Professional forex trader interview

I blew through my first 7 trading accounts, but I only used small deposits. Once I had a functioning trading strategy, I had to build my trading account. This takes time and is often overlooked by new traders. Over the next 8 years I did not make any withdrawals from my account, but rather small monthly deposits in order to get it to the size I needed it to be.

Redactor: What do you think is the biggest mistake new traders make? Jim K: I think there are quite a few, but if I have to pick one then it would have to be their focus on weekly or monthly profits in order to withdraw them. The short-term mindset is definitely an account killer.

Redactor: How did you know that you were ready to quit your job and become a Professional Forex Trader? Jim K: Three things were important for me: 1. I learned to trust my trading strategy which took almost a decade of live trading.

I had enough cash on the side to survive another 2 years. This was my security blanket. Redactor: Do you have a book or a movie which you recommend to traders? Redactor: Thank you again for your time. It is always great to have the insight of a forex trader who succeeded so that new traders can learn. Jim K: It was my pleasure. I believe if one trader learns a lesson from this it was a great success.

As you can see from our interview with Jim K, a short-term mindset is one of the biggest mistakes of new traders. If you are wondering about how to become a successful Forex trader start looking into increasing your odds first. What do you do as a professional trader? As a day-trader, I look at the market on daily basis and most of my free time is devoted to the market one way or another.

I would either be looking into Technical Analysis, or share my analysis as a Free Forex Signals, or trading, or talking to my investors about their portfolio or I would look into how to optimize my trading strategy. But what I like about trading is the Freedom that I have.

I can trade from anywhere in the world. I can trade from my phone or tablet, although I do not recommend trading from phone nor tablet. I can go to a tropical fancy island even right now. First of all, I have flexibility and trading pays of. How do you trade Forex with mobile? How do you maintain your focus when you are distracted by so many outside factors?

First of all I don't risk too much when I use my phone to trade Forex. I know that even if I lose the amount of loss would not be substantial. It all comes to controlling what you can. If you can control your Greed, you can control your loss. Additionally my mobile trading strategy is really simple.

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Once I had a functioning trading strategy, I had to build my trading account. This takes time and is often overlooked by new traders. Over the next 8 years I did not make any withdrawals from my account, but rather small monthly deposits in order to get it to the size I needed it to be. Redactor: What do you think is the biggest mistake new traders make? Jim K: I think there are quite a few, but if I have to pick one then it would have to be their focus on weekly or monthly profits in order to withdraw them.

The short-term mindset is definitely an account killer. Redactor: How did you know that you were ready to quit your job and become a Professional Forex Trader? Jim K: Three things were important for me: 1. I learned to trust my trading strategy which took almost a decade of live trading. I had enough cash on the side to survive another 2 years.

This was my security blanket. Redactor: Do you have a book or a movie which you recommend to traders? Redactor: Thank you again for your time. It is always great to have the insight of a forex trader who succeeded so that new traders can learn. Jim K: It was my pleasure. I believe if one trader learns a lesson from this it was a great success.

As you can see from our interview with Jim K, a short-term mindset is one of the biggest mistakes of new traders. Jim K spent over 12 years to get himself ready to become a Professional Forex Trader. Liquidity - Since there is so much activity, the global forex markets provide substantial liquidity to traders.

While certain assets may be more difficult to buy and sell, traders interested in currencies will likely find substantial opportunities. Liquidity risk can occur around major news events if liquidity providers seek to limit their exposure to market volatility.

Leverage: Investors can potentially access far more leverage when trading currencies than they can when trading other assets. However, it is important to keep in mind that risk is inherent to investment. While using leverage to make larger trades can amplify returns, it can also amplify the size of losses.

Global Exposure: Forex trading provides investors with an opportunity to obtain exposure to economies across the world. By taking a more international approach, traders might diversify more successfully or potentially achieve higher returns by putting their money to work in areas that have greater potential.

Once again, risk is inherent to investment, so no returns are guaranteed and investors must conduct their due diligence on regions. Low Trading Expenses: Because there are so many buyers and sellers, spreads are low and trading costs are modest. Indeed forex trading involves risk. The currency markets do experience sharp fluctuations, just like the stock, bond or commodity markets.

Liquidity risk can increase around major news events. Also there are some unscrupulous brokers out there. Due to which investors can benefit from performing substantial due diligence on any company they might work with. For instance they could trade the euro without owning it by buying or selling options that involve the currency. Additionally purchasing spot contracts or forward contracts involving currency of choice would also provide exposure.

When making trades, big banks employ professionals who may have significant education and experience. Due to which we can benefit greatly by doing your best to be prepared. When evaluating currency pairs, some traders use fundamental analysis, which involves analysing economic fundamentals in different countries. When using this technique, investors might look at GDP, inflation and unemployment in the two nations involved in an exchange rate. Another resource traders can use is technical analysis, which require reading charts to get a better sense of the market sentiment surrounding a specific currency pair.

On the other hand some traders may use both fundamental and technical analysis before making any transactions. By doing so, they might be able to increase their chances of competing successfully with big banks. Trading forex on margin carries a risk of losses in excess of the deposited funds and may not be suitable for all investors. Forex Trading is not centralized on an exchange, as with the stock and futures markets. The Forex market is considered an Over the Counter OTC or 'Interbank' market, due to the fact that transactions are conducted between two counterparts over the telephone or via an electronic network.

It is truly a hour market, such that Forex trading begins each day in Sydney, and moves around the globe as the business day begins in each financial center, first to Tokyo, then London, and New York. Such that investors can respond to currency fluctuations caused by economic, social and political events at the time they occur - day or night.

No forex trading is not expensive. Since most online Forex brokers allow customers to execute margin trades at up to leverage. But it is important to remember that while this type of leverage allows investors to maximize their profit potential, the potential for loss is equally great. Also a more pragmatic margin trade for someone new to the Forex markets would be but ultimately depends on the investor's appetite for risk.

We can consider margin essentially as a collateral for a position. Margin allows traders to take on leveraged positions with a fraction of the equity necessary to fund the trade. In trading a long position is one in which a trader buys a currency at one price and aims to sell it later at a higher price.

In the given scenario, the investor benefits from a rising market. Where on the other hand a short position is one in which the trader sells a currency in anticipation that it will depreciate. In this situation the investor benefits from a declining market. However, it is important to remember that every Forex position requires an investor to go long in one currency and short the other.

Intraday positions are all positions which are opened and closed anytime during normal trading. Overnight positions are positions that are still on at the end of normal trading hours, which are usually rolled over by your Forex broker based on the currencies interest rate differentials to the next day's price. Currency prices are affected by a variety of economic and political conditions, most importantly interest rates, inflation and political stability.

Moreover, governments sometimes participate in the Forex market to influence the value of their currencies, either by flooding the market with their domestic currency in an attempt to lower the price, or conversely buying in order to raise the price. This is known as Central Bank intervention. Any of these factors, as well as large market orders, can cause high volatility in currency prices. However, the size and volume of the Forex market makes it impossible for any one entity to "drive" the market for any length of time.

One of the most common risk management tools in Forex trading are the limit order and the stop loss order. A limit order places restriction on the maximum price to be paid or the minimum price to be received. Where a stop loss order ensures a particular position is automatically liquidated at a predetermined price in order to limit potential losses should the market move against an investor's position.

The liquidity of the Forex market ensures that limit order and stop loss orders can be easily executed. All currency traders make decisions using both technical factors and economic fundamentals. All the technical traders use charts, trend lines, support and resistance levels, and numerous patterns and mathematical analyses to identify trading opportunities, whereas fundamentalists predict price movements by interpreting a wide variety of economic information, including news, government-issued indicators and reports, and even rumour.

The most dramatic price movements however, occur when unexpected events happen. The event can range from a Central Bank raising domestic interest rates to the outcome of a political election or even an act of war. Nonetheless, more often it is the expectation of an event that drives the market rather than the event itself.

The number of trades depend on the market condition where market conditions dictate trading activity on any given day. As a reference, the average small to medium trader might trade as often as 10 times a day. Most importantly, since most Forex Brokers do not charge commission, traders can take positions as often as necessary without worrying about excessive transaction costs. General rule says that a position is kept open until one of the following event occurs - 1. Realization of sufficient profits from a position.

Specified stop-loss is triggered.