A question for the ages

This question has many answers but one of them isn’t easily

The Foreign Exchange market has an almost infinite number of drivers. You but one currency against another, let’s say the Euro versus the dollar. The Euro appreciates, you make money. The dollar depreciates you make money. The Euro appreciates you think “this is good, I will hang on. The Euro then depreciates and you lose what you made and some of your capital.

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Trading FX gives you a number of opportunities to make as well as lose money. Scalping means taking advantage of very short term moves in the market. Positions are rarely held for longer than three minutes. This is very labour intensive. At the other end of the scale is long term positioning. This is not labour intensive but involves patience. This method means that the background noise of day to day moves are filtered out and you rely on the long term trend of a currency.

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Novice traders need to develop a trading style and methodology that suits their personality. Laid back people rarely make good scalpers and those with a more hyperactive personality lack the patience to wait for profits from long term positioning.

In the middle of scalpers and long term traders sits day traders. They have some patience but usually have a plan and need to see it moving forward. Day traders tend to be the most technically proficient. Using a multitude of signals to enable them to “read the market”. They tend not to “jump in” but are considered when taking a position. They know the difference between an SMA and an EMA when it comes to what the signal means.

What are the basic requirements; both physical and mental

Capital: You will need to have free funds that you are prepared to risk in a controlled manner

A Broker: Check out Comparic.com to get the latest guidance on what brokers are offering in the way of bonuses. Theses are not the only factor in choosing a broker but they are nice to have. Brokers need to be properly vetted to make sure you are comfortable.

A computer with internet access: You can trade on a tablet or even on your phone. But for the analytical stuff you will need to do a laptop is really the minimum hardware requirement. Once you are confident and understand the levels, a tablet will suffice.

All tradesmen have a workshop. You will be no difference. The tool that you will require are analytical and investment. As with any new endeavour a lot of reading is necessary.  Once you have the basics building up what is most useful to you and your style becomes easier.

Finally, there are three subjective requirements that no successful trader can be without: Knowledge, experience and luck.

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