratio in your every trade.
The standard risk-reward ratio for every trade is 1:2. In this method, you are taking 100 pips to reach 200 pips gain.
#4 Trading Psychology
Trading psychology is the hardest part that most of the traders struggle to maintain. The Forex market is a very volatile and uncertain market where the movement is unpredictable.
Even institutional traders do not know where the currency price is heading. When you see your trading strategy is not working well, you would be company and start to make wrong trading decisions.
A complete currency trader knows how to handle the stress of making a loss and minimize greed when you see a lot of profit in your chart.
Fear and greed are the standard terms in the Forex market that most of the traders are struggling to cope with. To get rid of this obstacle, you should focus on your strategy, read more about human psychology, and think about its style.
Summery
In the above section, we have seen what the character of a complete currency trader is. The Forex market is a unique place to buy and sell currency pairs, where most of the participants anticipate the movement.
Therefore, to become a complete currency trader, there is no alternative to having the characteristics mentioned above.
Match yourself with the characters mentioned above, and if you find any lacking, focus on your learning and knowledge.
Recent Trade Idea You May Follow
Share on facebook
Share on twitter
Share on linkedin
