The Mindset of The Successful Currency Trader

Let me begin by saying that if you want to get into forex or currency trading online, DO NOT begin by buying a guide or a training course.

Too many low-life's out there pander to the uninformed by selling them overpriced guides and manuals, sometimes for a few thousand dollars each.

A forex mentoring course can be a good option once you know the basics of forex and want to hone your skills, but there is just so much good information available on the internet for free that you could literally become an all-star trader without paying anything for education.

Today we are going to talk about the way you need to think if you want to be a profitable forex trader.

I consider myself to be pretty profitable when it comes to forex trading, and my first banking internship on the Foreign Exchange floor was when I was 16! (I was the youngest intern they ever had!) I got hooked on trading, and have been doing it ever since.

One thing that is really necessary to your success is to READ. Alot! The more you know about forex trading, the easier (and more profitable) it will be.

You want to know the mechanics of the forex markets from the inside-out. I'm not going to spend time discussing the practical aspects of the forex market, as you can and should discover this though your own reading.

When you begin to get comfortable with your knowledge of what this market is, how it works, and how to place successful trades, you are in a position where you can feel confident in your trading abilities.

The most important thing that the successful currency trader possess is the ability to separate his emotions from his trading. Confidence in your trading abilities is one important aspect to being emotionally detached from your trades, and the other aspect has to do with the way you fund your live trading account.

Make sure that when you put money into your live forex account, it is extra money that you do not need to survive and could afford to lose. If you are trading with the money that you need to pay your car insurance, your trading will be highly emotional and likely to fail.

In a way, this is kind of ironic, because I'm sure you've heard the saying that 9 out of 10 of new traders fail. Well, traders that CARE and are highly emotional about growing their forex account are the ones that lose their shirts, when the traders that DON'T CARE and have no emotional attachment to their trading make most of the profit.

That's the irony: The less you care about making money in the forex market, the more money you tend to make!

But also realize that you are not 'not caring' out of negligence (pardon the double negative), but rather because you are so confident in your trading abilities that you KNOW that in the long run you will always win.

To the successful currency trader, trading is not so much about making money as it is about collecting pips in their trading account!

Profitable forex trader's also tend to develop and follow their own trading systems. Finding or creating a certain system and trading within it is also important to successful trading.

My personal trading strategy that I have developed is something that I call Forex Surfing, and you can read more about it on my site, http://TheForexSurfer.com

There is also a large collection of free forex ebooks and trading resources at my site as well, just click 'free reports' or 'free resources' at the top!

Five Steps To Trading For A Living

For the past five years my sole source of income has been profits made from trading on the forex market. Over that time period, many people, perhaps somewhat envious of my ability to earn money from home without having to report to a boss, have asked me what it takes to trade for a living. How can one arrive at a point where one feels confident enough to leave ones regular employment, strike off on ones own with no guarantee of a regular paycheck, and put what might conceivably be ones entire savings up to that point at risk in the markets?

While I unfortunately cant actually give you confidence in your ability to make it on your own, nor the stomach to risk your hard earned savings, I can tell you the practical steps that I took to get where I am today. These steps do not include the obvious ¨learn of the existence of the forex market¨, as presumably you already know something about forex trading, or you wouldnt be reading this article.

Furthermore, while these steps have been applicable to trading the forex market in my case, one could easily apply the same principles to becoming a professional trader in the equities markets, derivative markets, etc.

Step 1) Start saving your money.

To trade professionally you need a bankroll, and one that is large enough to withstand the ups and downs that are a natural part of trading. For me, this was easy. I had been putting money aside ever since I started working. Those like me that have been raised to understand and appreciate the value of saving, will accomplish this quite naturally. However, if you are a habitual spender and are accustomed to living paycheck to paycheck without putting anything extra aside, be prepared to expend some serious effort curbing your habits and learning to save instead of spend. How much money will you need? Unfortunately I cant answer that specifically because it will depend on the trading strategy that you use, the amount of leverage you plan on trading with, and the amount of money that you need to take out in profits. You should count on having a bare minimum though, of a full six months salary saved up before beginning full time trading. One years salary would be still better. Keep in mind that the larger your bankroll, the more money you can earn without risking an unnecessarily large percentage of your bankroll.

Step 2) Get an education.

You cant start trading before you know something about the market you are trading in. This education does not have to be formal (as in University classes), and you do not have to understand economic forces as well as Alan Greenspan prior to getting started. You should, however, have a basic understanding of why the market that you are trading in exists, how buying and selling on that market works, and the strategy that you are going to employ to take your profits out of the market. There are a lot of totally free resources on the internet that are worth your time to read (and there are a lot of opinions and ideas that are NOT worth your time, but reading some of those that are not worthwhile is part of the process of developing discernment about what is and is not a good resource).

There are also some inexpensive trading courses on the internet that are useful. Part of the education process is coming up with a trading strategy that you are comfortable with, as well as a money management strategy to ensure the long term viability of the trading strategy. There are many good trading strategies out there, but regardless of which one you choose, you must understand that the traders that are successful cut their losses early and let their winning trades run. This can be somewhat more difficult than it sounds, but is really the key to making money trading.

Step 3) Sign up for a demo trading account and start practicing while you are not at your regular job (or, if you have free time and internet access at your job, WHILE you are at your regular job).

We list some good forex brokers at forex-rates, so if you are planning to trade currencies, be sure and sign up for a demo account with one of the listed brokers. In order to get a real feel for the trading strategy that you have chosen, you will have to do a lot of practice, so take your time with this step. Dont start trading with real money until you have an actual history of successful demo trading

Step 4) If you are making money trading on paper and are comfortable with your trading strategy, go ahead and get started trading for real on a part time basis. Don't include all of your savings as part of your trading bankroll yet. Start slowly and gain a comfort level. As your confidence builds, move money from your savings to increase the size of your bankroll.

Step 5) When you can estimate that your average gains from real trading (from step 4) are at a level where, if you were to trade full time using your current bankroll, you would be making profits that slightly exceed your current employment salary, you are ready to quit your job and trade full time. Remember, you want your trading profits to exceed your present salary. This will give you the opportunity to maintain your current financial level, but at the same time continue to increase your trading bankroll, which will enable you to earn more and more money as the size of your available funds grows larger.

It is important to have patience with yourself at each of the steps mentioned. Maintain emotional equanimity and understand that fear and greed are a traders most dangerous nemesis. If you can keep these emotions under control and maintain the discipline established while following these steps, you can look forward to making it as a professional trader.

Samuel Garcia is a full time forex trader based in San Jose, Costa Rica. He considers that being a successful trader is 90% due to proper money management and emotional discipline, rather than the trading strategy employed. Visit www.forex-rates.biz

Factors That Impact the Forex Market

(by Mark Crisp)

Perhaps the single most common influence on the daily market is that of economics within a given country. One factor that can really make a difference in how well a nation's currency will trade, has to do with the amount of the deficit currently held by the current government. Sudden jumps in the deficit will result in the currency falling in exchange with other countries. As the government reduces the deficit, the currency will begin to recover and actually rise in the rate of exchange.

Along with the budget deficit, a trade deficit can also impact the rate of exchange. Simply put, if a country is not doing at least as much exporting of goods and services as it is importing, a deficit arises. This is a clear economic indicator that will have a negative impact on the value of the country's currency.

Internal inflation or recession will also make a difference in the way the currency of a given country is valued. Inflation in particular has the ability to cause currency to lose value. As a country enters into a period where inflation is rampant, the desirability of the currency will fall, as it is perceived as being less stable overall. Because inflation lessens the purchasing power of a country internally, it is also seen as being a deficit in the ability to purchase goods and services from other countries. As inflation is reined in and periods of mild recession come into play, the value of the currency will once again rise in comparison to other countries.

As with all facets of life, politics also can have a good effect on currency exchange rates, or it can bottom them out. Changes in government personnel that are viewed in a negative light will very quickly reflect a devaluing of the country's currency. The same is true when the current government makes decisions that are perceived as not being in the best interests of the world community. At the same time, an election that puts in office persons, who are esteemed to be favorable by the world community, can very quickly raise the value of that country's currency, at least as long as those officials maintain their favorable status.

The fact of the matter is that quite a few factors that have to do with trading and the overall financial picture of a country will make a huge difference in how the country's currency will fare on any given day. Some factors may result in only temporary upward or downward trends, while others will be more long term in effect. One thing is for sure: the Forex market is never boring.

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