Forex trading can be super rewarding when done with proper knowledge and skills but can be extremely challenging if you approach it as a game or gambling endeavour. Foreign exchange markets are active over the clock and trillions of dollars are traded daily. As a result of this 24/5 activity, the FX market provides traders with plenty of opportunities to speculate on price movements and make huge profits. Let’s explore whether it’s possible to become a Forex Ninja and how you can sharpen trading skills for high-precision execution. 

Understanding the Forex Market

Before we delve into the specifics of FX trading, let’s quickly answer the main questions. Yes, it is possible to become profitable in Forex trading and there are specific steps for it. There may be several fundamental concepts when trading Forex, and knowing each of them becomes super important when aiming for huge success and considerable profits. Forex markets consist of international banks, corporations, and retail clients or traders. Knowing how this market operates is a cornerstone of becoming successful. Fundamental analysis and technical analysis are two important pillars of Forex trading success. Fundamentals mean to analyze major macroeconomic news and trends, and technical means to analyze price charts. However, there are other important criteria for being a successful trader. 

Aspects like what is a good spread in forex, how to find a reliable broker with these spreads, and which platform to use are also crucial parts of being an FX Ninja. Spreads in Forex trading are differences in the bid and ask prices of a currency pair, or simply a difference between the buy and sell prices of an asset. Lower spreads become essential when opting for short-term trading strategies, which is generally called scalping. The broker allows you to access Forex markets and speculate on currency pairs, and it is essential to find a reliable broker and avoid getting scammed. You also need to get yourself familiar with at least one of the popular advanced platforms to be able to execute trading positions and risk management methods. 

The Path to Becoming a Forex Ninja — Zero to Hero

The path to becoming a pro FX trader is not easy and requires careful planning and execution of this plan. The steps for starting from zero and becoming an absolute legend consist of the following:

Step One: Mindset of a Forex Ninja

The mindset is critical in all career choices, including Forex trading. Before you become successful, you need to have a pro trader’s mindset. This mindset includes being able to remove emotions from trading and become super disciplined. This is because profitable trading is a very boring endeavour, you do the same thing, every day for several hours to achieve consistent profits. 

Step Two: Education and Analytical Skills

Together with mindset, traders should build a strong foundation. Beginner Forex traders should start with education and practice trading on a demo account. A demo account is a trading account similar to a live account, but the money is virtual. It allows traders to open and close trading positions just like in a live account and helps them build basic trading skills.  

Step Three: Risk Management skills

It is paramount in trading to always use a strict risk management plan. The basic but also powerful method is to always use stop-loss orders when opening a trading position in the Forex market. 

Step Four: Developing and testing Trading Strategies

When you get used to trading on a demo account and can freely navigate in a trading platform interface, it is time to build and test trading strategies. A trading strategy is a set of rules that outlines the steps for entering and exiting trades based on some predetermined criteria or trading set-ups. 

Essential Skills for Precision Trading Execution

Ninjas are great assassins who are very well-trained in their arts. Forex Ninja traders also need to practice trading hours every day to ensure they become masters of this profession and build strong trading skills. Here is the list of skills to execute trades like a FX Ninja:

• Be very disciplined — do the same every day to acquire a trading skill set
• Execute your trading strategy flawlessly — avoid emotional trading, control your emotions
• Have a trading edge — backtest your trading strategy and ensure it performs well on historical data

In the end, remember that trading is like any other profession. It requires time and effort to become a master of Forex trading, and do not hesitate to put enough time and effort into becoming profitable. 

The forex market is all about exchanging one currency for another quickly and easily to profit from the trade. There are plenty of benefits to using this marketplace for international trade. Here’s everything you need to know about it.

Manage your risk and currency exposure

One of the biggest issues with larger international trades is that the exchange rate is going to affect your investments. Fluctuating exchange rates are going to take a chunk out of your investments if you aren’t careful, and these constantly changing prices are going to cause depreciation challenges. However, you can protect against currency exposure and other risks with careful planning.

There are three types of risks. The first is transaction exposure, where exchange rate fluctuations can affect a company’s obligations to process payments in a foreign country. Translation exposure is the risk that a company’s equities, assets, liabilities or income will change because of exchange rate fluctuations. Economic exposure is caused by the effect of unexpected exchange rate fluctuations on cash flows.

To mitigate these risks, many businesses complete forward contracts to lock in the exchange rate or use currency options to buy or sell a currency at a specific rate on or before a specific date. Using these tips can help prevent currency exposure from ruining your trades.

Keep yourself informed with forex news

Forex news can be your lifeline and your guide into the world of using forex for international trading. Keeping yourself informed of the news around your currency is going to be extremely helpful – especially if you are trading in the US dollar, which is a partner of a lot of currency pairs. Any changes in the US are going to impact a lot of financial markets. 

Being aware of the news and knowing when the news for your currency is released can help you make a plan to ensure that your international trades are bearing you a lot of fruit and some good payments! 

Adapt pricing changes for forex trading

Price action trading is all about highs and lows. You buy low, you sell high, and you try to make a profit in the middle of all this. However, if you are internationally trading, you’ve got two massive sets of data to work with. So, you need to make sure that you have a pricing strategy for the international market to find some success. 

Ensure that you are analyzing the currencies you are internationally trading, and focus on getting the best profits that you can. Having strategies and knowing how to price change is going to do infinitely more for you than simply going in blind. 

Learn and benefit

Finally, don’t be afraid to make a few small international trades and find out about the process. The forex market is going to help you make some international trades – once you learn how to use it, of course!

But there’s no need to panic. Forex options might be complicated, but they also come with potential. This article will explore forex options, how they can be used, and contextualise them in the broader framework of being cautious while trading. 

What is a forex option?

A foreign exchange option is a way of securing the right to purchase a foreign exchange pair at a particular time and at a certain price. Rather than actually settling the transaction at the outset and moving the value across, the forex options system is instead a contract: it’s a way of securing yourself the possibility, or option, to purchase at a later date if you so wish. 

How can they be used?

Often, forex options are used to manage risk. Say you want to purchase the US dollar/British pound currency pair, and you’re assuming that the US dollar will go up. You could go ahead and do that but also purchase the option to essentially have the reverse if the market goes in the pound’s favour. This will cost you more, but you’re, in essence, taking the risk that your profit from the initial dollar pound transaction will be enough to recoup your initial investment and cover the cost you paid for the option.

There’s some key terminology associated with this approach. One term is “strike price”: this refers to the agreed price that will kick in if the option is taken, such as the sale price or the buy price. And another is “expiration”: this refers to the point at which you have to decide whether or not to use your option. While it may seem desirable to have your option open indefinitely, this isn’t an available choice in the forex world.

Another way that forex options can be used is for pure speculation. This is where the option itself is the trader’s focus, rather than an actual transaction for which the option is playing a risk management role. Usually, people do this because the cost of buying an option is cheaper than the cost of buying the actual foreign exchange currency pair. This way, they can have more of their capital involved in the transaction and also make the most of what is known as “leverage”, which is essentially borrowing money from the broker to expand the size of the capital put down. 

A note of caution

Before plunging into forex options trading, it’s vital that you do your research and find out some more about the risks involved. This is where sites such as Forex Traders, where you can learn to trade forex and get top information, really come into their own. 

It’s a complex part of the trading industry, and the risks involved in being a beginner who gets overly involved in forex options trading without full knowledge of what could go wrong are high. They could certainly lead to your capital being lost. So, while you may think you know it all from reading one or two articles, it’s best to instead treat those articles as stepping stones to more information about just what forex options can offer. Information, as is widely known, is the key to ensuring that you are empowered to make the best decisions – so it is worth spending time making sure you only use good sources. 

Overall, it’s definitely worth exploring the prospect of forex options if you’re a newbie in the foreign exchange trading world. These financial instruments can provide you with all sorts of plus points: they can allow you to hedge when it comes to your other forex positions, for example, or they can be used for speculation in their own right with the prospect of making money.

It’s certainly worth remembering that they are complex and potentially volatile instruments that may cause you to lose money. But if you do your research and ensure you’re clued up on how they work, you’ll be able to go into the transactions with some confidence. 

Forex trading can offer an efficient way of building real wealth. However, it comes with its risks. A few mistakes can end up costing you real money, not just time and effort. Luckily, Adam Truelove, Global Trading Director at Learn to Trade, has some tips on what to avoid.

Forex trading for beginners can be fraught with dangers, but by laying out examples of what you shouldn’t do, we can hopefully make the path ahead a little safer for you. Here are some common mistakes beginners make that you should avoid, to make your trading as low risk as possible.

1. Lack of direction

It’s no secret that the Forex market can be highly unpredictable. It is vital to not confuse this ‘unpredictability’ with ‘randomness’ as many beginners do. Often people start by going on to trade as randomly as they believe the market to be. Sometimes they win, sometimes they lose, but they never learn how to do either reliably. You have to learn to react to the volatility of the market, not give into it.

So, how do you work your way through the seeming madness of it all? The first step (and most crucial) is to have a trading plan.

Another important part is learning from the losses that you’ve made in the past and why they happened. The best way to do that is to record them in a journal. By keeping tabs on every trade you make, you will start to notice where it isn’t performing as well as it should be, or other factors are influencing outcomes. Having this plan and being able to change it based on the results is vital in Forex trading.

2. Not having a stop-loss

A stop-loss is an order designed to stop you from losing too much money on any one trade. It is an essential part of Forex trading and the longer you go without it the more you leave yourself open to risk. You should decide how much you’re willing to lose on any one trade and assign your stop-loss order accordingly. Just as importantly, you should avoid moving your stop-loss order just because your instincts tell you that one trade is eventually going to be a winner. Always let your head rule your heart, and never allow your emotions to make trading decisions for you. Everyone will experience some loss when trading; but by putting in place a stop-loss you are protecting yourself from losing too much, too quickly.

3. Averaging down and selling early

Trading is not just a numbers game, it’s a game involving your own emotions and instincts. Nowhere is this clearer than in the very common mistake of averaging down. Although this error is more common in the trading of stocks and shares, it is important to understand why it is a bad idea for beginner traders.

Averaging down is the practice of adding additional funds to a trade that you’ve already invested in at a lower rate than you initially purchased. You might do this because you have already invested in a trade, and you decide that it would be best to invest more while it’s cheap, and wait for the value to go back up. This is a sunk-cost fallacy, and you may be waiting a long time for any return, missing out on more profitable opportunities in the meantime.

4. Not diversifying enough or diversifying too much

Overtrading is a very common mistake that exposes many beginners to too much risk. By doing this, you are not insulating yourself from the market, in fact, you might as well be trading randomly. You should only trade when you think you have the advantage, and ensure you always trade according to your plan. An even larger risk for beginners, is over-diversifying by trading too many positions at the one time. By doing this, you leave yourself open to market risk, making it much harder to spot which positions and trades work. This also increases your risk of trade duplication, and overlapping positions, which can effectively double your losses on a bad trade.

Trading too much of your capital is another easy mistake for people to make. By risking large amounts of capital, you are likely to lose out in the long run because you have exposed yourself greatly to market risk. By mitigating your risk you can spread out your capital. Investing a maximum 2% of your total capital loss strategy rule, protects you from losing too much too quickly, when the market works against you.

Forex trading for beginners is a long learning process. It’s best to make sure you’re doing plenty of research, taking advantage of demo accounts and learning the markets, before you start depositing real money. Through your efforts, you can make Forex much less risky.

They make it seem so easy to just jump into the foreign exchange industry and begin trading. But there are actually plenty of considerations to make. Steve Plant, the CEO of WhichFX, has compiled a list of the dirty tricks of the FX industry to be aware of when planning currency transactions.

As an international small business owner, I am all too familiar with the complexities of the foreign exchange landscape. When trying to arrange a foreign exchange (FX) transaction, initial dealings with banks are often frustrating due to poor rates and high commission, which are often particularly unfair to smaller businesses. As such, many turn to brokers to secure more fruitful deals. This can often be overwhelming, however, as different brokers offer varying rates, commissions, and hidden costs.

It can be difficult to cut through this cacophony of brokers, who often solicit unwanted quotes once you’re on their books as they’re hungry for your business. They may appear good on paper but when it comes to initiating the transaction the rates and spread have completely changed. This is thanks to the inaccessible nature of the FX marketplace, perhaps cultivated by banks and brokers so they can hold a monopoly on foreign transactions.

Banks take advantage of the trust placed in them to provide good value and competitive services, making high profits off small businesses’ FX transactions, giving you rates that differ vastly from live interbank rates.

Brokers offer honeymoon rates to attract new customers but then slowly increase the spread (the profit the broker makes on each transaction at the clients’ expense) once a relationship has been established.

Some brokers refuse to use new services that drive down the spread, reducing their profits but maximising the value for clients.

Aggressive sales techniques keep you trapped in the honeypot. Brokers call clients with unsolicited sales calls, often creating a sense of panic by suggesting now is the best time to conduct a transaction as rates are about to take a turn for the worse in the very short future.

Broker comparison sites are misleading by only comparing rates, putting advertisers at the top of their lists, and omitting commission and hidden fees.

SMEs should avoid banks, turning instead to brokers, but beware, and tread the ground of the FX landscape carefully. Frequently shop around to take advantage of honeymoon rates to try and find the best deals.

In my own experience, I often found it frustrating trying to find the best deal and ended up spending countless hours consulting brokers, distracting me from other aspects of my import/export businesses. As a result, I founded WhichFX.

WhichFX is the first live broker comparison site and puts brokers in competition with each other to bid on FX requests, driving down the spread and giving SMEs quotes as close as possible to the live interbank rate. Rather than spending hours on the phone haggling with brokers, WhichFX provides you with a live quote in 15 minutes.

Due to the progressive nature of the WhichFX platform, some brokers have refused to sign up to it as they want to maximise their profits, even though this means their customers would get better FX deals. This illustrates the established FX industry as self-serving and unwilling provide small businesses with the best foreign exchange deals possible.

The second CFO that Finance Monthly reached to this month is Nick Haslehurst who joined moneycorp as Chief Financial and Operating Officer in 2012, bringing more than 17 years’ experience in global finance to the helm.

Established in 1979, moneycorp is one of the largest and fastest-growing players in the foreign exchange and international payments market. Providing a quick, secure and competitively priced international payments service, the specialist firm helps individuals and a wide range of businesses with FX risk management solutions, allowing them to trade foreign exchange and make international payments across the globe.

In his role, Nick oversees all moneycorp’s support centre functions, from financial control and accounting, planning and analysis, treasury, technology, compliance and legal services.

With previous positions as Global Finance Director at MasterCard Inc’s Prepaid Debit Card Division and Travelex Ltd, Nick is no stranger to revamping and implementing business strategies to help streamline largescale operations and organisational structures. Nick has been instrumental in driving moneycorp’s impressive international growth strategy, including the development and launch of Moneycorp Bank. With over 800 staff across Europe and the US, the company is set for further expansion in the near future.

Moneycorp has just launched its 2016’s H1 Trading results – what have been the company’s biggest achievements in the first six months of 2016? What are you most proud of?

It was an extremely busy half-year for the team at moneycorp and there have been lots of successes to reflect on - not least, a strong set of H1 results which saw the company handle 3.5 million transactions and £11.4 billion worth of currency in the run up to the EU Referendum. Financial performance is obviously a key indicator for any business, but this has to be coupled with long-term investment and continuation of growth for the future. Financial services in all areas are changing at a rapid pace - customers expect more transparency and improved digital interaction - and at moneycorp this is always front of mind.

In April we announced the successful completion of our application to acquire a bank license, and with it, the launch of the new Moneycorp Bank, which will act as a separate legal entity to our main operations here in London. We invested significant time, resource and infrastructure into acquiring the license and we see it as a major step in establishing moneycorp as a leading global FX risk management provider and international payments specialist. Most recently, our international expansion plans have taken us into Romania, where our newly-launched office comprises a foreign exchange dealing and sales team, client onboarding desk and compliance, complete with the use our centralised technology platform.

Technology and the digital transformation of the business was also a sharp focus for us in H1. As well as investing in a complementary offshore technology hub in India, significant investment has gone into the launch of the new moneycorp app, which went live in the App Store last month, allowing global payments and FX dealing on the move. We regard ourselves as a front-runner in technology-led services, so moving moneycorp’s browser-based technology into a fast, simple, international payments app for our customers was a key milestone for the business.

Moneycorp has recently signed a deal to acquire a foreign exchange and payments business in Brazil – can you tell us about the company’s expansion plans? What does 2017 hold for Moneycorp?

At moneycorp, our expansion plans focus on controlled growth within our existing domestic and international markets, whilst establishing a foothold in new markets that offer solid and sustainable growth opportunities, both now and in the future.

In 2015, moneycorp signed an agreement to acquire a stake in a fast-growing Brazilian foreign exchange business. Earlier this year we also announced the launch of one of our largest ever commercial partnerships with global news giants CNN in the US. Both developments have given moneycorp a solid platform to expand into what are two enormous markets with significant growth opportunities. South America and Asia - two continents with buoyant property and import/export markets - are also firmly set within our sights as part of moneycorp’s long-term international expansion strategy.

The roll out of Moneycorp Bank will also be a major catalyst for our plans for international growth into European markets, allowing us to hold deposits in multiple currencies, service the payment needs of corporate and private clients overseas, and offer a full range of FX risk management solutions.

The big topic of the moment for international companies is of course Brexit; the triggering of Article 50, and more significantly, the implications of either a “hard” or “soft” exit from the European Union. Our hunger for sustainable growth remains unchanged following the Brexit result, and this includes our approach towards expansion overseas. Pre-referendum we went through careful contingency planning to prepare for either outcome, and we are now in a good place to continually adapt and eventually implement this plan as the negotiating landscape develops in 2017.

In the event of a “hard” Brexit, we are fully prepared to continue servicing our clients across the globe and pursue our long-term growth ambitions without disruption. Our sights stretch far and wide, and we are aiming to expand into two-to-three new territories each year.

In terms of competition, where does the company stand globally?

Moneycorp is one of the UK’s leading foreign exchange providers and our vision is to be the first choice for international payments. What makes us stand out from the competition is a simple but effective corporate philosophy - if we serve our clients well, success will follow. Like any other business, that means setting the standards for the industry by delivering the best and most comprehensive specialist services to our customers.

What do you anticipate for the future of product and technology innovation?

Foreign exchange is already a technology-led industry and the demand for faster, fully-integrated, autonomous solutions is more important than ever. Customers want a better online experience and moneycorp’s international payments platform and mobile app have been designed with this in mind.

When it comes to product offerings, transparency is key. Customers are more knowledgeable about the market than ever before, which means they want to see clear pricing structures with no hidden fees. Both product and technology innovation must go hand-in-hand to create an all-round more comprehensive offering for customers. Not only do businesses and individuals want to be able to make safe and secure transactions, 24 hours a day, seven days a week, but they also want to exchange a range of currencies with ease via a choice of payment methods.