|What Do All the Top Forex Traders Have in Common?|
|Friday, 25 June 2010 06:55|
The foreign exchange market, on a global level, does just that, rooting out profits on the fraction of a dollar that exists in currency exchange. When you thought there were already countless crackpot ways at turning a profit, more seem to sprout up out of no where! This world operates more metaphorically than not, so why shouldn't the hands of most countries be placed stiffly in this metaphorical cookie jar. The real truth to the matter is that why such hands lie there in anticipation of a cookie to appear, it often does with more chocolate chips than were speculated upon reaching forth. The foreign exchange market accounts for trillions of dollars in the way of such magical chocolate chips. So, what do all top Forex traders have in common? They all follow the essential guideline of Forex trading to make sure they aren't played for fools, like impulsive tourists in Vegas. They are after all engaging in a form of gambling called speculation. An amateur doesn't understand all the rules and tricks that allow him to navigate with fluid ease through such a large confederation of international banks. A pro tries to interpret the psychology behind the poker faces and play all the cards right, only taking big risks if it will certainly pay off. Cupidity and impetuosity don't stand a chance in the global market, even if it forms the very linoleum tiling of the stock market.
The global market operates less like a stock market, despite the speculation, and more like a grocery market; the currency conversions are, after all, based on individual over-the-counter transactions and not upon the profits of an entire business. That's where the puppet strings are tangible; with the stock market, buying and selling shares is based upon the imagined value of an entire business and not necessarily upon how well it actually does in fiscal terms. The stock market speculation might as well be a roulette wheel, for the spinning numbers don't actually represent anything other than themselves. Wall Street brokers are really just Vaudevillian entertainers and magicians; somehow through phantom deceptions, a simple sleight-of-hand trick will result in money floating from the pockets of audience members and into their bottomless top hats, vanishing without explanation like a white rabbit. This imagination-filled staple of the economy is very antithetical to the more substantial foreign exchange market.Forex trading involves banks and government absence, which is a good thing if you want the economic stupidity that befalls the U.S. on a repetitive basis to not be replicated on a global scale. You should hope that the U.S. only be treated as a little child with too much allowance that never seems to learn from its own mistakes, and not as an influential peer, or else we'd all be concerned. The exchange operates on a bid/offer spread, like a true auction or EBay, the profits lying literally in the margins. The speculative trade involves what the bank or market maker asks for, providing large margins without the restraint the stock market maintains, and what the buyer or bidder is willing to pay. Larger transactions mean ultimately larger marginal profits to be made, whereas smaller ones have a much smaller gap and involve much less risk. The profits margins are fundamentally the difference between intelligent guesswork and actuality. The closer to actuality the guesswork, various forms of analyses based on such things as political climates, economic patterns and phenomena, weather, world news, is, the more likely the chance of securing maximal profits. The most knowledgeable Forex traders have to be, quite simply put, very knowledgeable. They need to do very extensive research and fact-checking to make sure they don't overshoot the numbers and miss out on potential opportunities.
Research involves a lot of theory and a lot of number crunching. That's why a successful Forex trader works with a team of experts. Economic fluctuations in commerce are based directly upon real-world events. This is where the stock market are based upon panic attacks and cheap thrills, much like your average self-destructive teenage romance. The events that influence world commerce can include anything from delayed flights from the UK; meant interrupted business to a blockade placed on trade (Cuban cigar sales aren't so big in the U.S. as far as the law is concerned, but that's a good show of how politics can affect the global economy and how a type of cigar can be illegal only for its distributional origin in lieu of its contents). These all need to be considered to help understand the general trends that affect money exchange. These conditions, and their respective acknowledgement, can mean more accurate estimates and a great amount of money to be ascertained from such precision-contingent judgment calls.
Top Forex traders also have a sense of self-control. That's what separates them from the one's that run wild on Wall Street. They must maintain a strict policy of wise money management and purchasing if only there is a guaranteed higher resale value. Investing in less risky investments is wisest, as greed is never a characteristic of a truly successful trader. The idea is not to run to the pecuniary end without leaving a trail of breadcrumbs and to use a map to recognize overt landmarks and safely navigate the forest.
A successful Forex trader also knows who and who not to work with. There is a definite level of precaution that exists in every part of successful Forex trading. For one thing, a broker must only be hired if he meets the required standards. A good broker doesn't take a large commission, operates very quickly, offers up-to-the-minute quotes, has an observable amount of experience in the field, works for a reputed business, and is able to work within specified guidelines. A good broker, essentially, works in your best interest and only minimally for his own. As part of a Forex trader's brain trust, he must be just as valuable an asset as the rest, which includes the ones being bid on. Not just any layman can just up and walk into Forex trading; it requires an ability to speak the abstruse language and walk the walk with a strong level of self-confidence and self-discipline. A knowledge of diverse matter is a prerequisite, or else great management skills over a group of individuals that can provide the appropriate wherewithal. Economical and mathematical expertise is required when it comes to technical fiscal matters as compiling charts, extensive supply/demand spreadsheets, and interpreting trends on diagrams. These form the bases for the most accurate speculation, but not alone. The stock market, as it relates to this matter, will be influenced but sheerly due to the negative press and shock value of the situation. BP's stock will plummet as a result of such negative fanfare and media uproar. The President himself is even included in the bandwagon of hate. As BP, British Petroleum, is a British Company, its blow will be cast and witnessed on the foreign exchange market as well as oil sales will take a sharp nosedive as the result of widespread boycotting. How else could a company recover from a notorious and acrimonious reputation attached to it for having caused one of the greatest environmental disasters of all time. There will, at any rate but at extremely low rates mostly, be less people willing to invest in the company on a global scale. The gulf is American, but the world share's the ocean.
It's entertaining to watch such a group of formally-clad individuals as stock market brokers living a high society lifestyle akin to any male character in the show Mad Men of class and conspicuous tastefulness behave like such animals. Greed runs hard on Wall Street, and it's done on the government's dime even. They act like bullies, being in charge of national banks like Robert Deniro and the mafia were in charge of Martin Scorsese's casino.That kind of threat-based leverage and twisted, maniacal scheming that comprises stock speculation should be reserved for a Bond villain; however, in actuality it is the determinate of the entire U.S. economy. It doesn't take much more than an economics degree and good connections to land a job on Wall Street, however, skill and intrinsic, as well as extrinsic, understanding of the world market is necessary to fit in amongst the best. After all, the world market doesn't, by a long shot, consist entirely of Americans; the best and brightest traders the world has to offer exist in this vast, dynamic market and by far outwit and outmatch any product of the United States. The U.S. is really just a product in and of itself as far as the world is concerned, and a standard for failure: it offers little more value than a prolific churning-out of transient fads to be mass-consumed by a world full of gullible and culturally-curious youths. No one has ever seemed to tell the U.S. that you can't spend what you don't have. Debt is very much an American concept as countless individuals spend outside their means, financing things they shouldn't own, but when you look at nation's role models, i.e. AIG, Goldman Sachs, etc., what can you expect. The U.S. economy is run on tumbling dice, and it always gets snake eyes; that is why the stereotypical American has no place in the Forex. Your best bet: be an atypical one.