Forex trading is straightforward enough, but earning money with it is another matter. Many of us start with big dreams only to suffer with a resounding crash. Here are ten essentials that you have to have if you’d like to become a successful foreign exchange trader. They especially apply to you if you’re using forex trading systems like USDBOT.  

1. Realism

You must be hard-headed about your goals if you’re going to hang on to any profits that you make. Forget about making great sums of money in a short time : that is only possible if you take gigantic risks , that will see your profits wiped out as quickly as they were made. Aim for a realistic profit goal and keep your trades miniscule while you are learning.

2. Training

No-one was born a successful forex trader, we all have to learn. Search out good strong coaching in the basics of trading, including analyzing the market, risk management and psychological aspects. Training comes in numerous forms and at many prices from free to thousands of greenbacks. Price and quality aren’t necessarily closely related. Having mentioned that, do not expect to get everything freely.

3. Support

There is nothing wrong with asking for help when you want it. Just be certain you ask someone that can really help you, and not a confused newb who likes to hang around in forums.

4. Good Trading Practices

Everyone appears to be hunting for the perfect system, but there is no such thing. Systems don’t work independently of our trading practices. If you have a sound plan, particularly concerning risk management, stop losses and profit targets, you can make money with any profitable system.

5. Discipline

But having a sound plan and a good system isn’t the whole story. You also need to develop trading discipline to apply your scheme and your system. Making inconsistent calls or acting on the spur of the moment is a recipe for disaster in currency exchange trading.

6. Patience

You may have to wait around a bit for conditions to be ideal for you to open a trade. It is very alluring to jump in on something that looks good but does not fit your system. Develop patience so that you can avoid those random trades.

7. Stop Losses

Knowing the simple way to cut your losses at the right moment is important. Never hang on to a losing trade beyond a certain point which should be figured out before the trade is opened. It’s a delicate matter finding the balance between having a stop loss that’s caused by tiny fluctuations, and holding onto your trades for so long that you make a massive loss. It will change for each system, so be sure you get this right before you start trading a new system in reality.

8. Impassivity

It is important to remain calm under stress, because there’ll be lots of that. Do not allow your trading to be motivated by fear, panic or dreams of massive profits.

9. Realism

Forget what you will see in adverts about doubling your money each month. A profit target of between five and 10% a month is an excellent return on any investment, and will keep you out of the most risky situations.

10. Records

Finally, keep records of all your trades. Yes it is tedious, but if your trading records are in depth they can allow you to take back control whenever things seem to be going wrong. Having results to investigate gives you a massive advantage in foreign exchange trading.

There is a really wide choice of currency broker corporations online and when you are starting out in foreign exchange trading it can be difficult to find the best. We tend to be drawn to advertising, assuming they’re all working in the same way. Actually this isn’t true. Currency exchange brokers have extremely different business models which affect the way that they operate. In a number of cases, you may be surprised to hear that they may be working against their clientele instead of for them.  

Naturally historically a broker carries out his clients’ instructions, placing orders for them in the market. Originally brokers worked with telephone orders and simply placed the order for the best price that they could get through their dealing desk. Nowadays, everything is done online so that clients put in their orders for a certain price . However, you do still need a broker who will connect to the market thru their software platform.

Many brokers still work in the old way, placing orders for clients as they’re instructed. These are frequently the brokers who run standard forex accounts with minimum investment of $10,000 and upward. But the internet has opened up foreign exchange trading to people with much lower investment funds. More recently, firms have come on the scene to cater for these smaller investors and they do not always follow the pattern of normal brokers. To cut costs, they customarily do not have their own dealing desks and they may operate in some very different ways . This could have crucial consequences for your funds and how they’re managed.

So let’s take a look at the kinds of business model that you can come across in your search for a currency broker.

No Dealing Desk (NDD) Currency Brokers

NDD brokers work in a similar way to brokers with dealing desks, but they use a selection of liquidity providers to actually match their clients’ orders in the market. Competition between liquidity suppliers keeps the spread low, although the broker usually increases the spread to cover their own costs and earn a little cash.

Electronic Communications Network (ECN)

Foreign exchange brokers who use the ECN can access a web network where trades are filled. Many market makers work this way, as well as some brokers, banks and other large currency traders. Spread is usually low but you could be invoiced per trade.

Market Makers

Market makers are not brokers in the real sense because instead of placing your order in the market they will match it themselves and then cover themselves against any loss by taking a position in the ECN or market that offsets their dedication to you either partly or fully. Market makers set their own prices, though of course these will be related to market costs. They regularly don’t like clients to use scalping techniques as the extremely short term nature of these trades makes it harder for them to offset their risk. Some traders are pleased to use market makers but others consider that they’ve a conflict of interest that might work against you as a trader.

Bucket Shops

Foreign exchange bucket shops are like bet takers in that they simply match your trade without necessarily taking any position in the market. They might not have any connection into the genuine foreign exchange market. They win if you lose, so if you are successful they may probably close your account and return your funds. There’s really no point in getting concerned with a bucket shop unless you just want experience at very low levels of investment, and plan to lose money. They are not legal in some jurisdictions, and do not should be called a currency broker.