Who is a Forex trader?
A Forex trader is someone who has a job in a financial institution, who gets paid for managing the investments and funds of others and add to the profits of his/ her respective clients. The Forex traders receive professional Forex trading salaries and are fundamentally ‘hired’ traders. So, a successful Forex trader is one who has learned to trade profitably, thereby increase the earnings of his financial clients and is able to satisfy them consistently.
Types of Forex traders:
A professional Forex trader is someone who knows his/ her trading and these hired professional traders are known by the timeframes they trade. They can be classified as
- Position traders who deal with long-term trading and do not get really affected by the short-term swings in the market.
- Swing traders whose timeframes range from a few days to few weeks. The daily timeframe and the market swings in the short-term are something that they keenly analyse and plan their trading accordingly.
- Day traders as the name suggest, take one single trading session at a time and are known for an hourly analysis of the day’s trading trends and market fluctuations.
- Scalpers, their timeframe is very limited and are known to trade within the lowest timeframe possible, sometimes as low as 10-15minutes.
A typical trading day:
Forex trades 24-hours a day and it is essential that a Forex trader is classified as per the timeframes due to the enormous complexity of the market. A trading day begins with turning on the trading screens in one’s system and observe the currency markets. There is always a change overnight, because bookings happen even after the trading day closes.
The day revolves around placing trade orders, and a keen observing of the central bank policies, and major/ minor industrial announcements etc., They also have a financial calendar of the economic releases and the impact that it may have on trading.
Forex professionals watch out for the important indicators which predict and guide them to make a good trading decision. There are the repainting and no repaint indicator which affect the Forex trades distinctly and are again used cautiously.
And the trading ends with a performance review session, on the many ‘hits and misses’ of the trading day.
Overall, it is a high-pressure, tedious work life and demands a lot of self-discipline and focus.