Forex Market – Trading With Conviction

Trading in foreign currency has been a viable business option for decades, almost since the emergence of cross boarder trade and currency exchange markets. The real fact is that this market was restricted from most of the wider public as brokers ran the floor while financial institutions were the main traders.

So far, the market is still being dominated by the large Investment banks and related institutions. The introduction of online trading interface that are easy to use and accessible to the wider public has brought millions across the world into the Foreign Exchange (FOREX) trading platform.

With the varying background of traders, ranging from Bankers and investment Managers handling portfolios in the Millions of dollars, to the stay at home mum trying to make an extra income from the financial speculative market. The new dynamic floor has brought the “Yes, I can!” Feeling of attainability.

In the developing south, millions who feel denied from the reward of their full potential have started trooping into the FOREX market. All around me I see consultancies and workshops offering training and mentorship for the bold hearted willing to stake their bet on a successful trading career. They make promises of as much as a 1000% margin in the first month of trading and even point out one or two clients ready to testify of the fortune they made trading within a relatively short period.

The crux of this write-up is focused towards the trading pattern beginners in the FOREX trade adopt without much understanding of the market environment they operate. A lot of the trading content focuses on:

• Use of Fundamentals (trading strategy based on latest news update relevant to market trade).

• Understanding the Technical (which deals with using statistical projections to predict trend patterns).

The fact worth mentioning is that majority of traders in developing economies have relatively small investments ranging from a few hundred dollars to a couple of thousands. Their tutoring and online trading platform have induced into their pattern of trading a predictable decision trend. This poses a high vulnerability, and I will state why.

The large banks, assets/portfolio managers and volume investors who operate in this same market have had track records spanning years or decades, or have so much invested in data collection and analysis on a scale that would rate to the efficiency of state intelligence gathering agencies. These traders work with advance customized software programs that are linked to the trading floors providing on-time indicators of margin prospects that can be harness within a slight shift in the market trend. They also have some of the fastest trading servers that give them an edge of entering a trade before anyone else. With their wealth of experience, expertise and assets, it is difficult they make the same mistake twice.

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