What is Professional Forex Trading?

profitable tradingProfessional Forex traders are those traders who analyze price movement in the Forex market in order to make a profit. The main goal of every trader is to put his/herself into best possible situation where winning percentage is at its maximum, giving the trader the opportunity to maximize their profits. A professional forex trader is chart analysis, by analyzing the chart he or she will makes trades in the market. You need to have in mind that Forex trading is all about statistics and playing the odds, a professional traders always need to have an edge in order to put the odds in theirs favor to succeed in the trade.

The key for success is not to have winning trades, but more like capital preservation you need to cut down your losing trades as soon as possible you don’t need to have large loses, by doing so your winning traders will outpace your losers. You need to have in mind that losing traders are just a part of the game and you need to understand that you must cut your loses with small loss relative to your winners. You always need a stop loss and you need always need to calculate your loss at the beginning and to be comfortable with it.

A professional Forex trader has powerful skill at his or her disposal, professionals can read the chart and to predict with high probability what the markets is about to do next. This is highly flexible and dynamic trading strategy to trade the markets with a high-probability edge. You always need to put yourself in the best trading opportunity.

So how do pro traders trade the Forex markets?

As we speak for forex market may be there is a million or more strategies – the more winning traders, the more winning strategies, but the main thing that is in common is that those strategies are not overly-complicated and are not based solely on lagging indicators. A professional trader mainly is using the raw price data of the market to make their analysis and predictions, but in the following rows I want to show you primary different styles and ways people trade the Forex market:

  • Automated or Robot Trading – Software-based systems or Forex trading robots as they are mainly known are based on strict set of trading rules into code that a computer can make use of. The computer will then run this code via trading software that scans the markets for trades that meet the requirements of the trading rules contained in the code, so this give the trades the opportunity to executed trades automatically via the trader’s broker.
  • Discretionary Trading – Discretionary Forex trading is based solely on traders trading skills and decisions. Discretionary trading allows for a more flexible approach than automated trading but it takes certain devotion and amount of time to develop your discretionary trading skill. Most professional Forex traders are discretionary traders because they understand the market is a dynamic and constantly flowing entity that is best traded by the human mind.
  • Technical Trading – Technical trading, or technical analysis, is form of analysis based on market’s price chart, giving an edge for making one’s trading decisions. Technical analysis traders use price patterns or ‘technical signals’ to trade the market with an edge. All technical analysis believe that all economic variables are represented by and factored into the price movement on a price chart and there is no need to stay constantly and reading all kind of market news.
  • Fundamental Trading – If you of those guys who have MBA or have huge desire in analyzing tons of economic, financial, political and so on news or events, then the Fundamental trading is for you. This is news trading based trading, is a trading technique wherein traders rely heavily on market news to make their trading analysis and predictions. Fundamental news does ‘drive’ price movement, but many times the market will do exactly the opposite than what a particular news release would imply. It is based on the fact market players buys the expectations of future events and sells once the event occurs. As I told you technicians believe that price discounts any news and this is the main reason that many pro traders rely more heavily on technical analysis than fundamental analysis, although many do use a combination of the two.
  • DayTrading Traders who day-trade forex are in and out of the market inside of one day. What this means is they typically buy and sell currencies over a very short period of time and they may enter and exit numerous trades in a single day.
  • Scalping – Scalping is a lot like day-trading but it depends on more repeated and shorter-term trades compared to even day-trading does. This is a trading style that identifies jumping in and out of the market often daily to ‘scalp’ a few pips here and a few pips there, generally with little regard for putting logical stop-losses. Scalping is generally not advised by experienced traders because it is essentially just gambling.
  • Swing Trading or Position Trading – This kind of trading involves going for a short to mid-term view on the market and traders who swing trade come in a trade anywhere from a few hours a number of days or weeks. Swing or position traders are generally seeking to trade with the near-term daily chart momentum and frequently enter between 2 to 10 trades each month, generally.
  • Range Trading – Range trading requires trading a market which is consolidating between obvious support and resistance levels. By watching for trading signals close to the support and resistance boundaries from the trading range, traders have a high-probability entry scenario with obvious risk and reward placement.
  • Trend Trading – Trend traders are traders who wait for a market to trend then trend traderstake advantage of this high-probability movement by seeking entries inside the trend. An uptrend is considered to be in position whenever a market is making higher highs and higher lows, along with a downtrend is in place when a market is making lower highs and lower lows. By looking for entries in just a trending market, traders have the best chance at getting a large revenue on their own risk. Traders, who regularly try to trade against the trend by trying to pick the top and bottom of the market, generally lose money quite easily. Professional Fx traders are largely trend-traders.
  • Counter-trend Trading – Trends have to end at some point, so if you’re a savvy and experienced trader you are able to successful trade a counter-trend move, however, this should not be tried until trend-trading is mastered as counter-trend trading is naturally more dangerous than trend-trading and there could be many false tops or bottoms in a trend before the real one emerges.

You need to choose the best trading style that is align to your trading style, you must choose this trading style where you are most comfortable trading it. It is best for you to stay calm and cool-headed when you trade so choose your trading style wisely.

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