1- Forex Trader: An Introduction

A trader is someone who places orders on the financial market. This could be on behalf of financial institutions, such as big banks, investment funds and hedge funds, or as an independent trader.

Exchange orders, such as buying or selling stocks, are either in the trader's own name, or on behalf of clients or for the financial institution or broker that employs them. There can be further categorisation, depending on the assets being traded: Forex, equities, bonds, commodities, etc.

Traders who work for financial institutions or brokers buy and sell shares on behalf of their employer's clients, not with their own money. This means that rather than making a profit or a loss on their actual trading, they earn a salary as a trader. In this case, the trader takes virtually no risk in the market - it is on their customer buying or selling financial instruments to cover the risk. The trader's clients may be anything from individuals to companies that do not have a trading room of their own.

Those who trade on their own personal account are using their own money to attempt to earn profit for themselves. These accounts are funded with their personal funds and trades are executed through online trading platforms. Even though online brokers offer leverage, the amounts traded by home traders are much smaller than those of a professional trader. Since online trading is often done on the OTC (Over the Counter) market, the success of traders in their own accounts are only estimates.

2- Defining Success as a Forex Trader

Now that you know what a trader is, how can you become a forex trader? And then, how do you become successful at it?

When starting to trade, it is important to understand what you want to achieve from it, and how you define success.

Things to keep in mind when you start trading Forex:

• Set yourself a realistic and quantifiable goal. This could be something along the lines of, achieving a 20% annual return on your investment, or reaching a total of 100 pips per month.
• Your goal should also be easy to measure.
• Set a goal that can be achieved over a long time frame - it is recommended to set an annual goal to achieve rather than a monthly goal.

Once you have set your main trading goal for the year, it is now time to start learning how to achieve it.

• Identify what resources are available to you.
• How much money are you able to use as a starting deposit?
• Do you want to become a full time Forex trader? Or are you just looking to trade on the weekends?

These are some of the questions you should be asking yourself.

Once you have a clear vision, it is time to make your action plan. This plan should include the currency pairs you are planning to trade and the number of daily trades you are going to commit to.

This can feel a bit overwhelming for new traders, so the good news is that in this article we share our top 10 tips to help you learn how to become a successful Forex trader.

If you are a beginner trader looking for a place to learn the ins and outs of Forex trading, feel free to tune into our live and free webinars by clicking the banner below: