There is a difference between a professional trader and an amateur trader. Amatuers trade on emotions, while professionals avoid it. Hedge fund managers are professionals, learn from them if you want to follow in their footsteps. This is because a hedge fund manager must present decent outcomes to the investors to keep obtaining more investments for their particular funds. Hedge fund managers use an established strategy that convinces their clients.
$20,000 is as important to us as $20 million would be to a hedge fund, as we are much poorer as individual traders. More vital is the $20,000 account in our name. Trading involves our own hard earned money. Other individuals funds is most likely what a hedge fund manager is dealing with.
Most of the hedge fund managers follow a step by step process to develop their forex trading strategies. There is no reason why should we as individual traders also not follow that step by step process to develop our own trading strategies. If you want to invest and can't afford to lose money, then choose a guaranteed annuity and stay out of the stock market all together.
Each trader needs to develop one's own ability to become better and do well. Traders that are successful are the best teachers. You will succeed by using your methodology. This phased attack of putting together your own trading plans. This is how hedge fund managers like to operate. For the long term this will be beneficial to you.
Detail your trading methodology. All hedge fund managers follow their own personal methodology. Some traders use fundamental analysis. Other traders use technical analysis.
Determine how you trade first, and what is suitable for you. Do you trade stocks during the day? What are you after, swing trades or position trades?
There are a few basic concepts to trading that you must figure out from the beginning, are you a trader based on fundamentals, technicals or a little of both? Hedge fund managers always develop trading rules and code them. The consequences of emotional trading may be averted.
It's important to avoid trading that is based on emotions as it is a high risk. Make your forex system rule based and mechanical with clear cut steps that you can follow in order to make your trading as unemotional as possible.
You need to decide whether you want to be a news trader or you will use technical indicators in your trading. You need to pick a few currency pairs and become master of their behavior. It's important to pick a select few currency pairs and stick to them.
Every currency pair requires a different trading strategy to make pips. You must comprehend this. Some trading strategies are effective when trading one currency pair, but are ineffective on others. Part 2 of this article shows how hedge fund managers further improve their trading strategy.
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