From Newbie to Veteran: Journey of a Trader

If you fail to plan you plan to fail.

Have a look at this article from GFT Forex about the importance of creating a trading plan.

Knowing what currency pair to trade is as important as knowing when to trade. Most traders make money in times of high volatility. Although the FOREX market is open 24 hours a day, it does not mean that any hour of the day is optimal for trading.

There are four major markets that trade currencies: Sydney, Tokyo, London and New York. The highest liquidity hours are found when two markets overlap.

Oanda created this little tool that helps traders visualize market hours in the appropriate timezone.

This is difficult to answer because it all depends on the investor/trader. Trading and investing both work on the following premise: A particular security will either increase in value or decrease in value within “X” amount of time for the a number of reasons.

Knowing “X” will tell you if you are a trader or an investor. If you think “X” will occur in a very short time frame (minutes, hour or days), you should consider yourself a trader. If you think “X” will occur in a longer time frame (weeks, months, years), you should consider yourself an investor.
The above two scenarios are not mutually exclusive. A trader can be an investor and an investor can execute a few trades. The key is to know prior to making the trade. Personally, I consider myself a trader. I do not think I have the patience nor the tolerance to wait weeks or months to see if a trade is going my way. I usually trade on a 5 minute time frame and my average trade lasts about 7 minutes. On rare occasions I will enter a trade that I expect to last for hours. 

Whether or not you consider yourself a trader or an investor is not that important. What is important is how you approach each decision you make and not confuse the two.

If the EUR/GBP breaks the support, we’ll have a nice short opportunity in the next couple of days. Something to watch for.

I have been trading currencies for about 2 years with my ups and my downs. When I first started I thought it was my straight ticket to riches. What I did not realize is that the journey had multiple stops along the way. I still believe that a trader can live off his or her trading activities, but before it happens, the trader should expect many years of disappointments, small successes and great frustrations.


The act of trading is extremely simple. There are only two major actions: going long or short. If it’s that simple, then why do so many aspiring traders fail? I don’t think I have the definitive answer, but I know it must include a lack of understanding of the markets, the instruments being traded, and finally, a lack of understanding about ones self.


The markets and the instruments can be taught through books, DVDs, seminars and workshops. Unfortunately the most crucial part of trading, knowing yourself, is not easily taught. Malcolm Gladwell’s book, “Outliers: The Story of Success” touches on the idea that it takes time to master a skill. In his book, he promotes the idea that 10,000 hours of work are needed before something becomes second nature, as trading should be.


Ego has probably cost traders millions of dollars in bad trades this year. A certain amount of confidence is necessary when it comes to trading, but the moment a trader becomes overconfident, the market will teach the trader a lesson about humility. Trade the market you have and not the market you want or think you have in front of you. Make sure the reason why you don’t have a clear picture of the market is not caused by your unchecked emotions.