Today, the financial market acts as a “lucrative prey” that brings investors super profitable sources of money. The people participating in that exchange activity are the traders. So what is a Trader? Is Forex trading suitable for beginners? To help readers get the most focused and accurate answer, today Learn Forex Trading will summarize all the necessary information in the following article.
“All” basic information about Trader
Next is “all” the basic information about Trader that you need to know. It can be said that this is what can help you gain more motivation to step on the path to getting rich from financial investment.
What is a trader? What is a trader?
Trader is a term in the field of financial investment. Used to refer to people who specialize in buying/selling various types of assets and financial products on the market. To make profits from exchange rate differences through trading sessions.
In the financial sector, Traders can participate in many different markets. Including stocks, cryptocurrencies, foreign currencies, stocks, Forex… They are representatives of individuals and organizations to carry out transactions through a commitment to buy or sell prices to make a profit. useful. However, to perform well in the role of a Trader, they need to be equipped with knowledge, skills, and a solid psychological foundation.
See more: You will lose if you do not know about Trading
Distinguishing Trader from Broker, Holder, Investor
For financial investment, participating individuals are often called by many different terms. For example: Trader, Broker, Holder, and Investor… For some new people, it is easy to confuse Trader with other terms. Therefore, you can distinguish them based on some outstanding characteristics as follows:
- Trader: These are investors who use the tendency to profit from the difference in buying and selling prices. Their order holding time will range from a few seconds, a few hours, a few days to a few months.
- Broker: These are brokers who perform intermediary tasks, connecting buyers and sellers. Brokers do not directly trade and their profits will come from commissions and brokerage fees.
- Holder: Medium-term investors only. This means they will not hold assets for a short time or too long like other long-term investors.
- Investors: These are those who hold assets for the long term. Besides profiting from price differences, they also receive dividends, rentals, and some other perks.
What is Forex Trader? How is a Forex trader different from a stock trader?
Traders are investors who conduct exchange, buy/sell activities. So what is Forex Trader? Forex Traders are traders in the foreign exchange market. They operate in the currency sector, exchanging between major currency pairs, minor currencies, or exotic currency pairs.
Both are traders, but Forex Traders are different from stock traders. Specifically:
- Trading on the stock market: Traders are responsible for analyzing potential stock codes. Based on that, find a point to place buy and sell orders to profit from that price difference.
- As for trading on the foreign exchange market: Traders will trade with currency pairs. Through predicting trends and price fluctuations, buy and sell to make a profit.
Despite the above differences, both Forex trading and stock trading involve buying/selling assets to make a profit. Both also require knowledge, analytical skills, and the ability to make intelligent trading decisions.
Classify Traders based on management organization
To distinguish between investors who specialize in buying/selling assets. The term Trader has been classified into 2 subjects based on the management organization, including:
Freelance Forex Trader/Trader
First, traders or freelance traders. They are their investors and use their capital to hold their trading positions. These individual traders often operate independently and rely on their capacity to make profits. Therefore, they must make their own decisions and take responsibility for their own choices.
Forex Trader represents an organization/legal entity
Second, Forex Trader represents organizations or legal entities. These traders use institutional budgets to invest and conduct market transactions. They often have teams of experts around them to support analysis and develop strategies to choose the right path. These Representative Traders must ensure the decisions they make are always consistent with the organization’s goals and strategies
Analyze the pros and cons of becoming a Trader
Today, trading has become an extremely hot career for those who love profitable investment activities. If this is the path you are aiming for, learn more about the job of a Forex Trader through the next paragraph of information.
What is the specific job of a Forex Trader?
The specific job of a Trader is to collect market information from many different sources. Through that data, Traders can make analyses and comments about the market. At the same time, they need to analyze price charts, and technical indicators… combined with their understanding to predict market trends.
After that, Traders must make a specifLearn Forex Trading plan. Regardless of short, medium or long-term investment trends, apply accordingly. Finally, based on the plan, Traders can place and manage trading orders to optimize profits and cut losses promptly.
Advantages of becoming a professional Trader
Currently, many people are looking to work as Traders to increase their income. Not only that, but becoming a professional Trader also brings them many significant benefits:
- Create job opportunities: Unemployed people can become traders and work in many different financial markets. This job also provides them with opportunities to access many aspects to learn, practice, and expand their knowledge.
- Flexible time: As a Trader, you will not be constrained by time and location. You can work anywhere, anytime you want. Thanks to that, they can balance work and personal life well.
- Opportunity to make a profit for everyone: With only a small amount of capital, a new Trader can invest and take advantage of the opportunity to make a profit for himself.
- No qualifications or experience required: To be a Trader you only need to equip yourself with enough knowledge about the market. At the same time, practice some analysis and prediction skills… without requiring qualifications or experience.
Risks that can happen to Traders
Traders can bring investors a desirable level of income. But if it goes wrong, it can also have serious consequences:
- High level of risk: If Traders make wrong judgments about the market, they will have to bear the risk of loss.
- Fraud: Besides, Traders often fall into scam situations. This comes from a lack of knowledge, causing investors to lose all their existing capital.
- Traders are not protected by law: Therefore, when encountering legal issues such as disputes, collapsed exchanges… Traders must bear their risks without any support from the State.
What to do to quickly become a professional Trader?
If you have read and considered the above factors but still want to become a professional trader. So don’t rush to ignore the 3 prerequisites below:
Master knowledge related to Forex trading
Before participating in the financial market, Traders need to master knowledge related to Forex trading. Learning and updating your knowledge will help you participate in transactions more smoothly, for example:
Indicator analysis skills in Forex trading
This is one of the most important skills of a Trader. Once you master technical and fundamental analysis methods, assessing price trends will become easier. At the same time, apply technical indicators: MACD, RSI, Average… to be able to make the most accurate decisions.
Master the method of using Forex trading orders
Furthermore, Traders must also clearly understand the types of orders in Forex trading such as pending orders, market orders, stop loss orders, take profit orders… and how to use them to manage risks. risk and profit optimization.
Traders need to determine the appropriate Forex trading style
In particular, traders must determine the Forex trading style that suits them. It can be short-term trading, scalping trading, or long-term trading. Each style has its advantages and risks, so you need to make a choice that suits the goals and strategies that Trader has set.
Have a clear Forex trading direction and plan
Besides, Traders need to create goal orientation and establish a specifLearn Forex Trading plan. Most importantly, you must be disciplined in executing trades according to the proposed strategy. This will help you avoid making decisions based on emotions. At the same time, maintain a disciplined investment approach and increase success.
Be ready for bad risks in the Forex trading market
In addition to successful investments, there will be losing transactions. As you know, emotions are the big rock that hinders traders when trading. Therefore, traders need to train themselves in the skills to withstand pressure in the face of risk. Thanks to that, Traders can avoid depression and bad mood in that situation.
Forex trading psychological balance is always stable
To become a professional trader, you also have to control your psychology and thinking to avoid being influenced and falling into the “trap” of the market. Because of the special nature and high volatility of the financial market. Therefore, traders must always keep a “cool head” to make the right investment decisions.
Instructions on how to perform some basic operations for new traders
As a new trader, you will probably have many concerns about basic Forex trading operations. Examples of how to play Forex or methods of analyzing technical indicators…
Basic steps for placing Forex trading orders
First, self-study Forex will guide you on how to place Forex trading orders. Currently, traders can use many different types of orders to trade. Therefore, you must understand clearly to be able to enter and exit the market appropriately. However, the way to place Forex orders on Brokers is relatively simple and similar. In general, the order placement process will be summarized in 5 steps.
Example of 5 steps to place a Forex trading order on Exness MT4 :
- Step 1: Open the command window to start setting up commands.
- Step 2: Choose the trading trend to buy or sell.
- Step 3: Set the buying/selling trading volume by the price trend.
- Step 4: Set stop loss and take profit points.
- Step 5: Select “Set up order” to proceed with the transaction.
Method of analyzing technical indicators for new traders
Not only do traders use basic analysis tools, but they also have to apply technical indicator analysis methods to improve trading efficiency. Some indicator analysis trends that new traders can use:
- Moving Average (MA): The Index calculates the average of closing prices over a certain period. This indicator helps traders identify trends and identify buy/sell points based on MA lines.
- Relative Strength Index (RSI): Indicator that measures the strength, overbought or oversoldness of a currency pair.
- Moving Average Convergence Divergence (MACD): Indicator that combines MA and Histogram to determine price transitions.
- Fibonacci Retracement: Use support and resistance levels to evaluate potential buy/sell/price levels.
See more: Instructions for registering an Exness account
Experience playing Forex quickly “upgraded” for newbies
If you want to quickly “get up to speed” in playing Forex, this is a set of tips drawn from leading financial experts that you can apply.
Proficient in using Forex trading tools
Certainly to become a professional Trader, you must clearly understand the trading platform you are using. This includes the tools and features they provide. By practicing regularly and making optimal use of tools: market tracking, and indicators… to increase the success rate of your transactions.
Find a reputable broker for Traders
Along with that, Traders need to understand that in Forex, “Broker” is the broker standing between transactions. Therefore, understanding the trading exchanges and finding a reputable, transparent broker that suits your trading style is a solid foundation for your oath to finding profits. To choose a suitable Broker, Traders can rely on criteria such as The Broker is licensed and regulated by the World Financial Agency, the trading exchange has the following fees: Spread Forex, Swap, Commissions… are reasonable, the broker offers rich and useful tools.
Learn how to use Copy Trading to trade Forex
At the same time, traders should learn how to use Copy Trading to conduct Forex trading. Copy Trading is a method that allows you to copy and follow your trades from other successful Masters. By using Copy Trading, Traders can learn more knowledge and experience playing Forex from the investment journey of professional traders. However, you should clearly understand the principles and risks of Copy Trading before participating.
Participate in forums to share experiences in playing Forex
In addition, online forums and communities are also places where Traders can share and access new knowledge from other Traders. Participating in these platforms also helps you expand your circle of friends and take advantage of future cooperative relationships. If you have any questions, don’t hesitate to ask and ask for answers from the Trader community.
Summary
Hopefully, the investment experience in the above article Learn Forex Trading will be a stepping stone to help the journey to becoming one Trader nyours become easier. Just know how to seize opportunities and make efforts to learn, success will never miss you. We are very honored to accompany readers and don’t forget to follow Self-study forex to update more useful information.
FAQs:
Should Trader become a career or not?
Today, trading is an extremely hot career because it brings huge profits. If you want to earn extra income for yourself, Trader is a perfect choice.
Should you invest in Forex at this time?
Forex is an investment market with great potential. If Trader knows how to seize opportunities and can quickly identify price trends. They can earn themselves a lot of profit from Forex investment.
Is investing in Forex legal in the UK?
In fact, in the UK, there is no legal recognition for any Forex exchange. However, this does not mean that Forex investment is a violation of State law.
