Your Questions About Successful Trading Forex

Betty asks…

i want to be a stock broker full time please help?

Hi i need help i want to be successful in the financial markets eg stocks forex i need to know if i can do work experience or if someone that knows what their doing i have been trading forex for 6 month and seem to go ok i have a interest in the financial side and i really wold like to see how it is done and hopefully work as an analyst one day thank you

John answers:

In the US – You need to be an employee of a Broker/Dealer so they can sponsor you in order to become a licensed stock broker.

Firms usually want college graduates, but it is not really necessary nor really a requirement but many firms like it and make it their requirement. Bank broker/dealers usually want all the sales reps to be college graduates.

Your college major is not important, (No courses in the Academic world prepares you to be a broker). But since your coming into the world of Finance, some of the more helpful majors would be Finance, Accounting, Economics or Statistics,

You should be good at math and have a decent idea about the stock market.
You should be good at selling, and it would help if you have an outgoing personality.
So if you‘re good at sales, or have a good sales background in place of a college degree, you’re part way there.

Try to get with any major brokerage firm they will put you through an in-house training program, which is primarily getting you ready to take the necessary test for licenses. You will need a Series 7 which is a General Securities Brokers test, and a Series 6 which is just for state approvals.

Most brokerage firms, except bank B/Ds, will put you on salary and once you have passed the test, they will slowly take you off salary and put you on commission basis pay out. Banks will usually keep you on salary.

If you have your choice, you’re always better going to work for a regular B/D rather than a bank – You will learn, faster, better and the proper way of how the industry works. As a broker for a B/D you can always find another B/D that will hire you or at the worse, you can always work for a bank.
But if you’re Bank B/D trained and licensed, it’s very difficult to go work for a regular B/D

So, check the Yellow pages for brokerage firms (or major banks with an Investment Service) in your area. Bring your resume and get in their faces. But your very “limited” experience trading the Forex is not that important and bring up your “success” does not work to you benefit.

Good luck, go try it, you may like it

William asks…

What seperates successful online traders from failures?

By traders I mean those who trade long and short in stocks, bonds, forex, commodities, futures, etc…
The opening line in that link cracks me up.

John answers:

Many very intelligent people have failed to answer this question. Intelligence has very little to do with it, surprisingly, as I am a test of that premise. I am not overly intelligent, yet I am successful.

What a trader lacks in intelligence, he makes up for with study and hard work. Perseverence is a must, passion is a must. If you are just doing it for the money, it will grow tiresome, and will be too much work.

Although a trader is probably intelligent, he need not be, but he is certainly knowledgeable. I have over 100 books on the subject.

Like any vocation, it takes hard work, lots of study, and the testing of your theories, learning what makes you tick, learning your own particular time and stress levels, and fighting the emotions of fear, greed, and loss of hope.

Most traders spend their entire time looking for the Holy Grail of indicators, and that’s why 85% of all traders fail.

Your success or failure lies within you. Part of the key lies in finding the right combination of which markets and which time intervals to trade. For example, I am no Day Trader, although I do Day Trade sometimes. In choppy markets, it is a must, like now in the Currencies and even more so in the stock market.

Some say that psychology is 50% of trading. I would guess more. The markets weeds out people who are unable to be honest with themselves. Trading is one of the most self-revelatory things that a person can do. Day in and day out you’re confronted with all your primal emotions.

Many traders react to uncertainty by hoping it would just go away. They fruitlessly try to deny the implications of change. But change is commonplace in trading, and it’s vital that you accept change and think of creative ways to deal with it. You must learn to accept the market on its own terms; hope must go out the window. After a trade is put on, it will do what it will do, and no amount of hope or fear will change it. Without a firm committment to this psychology, if you chase your tail in worry, the markets will eat you alive.

Most novices focus on how much money they can make, which is basakwards to what they should be doing. If you focus on risk control and money management, you might stick around to play the game another day.

There are so many places you can go wrong, and only a few right ways of thinking will help you. Your ability to concentrate fully and intensely can mean the difference between consistently taking home huge profits and barely staying above water. It’s vital that you pay attention to multiple sources of information, sift through them, prioritize each separate piece, and make an astute decision once all information has been scrutinized. You can’t be distracted and unfocused while formulating a trading plan or monitoring an ongoing trade.

It is vital that you develop your intuition by trading with a variety of methods under a wide range of market conditions.

These reasons are just for starters. Maybe I should write a book.

Mandy asks…

Forex Broker Concerns?

I’ve looked at what several websites and forums have said about and how they have rated several different ECN brokers, based on a variety of criteria.

What concerns me most, however, is whether or not there are “maximum leverage amounts” and “withdrawal limits.”

What I mean by “maximum leverage amount” is not by how much your account can be leveraged (such as 100:1 or 200:1), but the actual maximum dollar amount. Someone told me most brokers set a limit of 50 standard lots (or $5 million) per trade. Is this correct? Are you really unable to purchase more than 50 standard lots in one trade?

I was also told that very high volume trades would be passed along to the real market, even by ECNs, and that this would prevent the trade from being executed “instantly.” Hypothetically, if you were trading $1 million or more per trade, by how long could your trade be delayed? Would it be minutes, or could it be several hours or even longer?

And by “withdrawal limits,” I mean are there usually limits in place as to how such (in dollar amounts) any client is able to withdrawal from his/her account to a bank account (or through a similar process of getting funds out), such as weekly or monthly? If so, if someone were to actually become a Forex “millionaire,” wouldn’t it take him/her several decades just to withdrawal the money from his/her account, little by little?

I’ve heard of dealing desk brokers that have “closed” client accounts because they grew too large (were too successful). However, would there be any reason or incentive for a real ECN broker (a reputable one) to close one’s account because it became too large?

And might it actually depend on how large the broker is? I’m looking at major and renowned ECN brokers such as MB Trading, Interbank FX, Interactive Brokers, Dukascopy, ACM, and ATG, among others.

Thank you in advance to anyone who can tackle this query!

John answers:

Well since you are more concerned I suggest you to hand on with forex realted forums.

The most active one is
www.forexfactory.com

Also there is a lot of guide article you should read which will give you more idea.

Ruth asks…

my ques is on FOREX?

does U.S play the game ,by determining the currency rates,according to the changes happening their?interested in taking up currency trading as a profession?how far will it be successful?need help from experieced people to goahead.can i learn enough from the softwares they sell,?if so which would be the best paid software ???????need some positive feedback,to boost up my confidence.

John answers:

The US $ was till about 6 to 8 years back the currency that was univesally traded. But now the Euro has become equally important. I suggest that u take a job with a a Forex trading firm to learn the ropes. Hands on training is the best.

Chris asks…

Am I better learn to become an Internet entrepreneur or become an investor to become a multimillionaire young?

I am 18 years old and I am looking into my various options to try and become a multimillionaire while I’m still young. I have tried forex trading, but didn’t do too well with it. The way I see it, forex trading is not for beginners like me and more for educated professionals who’ve went to university to get degrees on the subject. My other investment alternative is trading stock options, i.e. puts & calls which is better than trading forex I think, and is more predictable. My other alternative besides becoming an investor is to become an internet entrepreneur by first using what little money I have to create some applications for the iPhone or something, and then using the proceeds as an investment in setting up a website and to try and turn that website into a successful multimillion pound business. What would you say is the best option if I want to become a multimillionaire all in my early 20s? Please give a good reasonable answer. Thanks!

John answers:

By being diligent in your choice, both have the possibilities of allowing you to become a multi-millionaire.

However, regardless of your choice, you should be proficient in your career choices plus some (or a lot of) luck to achieve your million dollar goal.

Just by trading in options based on market noises/ rumors will only make you poorer as evidenced by the countless ruined, regardless of bull or bear market…

To profit hugely from the stock market, one needs to have some general knowledge of the business sector(s) and where you think its going to head in the next few years. E.g. Carbon Emission Trading and public transport, like trains is likely to do well in the next few years unless green energy technology is making quantum leap or extremely huge oil reserve is discover in political stable nation(s). After defining the (3~5) sectors, then research and buy companies with good products, revenue/ business model and great marketing/ sales plan.

However, please remember not to pay a higher price than you believe its worth. You can determine its worth by looking at the sector’s potential growth, profit margin and current revenue, followed by the company’s brand/ market (leadership) position to determine what you believed is the correct share price or P/E ratio. Please remember everything is ONLY an estimate, no one in this world has the real figure but it’s due to this lack of info that great wealth is created or broken.

I would recommend you to read Warren Buffet’s essays, investment philosophy and Phillip Fisher’s Common Stock, Uncommon Profit.

Likewise, just wring a few line of code and make a few generic applications will not get you anything, other than personal gratification.

You need to have a vision of where your business is heading and the business model to generate revenue. Is it thru advertising, sales of your application or co-marketing to sell other manufacturers or retailers’ goods / service thru your applications/ web-site?

I think you can do both (stock investment/ internet entrepreneur) at the same time since long term investing takes very little of your daily time once you have established the stock picks. (Unless you belong to those who make their stock picks quickly with no grounds to support their decisions and fritters a lot frequently are not suitable to make their investment).

Few makes a lot of money from option trading consistently, regardless of what the market said. Overall, most are ruined over long term unless,
i) You are really good and can read “people’s minds” and a lot (in MILLIONS).
Ii) You have insiders’ info which will land you in hot soup if caught
iii) You are a broker/ hedge fund, earning commission regardless where the market is heading. If the market goes up, you get even more commission. No risk unless you play with your own money too or you have no (rich) clients.
Iv) You come across a SUPER BULL market, such as the dot-com or the sub-prime bubble period and you entered in the early period and exited before it peaked. Making enough or reach a pre-determined (achievable) target is enough, do not be too greedy. If you insist on making the most profit by waiting for the market/ stock(s) to reach its peak, most likely, you will end up losing a lot of money…

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