Trading currencies for a living is one of those professions that you rarely hear of, much less think about becoming. But make no mistake, Forex traders are out there, with some making consistent money, while others still trying, at the expense of their diminishing savings.
So, what’s it like to trade Forex for a living? Here’s a day in the life of a Forex trader…
In the past, traders had to be physically present to punch in trade orders either for their clients or for themselves. Exchange floors, or as traders called it “pits”, swarmed with all types of traders, young/old, cotton and stock trader. Most players were commercial and had a decent net worth, or worked for such companies.
Thanks to technology, trading the Forex market is now more transparent and accessible to regular people. Plus, you can get everything you need from your home office with a few clicks of the mouse.
This is the modern life of Forex traders and investors.
Some traders operate with a single screen for viewing price charts while others go for a more extravagant setup and configure 3, 4, and even 6 charts side by side. Since they spend so much time at their desk, it needs to be aesthetically pleasing and functional.
Some traders go so far as to buy $1,000+ chairs.
They decide when they want to trade, getting up when it is convenient for them and working as long as they see fit. Many traders have a pre and post-trading routine that they follow.
The work hours of FX traders are different and often depends on which global markets they wish to be exposed in. There are primarily 4 exchanges that open and close at different times of the day – New York is open between 8AM and 5PM EST, Sydney comes online at 5PM and closes at 2AM, London opens at 3AM and ends 12PM, and Sydney is open from 5PM to 2AM.
As you can see, there are times when 2 exchanges overlap hence providing more liquidity and movement for traders to profit from, particularly New York and London from 8 to 11AM.
Tools They Use
Unlike other professions, most tools a FX trader needs is found online. For aspiring traders, the first thing you will need is a broker. Choosing a broker is a very critical part of the process. The broker you work with plays a key differentiator between long-term success and failure in the Forex trading business.
Ideally, you should only work with a broker that has been operating for 5 years or more and have stable finances to withstand unpredictable market conditions and changing government policies. Real-time price updates and news feeds are also must-have tools that your broker must bring to the table.
This will give you sufficient time to reach to volatile price fluctuations and react to unraveling market opportunities.
Platforms are another common tool used everyday by a Forex trader. They are often provided by your primary broker, however third-party platforms such as MetaTrader 4 can also be downloaded and synced to your broker account.
While professional traders use technical indicators, other traders prefer a clean chart and trade solely with price action or based on fundamental data.
The day-to-day life of a Forex trader brings with it unexpected challenges that you can either profit from or lose money. The important and perhaps the only thing you can do is to manage risk, meaning you should be emotionally fine with closing losing trades to prevent them from becoming bigger losses while letting profitable trades run.
If you don’t think that trading is for you, our professional traders can help you leverage the Forex market, without the stress and wasted time.