The Tao Of The Wealthy Currency Trader (Forex Trading)
The word 'tao' literally means 'way,' so what we will talk about in this article is the way of the wealthy currency trader.
For clarification, the market to which I am referring is the foreign exchange (forex) or currency market
, forex trading, which is the highest volume market in the world.
(Throughout, I will also be using the pronoun 'he,' but ladies this information applies equally to you as well!)
The single most important thing that a wealthy and successful currency trader needs is his confidence. It is this intuitive confidence that will allow him to continually and reliably reap great rewards from the forex markets.
The way that I use the word 'confidence' above is different than the way the word is used in everyday conversation. For the currency trader, I mean that he is always calm and collected, he has completely divorced any and all emotion from his trading activity, he feels good about every trade he makes and he is supremely confident in his decision-making abilities.
The ability to divorce his emotions from his trading is of the utmost importance, and this is a learned skill that comes from experience trading demo and live accounts over time.
The wealthy currency trader has a highly developed intuitive sense; in terms of his trading, this means that in his mind he is able to visualize and conceptualize the value of different world currencies in his mind, and he can see how his trades should play out before he enters them.
The major world currencies that he is concerned with are:
United States Dollar - USD, British Pound - GBP, Swiss Franc - CHF, Euro - EUR, Canadian Dollar - CAD, Australian Dollar - AUD, New Zealand Dollar - NZD
(Forex Trading)
By examining certain important economic indicators for a specific country's currency, he uses his intuitive sense to create an instinctual or gut feeling of what the value of that currency should be.
He relies much more on his mind and his instinctual feelings rather than on overly complicated charts or indicators.
The wealthy currency trader does not like to lose money, though he does realize that losing trades are to be expected because of the inherent risk of the forex market, and when he does lose money he does not get emotional about it.
Because he does not like to lose money, he is not a fan of pure technical analysis probability trading. The idea behind a purely technical based strategy is that you will have lots of winning and losing trades, but over time there will be a greater volume of winning trades than losing ones.
This does not work for the wealthy currency trader, because he would much rather have winning trades all the time. It is for this reason that he uses much trepidation in his decisions about when to place a trade, and he knows that the best times to place sure-fire winning trades is around the time of economic indicator releases.
The wealthy currency trader knows that there are around 30-50 economic indicators released every month that have a significant impact on the exchange rates of major world currencies. He also knows that immediately prior to the release of this indicator, the market has already factored in the estimated value that the indicator SHOULD be released at. This means that if the figure of the indicator differs significantly from expectations, this is a potential trading opportunity and will usually play out to be a winning trade.
Though his trading strategy is mostly fundamental-based (studying the underlying economics rather than just the numbers), he respects technical analysis because it plays an important role in autotrading.
Forex autotrading systems are becoming more and more commonplace, and even though the wealthy currency trader does not frequently use advanced technical analysis in his own trading decisions, he took many professional trading courses and has a vast knowledge of the applications of different indicators.
The wealthy currency trader has a mind like a sponge, and all of the information he has learned about technical trading shines through in the profitability of his autotrading systems.
He has an understanding and respect for the power of leverage. Leverage is a way of trading about 100x more than the actual capital in the trading account, and he sees this as a very powerful tool and treats it as such. With a powerful tool, it is possible to build something grand and monumental, but it is much easier to use this same tool to destroy it.
Lastly, the wealthy currency trader treats the forex market as nothing more than a business. Just as he does not combine business and pleasure in his social life, he does not combine emotions with his trading. In his mind, he is able to block out the currency symbol next to his account balance, and he sees only a number. If it goes up, great; if it goes down; great.
Going full circle, he is able to keep emotions out of his trading because the supreme confidence in his decision-making skills allow him to rest assured that in the end he will always come out on top.
By: Article Directory: http://www.articledashboard.com
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