Foreign Currency Trader
Friday, November 4, 2011
Foreign currency trader numbers have increased substantially since the stock markets meltdown in 2008, resultant from the Global Financial Crisis. It is vital to note that a foreign currency trader makes money trading not by investing. The currency trader, often referred to as a forex trader, buys and sells currency of different countries. There is a distinct difference in activity between investing in stocks - where one might buy and hold a stock for a substantial period of time - and foreign currency trading, where a particular currency might be bought and sold within a matter of minutes, and even at times in a matter of seconds.
Until the mid 1990s forex trading - buying and selling foreign exchange - was the preserve of the major banks and big corporations. Today anyone with a computer and access to the internet can trade foreign exchange from anywhere in the world. Major banks like Citibank make more money from trading currencies than from the rest of their business operations. Daily volume of currencies being traded on the Interbank market is well over $4 trillion (US dollars).
Although there is a lot of money to be made trading currencies with every winner there is also a loser. People such as George Soros have made billions of dollars trading foreign currencies. However just as with bricks and mortar businesses the money trading business has its fair share of casualties. About 95 percent of currency traders lose and quit trading, either through disillusionment or simply because of lack of funds required to be able to continue trading activities.
Richard Dennis proved that it is not difficult for anyone to learn how to become a successful forex trader with his "Turtles" experiment - where he taught 14 average people, from all walks of life how to trade currency. After 2 weeks of initial training 14 newly trained "turtles" were given money by Dennis to trade forex. All of his students were successful and went on to become millionaires from trading currencies. What Dennis demonstrated was a person could become a successful foreign currency trader simply through education and access to capital. Coincidentally the lack of those two vital ingredients researchers have found is the cause of most business failures. Of the many would-be foreign exchange traders very few have adequate capital to commence their trading and a great number of them do not apply themselves to the trading in a business like manner. As it really is very easy to learn how to trade forex many - a great many - of people who try their hand at trading currencies treat it more like gambling, and they do not bother to undertake appropriate training.
You do not need a high level of intelligence nor do you require a college education in order to become a successful currency trader. If you have just an average IQ but are prepared to study the foreign exchange market to learn about fundamental and technical aspects of trading you too can make a good living as a foreign currency trader.
Paul Dean is a foreign currency trader who writes mainly about forex trading. Previously he was a corporate lawyer, financial adviser and economics teacher. He enjoys teaching people how to trade foreign exchange and you can learn how to be a successful foreign currency trader by reading more on his blogs at http://foreigncurrencytrader.blogspot.com/ and http://wherecurrencyexchange.blogspot.com/
