Let's begin with determining the very concept of a 'professional Forex trader.'
First of all, it might be someone who is paid regular salary for working hours at an office of a bank, a company, a trust fund, or an investment firm, just like any other person with a day job.
These people are called hired traders – their job is to manage funds of other persons, not their own, and to bring profits to their portfolio, not their wallets.
Of course, they are professional traders, because they are paid a professional Forex trading salary.
There is also another type of a professional trader – someone who trades for a living and might or might not be employed somewhere else. We will call these persons 'private traders.'
Quite often, such traders have worked as hired traders in the past or are striving to build up a track record in order to get such a job. There's no mistake in calling private traders professional traders, but the word 'professional' here refers to the trader's approach, not his CV entry. That is to say that a private trader hires himself.
The amounts of professional Forex trader income can be very different in both cases. Anyway, what is certain is that a Forex trader denotes a person who trades regularly and with profits.
So what does it take to become a professional Forex trader? Actually it starts with setting efficient routines.
By saying 'routine' we mean habits that save you time and effort. Routine here is less of a chore and more of positive and helpful set of rules, despite the generally accepted negative connotation of the word.
This is an interesting fact, but people who are not forced to choose what they eat for breakfast every morning get less tired by afternoon. It's a routine what rescues you from regular reconsidering of what should be done – you can think of it just once. Making decisions all the time is a hard work for the brain – just remember your college exams.
So, both in life and in trading, great results come with saved resources and optimised performance.
Thus, the morning of a professional Forex trader should start just like that of any other human being who wants to be effective during the day: get up well rested, move your body, eat a healthy breakfast and get to work.
As a rule, professional Forex traders get up early. Human biorhythms are in fact connected to the sun movements; aligning with them will have a good effect on your health and trading.
Apropos of health, in order to be able to make sound decisions and conduct analysis, your brain needs to be fit. It requires lots of oxygen, so it's advised to start the day with morning exercise. Get your blood flowing with whatever you like – jogging, cycling, workout. Even a five-minute daily exercise is good for your blood circulation and oxygen supply that enhance brain performance, not to mention decreasing of a heart attack chances after 40.
Next, you need to have a balanced breakfast. About 40% of the energy from what you eat goes to your brain. Needless to say you will not be able to trade productively without a good meal in the morning.
So, the morning routine is very important part of the life of a Forex trader because it sets a tone for the rest of the working day.
The most obvious way to define investors in professional Forex trading is by the timeframes they trade.
Position trading is a long-term investing, with trades kept open over months or years, as a rule. Position traders tend to analyse daily timeframes; anything lower than that is deemed irrelevant market noise for them.
Swing traders keep their trades open for a shorter period than position traders – usually days or weeks. They favour daily and 4H timeframes. An hourly time frame might be used by them for finding areas of price action, but they are not the basic trading interval.
Next are day traders, who only execute trades within a single day session. They rarely keep open trades overnight because abandoning the charts for extended time periods is against their money management rules. Intraday traders believe this is too risky.
And then there are scalpers. They only pursue trading within the shortest time periods. As a rule, 15 minutes is their longest time span for a trade.
Being aware of which timeframe suits you the most matters because it outlines how often you should be checking your trading charts updates.
It might be difficult for rookie traders at the beginning not to monitor price charts all the time. However, by endlessly counting pips and over-analysing you will get mentally tired very quickly. Expert traders usually restrict their exposure to the market consciously. There is this famous quote by one of the star traders of our generation, Anton Kreil, who said that "If you watch every tick you will trade like a d*ck." That's a good piece of advice, actually.
But how is it possible to restrict this exposure? Firstly, limit the number of markets you want to follow. For instance, only watch currency pairs that are the most traded when you are awake. Second trick is to know exactly what you are searching for on a chart.
In order to boost your Forex trading to a professional level, consider the following steps to start with:
As a rule, higher time frames attract more traders than lower ones. This is explained by smaller quantity of signals that have to be interpreted, less market noise, and less time spent near your computer. All of this, in its turn, might lead to higher probability trades.
The irony of the situation is that many people want to become traders in order to have more free time. However, they often tend to end up sticking to the screen and watching their charts for entire 40 hours per week.
But no worries, this is not what currency trader life looks like. This is not life at all, while we're at it. In reality, professionals leave the work to the market and spend their time on rest and recovery for optimisation of later performance.
As a rule, long-term traders begin with order maintenance. This means checking active trades' performance. Traders apply overnight market developments to stop losses adjustment or taking of profit order.
Usually, investors who trade overnight are either swing or positional traders. It does not make sense for them to return to market data for a checkup more often than once in four hours or even a day.
If there were trades that closed overnight, an expert trader will note it in his trading journal and analyse profit or loss.
In general, the habit of keeping trading journal updates is what makes a trader more of a professional. It also facilitates the trader's assessment of his performance and strategy, which is better achieved if trades are viewed in batches, not as individual transactions. In addition, this practice offers a wider view of profits and losses to the trader.
In order to become a professional Forex trader faster, carry out long-term trades. One of the advantages to this approach is that you can check price charts whenever convenient, which offers you greater time flexibility.
On the other hand, day traders and scalpers are forced to watch their price charts more carefully. As long as they trade within quite small time frames, even the slightest change in price might affect the result of a trade.
The trick here is to know when exactly you need to be actually involved with the market. Whenever this is not needed, train yourself to stay away from the markets. Most of seasoned traders know how to do that, so put some effort into developing this skill, too.
The same skill also prevents professional traders from chasing the market. At the end of the trading time seasoned investors retire for the day. They might conduct some minor trading research while resting, but they definitely do not stare at their price charts after active trading is over.
It is a great rule among professional traders to spend the rest of the day caring for themselves and staying healthy and happy. Being in good physical and emotional shape will allow them resuming trading as soon as they need to.
In conclusion, now you know that the life of a currency trader is a number of routines aimed at supporting his effective habits that help conserve resources and increase performance. The following ideas might be helpful to remember and implement in order to become a professional trader: