Forex trader is a person, who carries out currency transactions with the intent to make profit from exchange rate movements. You need to learn how to forecast currency moves in the financial markets in order to become a successful member of the profession. To do it, it is not necessary to study at an institute, receive a diploma and get a job. Basic knowledge could be gained by self-education and gradual development of your own skills.
Why the profession of Forex trader is so attractive?
Trader is a person, who can make money out of money. Example: We had $1000 yesterday → Trader → We’ll have $1500 tomorrow
A trader has a minimum of professional duties:
Chart analysis, looking for and conducting trades;
Making some coffee and monitoring financial markets.
Trading in the financial markets requires that you have PC, Internet connection and special software (trading terminal), which provides access to the markets.
Trader is not location-dependent and can carry out activities from anywhere in the world: House, Café, Spain, Park, and Air-plane.
The Forex market operates 24 hours a day that enables a trader to plan a work schedule at own discretion. The work can last several hours a day only or it can represent 24 hours of monitoring the market dynamics (it depends on a trading strategy).
Traders can be classified into several groups by their style of trading:
Long-term investor: one trade has a duration of at least 1 year
Short-term investor: an investor makes several trades per year
Position trader: one trade has a duration of no less than 1 day
Day trader: all trades are made within one day
Scalper: One trade takes several minutes to be completed
Trader can provide the following services as additional earnings:
Discretionary trader is a person, who trade at own discretion and on owned funds.
Amateur traders learned the profession at their sole discretion and think of trading as a supplement to their main job. Their key targets are as follows: profit-making; entertainment (trading as a game of chance); creation of information products (books, videos, Forex courses).
Professional traders received education and chose trading as their main job. Their key and sole target is profit-making.
Benefits of discretionary trading:
focus on trading to the maximum;
any strategies and experiments are allowable;
the lack of responsibility against other subjects;
opportunity to go off on a vacation at any time you like 😉
A major shortcoming of the discretionary trading is that you need a very solid practical experience (more than three years) to start making profit in the Forex market.
Who is a signal provider?
Signal provider is a trader, who generates additional profit by demonstrating trades made on the basis of his or her trading strategy to other users. Specialized platforms, like MyDigiTrade Copy Trading Platform, allow doing it.
To become a signal provider, you need to have a practical experience of trading in the Forex market and accumulate a history of trades. Traders, which strategy yield 5-15% profit a month over 6 months and more, usually become successful signal providers. The better are the signals provided by a trader, the more subscribers are there in his or her subscriber database, and, of course, the higher is the profit. As a rule, signal providers receive a reward in the form of a flat subscription fee or a part of brokerage fee charged on every trade.
Who is an asset manager?
Asset manager is a professional trader, who manages investors’ money (both individual persons and companies can act as clients). Such a trader can create own private pool of investors (friends or acquaintances) or work under an employment contract in some financial organization (fund). As a rule, asset manager receives a percentage of earned profit as a reward. If a trader establishes own hedge fund and successfully manages it in the future, it can be regarded as a peak of career.
What is a shortcoming of the profession?
A relatively small number of traders succeed to make consistent profits from the market. According to various sources about 10% of traders earn money regularly. As a rule, it is due to a severe psychological stress experienced by a trader as a result of making trades in the financial markets.
Now you have got to know, who is a trader, and what he does. What do you think of the profession? Share your thoughts in the comments below.