A Successful Trading Development

Successful traders develop their own system.

The best marketing wizards in the forex trading industry however are the market makers themselves, the forex brokers. With all the cash they make from the losers who fall victim to their advertising of tight spreads (as opposed to futures), no commissions (most losers in the stock market believes the commissions are killing them) and low margins (flip side of high leverage) and recently free training, free news, free analysis, they can afford to appear on every imaginable website with their banners, Google adwords, pop-ups and other advertisements.

Recently I had a discussion with a VP of one of the more prominent forex brokers about marketing and how they have to compete with the rest. Very casually he mentioned that really, this business was all about marketing (and that it was a very good business to be in!)

Forex trading is about being a professional at what you do.

To make it easy for you let me assure you that you don’t need a financial degree or a doctoral dissertation in applied mathematics to be a successful trader. What you do need is a finely tuned and constantly developing common sense.

In a weird sort of way, many of the “follow-my-1-2-3-secret-system” systems all share some of the core ingredients of how to make money. Unfortunately it is what they don’t have that makes the difference.

Not so long ago the forex market was the sole domain of institutions, banks, investment companies and very rich people. Then it came to our neighbourhood, and the little man could play. Obviously, if we want to trade and win in this market we must do some analysis of what’s going on in the market, what makes the prices fluctuate and so forth.

A typical institution which specializes in forex trading / forex investment has an army of analysts and economists and traders who do fundamental analysis, technical analysis, quantitative analysis and flow analysis - all contributing to their efforts and their profits. They also have risk analysts, risk managers, portfolio supervisors and a host of assistants to all the big shots. And they don’t only trade spot forex, but other instruments like options, forwards and swaps as well as interest rate instruments.

The two sectors that have most heavily invested in the collation of timely information are the military and the markets (financial institutions). You are probably aware of the common view amongst technical analysts that the current price contains all the necessary information in the market. In the forex market information is money. There is one little problem, most information in the forex market is quite fuzzy.