The Tao Of The Wealthy Currency Trader

The word 'tao' literally means 'way,' so what we will talk
about in this article is the way of the wealthy currency
trader.

For clarification, the market to which I am referring is
the foreign exchange (forex) or currency market, which is
the highest volume market in the world.

(Throughout, I will also be using the pronoun 'he,' but
ladies this information applies equally to you as well!)

The single most important thing that a wealthy and
successful currency trader needs is his confidence. It is
this intuitive confidence that will allow him to
continually and reliably reap great rewards from the forex
markets.

The way that I use the word 'confidence' above is different
than the way the word is used in everyday conversation.
For the currency trader, I mean that he is always calm and
collected, he has completely divorced any and all emotion
from his trading activity, he feels good about every trade
he makes and he is supremely confident in his
decision-making abilities.

The ability to divorce his emotions from his trading is of
the utmost importance, and this is a learned skill that
comes from experience trading demo and live accounts over
time.

The wealthy currency trader has a highly developed
intuitive sense; in terms of his trading, this means that
in his mind he is able to visualize and conceptualize the
value of different world currencies in his mind, and he can
see how his trades should play out before he enters them.

The major world currencies that he is concerned with are:

United States Dollar - USD, British Pound - GBP, Swiss
Franc - CHF, Euro - EUR, Canadian Dollar - CAD, Australian
Dollar - AUD, New Zealand Dollar - NZD

By examining certain important economic indicators for a
specific country's currency, he uses his intuitive sense to
create an instinctual or gut feeling of what the value of
that currency should be.

He relies much more on his mind and his instinctual
feelings rather than on overly complicated charts or
indicators.

The wealthy currency trader does not like to lose money,
though he does realize that losing trades are to be
expected because of the inherent risk of the forex market,
and when he does lose money he does not get emotional about
it.

Because he does not like to lose money, he is not a fan of
pure technical analysis probability trading. The idea
behind a purely technical based strategy is that you will
have lots of winning and losing trades, but over time there
will be a greater volume of winning trades than losing ones.

This does not work for the wealthy currency trader, because
he would much rather have winning trades all the time. It
is for this reason that he uses much trepidation in his
decisions about when to place a trade, and he knows that
the best times to place sure-fire winning trades is around
the time of economic indicator releases.

The wealthy currency trader knows that there are around
30-50 economic indicators released every month that have a
significant impact on the exchange rates of major world
currencies. He also knows that immediately prior to the
release of this indicator, the market has already factored
in the estimated value that the indicator SHOULD be
released at. This means that if the figure of the indicator
differs significantly from expectations, this is a
potential trading opportunity and will usually play out to
be a winning trade.

Though his trading strategy is mostly fundamental-based
(studying the underlying economics rather than just the
numbers), he respects technical analysis because it plays
an important role in autotrading.

Forex autotrading systems are becoming more and more
commonplace, and even though the wealthy currency trader
does not frequently use advanced technical analysis in his
own trading decisions, he took many professional trading
courses and has a vast knowledge of the applications of
different indicators.

The wealthy currency trader has a mind like a sponge, and
all of the information he has learned about technical
trading shines through in the profitability of his
autotrading systems.

He has an understanding and respect for the power of
leverage. Leverage is a way of trading about 100x more
than the actual capital in the trading account, and he sees
this as a very powerful tool and treats it as such. With a
powerful tool, it is possible to build something grand and
monumental, but it is much easier to use this same tool to
destroy it.

Lastly, the wealthy currency trader treats the forex market
as nothing more than a business. Just as he does not
combine business and pleasure in his social life, he does
not combine emotions with his trading. In his mind, he is
able to block out the currency symbol next to his account
balance, and he sees only a number. If it goes up, great;
if it goes down; great.

Going full circle, he is able to keep emotions out of his
trading because the supreme confidence in his
decision-making skills allow him to rest assured that in
the end he will always come out on top.

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