What is a day in the life of a strategic currency trader really like??  

A while ago, Marc had brought in some “guest speakers” to work with us over at ForexMentorPro.com.  

One of them was Jay Hawk, a retired investment bank forex trader.  

He shared his experiences with us and wrote the following piece.  

It is a very cool insight into what it means to be a strategic currency trader, what their day to day activities are like, and what makes them successful.  Thanks to Jay Hawk for this wonderful article.

Being a strategic currency trader means that you are not involved in market-making or short-term scalping, but instead you are looking to take advantage of longer-term moves in currency exchange rates. Some fund managers, most private currency speculators and a small number of bank forex traders (primarily working for investment banks) fall into this category. Furthermore, most strategic traders will probably be entering and exiting positions based on technical analysis of forex market price action, although fundamental analysis of the economic prospects of the countries involved in the currency pair of interest might also enter into their trade decision-making process.

Perhaps the most important thing a strategic trader needs to stay in business over the long term is a trade plan with a proven track record of profitability. While almost as many trade plans exist as do strategic traders, most successful trade plans will produce trade signals along with a series of objective entry and exit points for the strategic trader to follow. Developing and sticking to such a trade plan gives a strategic trader an edge and promotes the discipline needed to make consistent profits trading forex. This also helps place the trader in a situation where they manage their risk prudently.

Once they have developed a viable trade plan, the day of most strategic traders will start by checking whether any of their outstanding orders have been triggered overnight, since that will determine what they should focus on and the forex market trades around the clock. If any of the trader’s positions have been closed overnight, then reviewing what has been done could provide useful feedback on how to improve their trade plan. If new positions have been entered, then the trader will need to manage any risk created by those positions.

Next, they will want to check whether their trade plan’s technical trade signals indicate it is time or about time to take a new position. If so, then they will need to assess how large a risk they can afford to take on the trade. Usually this position sizing will be done in an objective way, perhaps as a fixed percentage of their portfolio size or as a fixed trade amount. Sticking to an objective risk-determining technique prevents the trader from taking more risk on the trade than they can stomach if the position goes against them.

Once they know what to do, how much risk to take, and what position size that implies, the strategic trader can then place entry orders at appropriate levels after checking where support and resistance can currently be found in the market. They would typically do this by reviewing a short-term price chart to see where price action has recently reversed and gone the other way.

Now that pending trades have been planned and orders entered, the strategic trader would then sit back and wait for execution of these orders to put them into the anticipated position. Once they receive notification of trade-entry order execution, they will then need to watch or place orders in the market at take-profit and stop-loss levels determined by their trade plan. Such position-closing orders will be entered on a one-cancels-the-other basis to avoid both being executed in volatile trading. This allows the trader to objectively assess what level of reward they are hoping to achieve for what level of prospective loss or risk which will determine their all-important risk/reward ratio on the trade, which they naturally wish to minimize.

Finally, as the strategic trader readies to stop trading for the day, they would ensure that any necessary orders are placed with an overnight forex broker for outstanding or desired positions. Sometimes, strategic traders dealing in larger amounts will request overnight calls from brokers or banks when the market approaches their action levels, so that they can better assess the market at the time, rather than having orders executed automatically. Nevertheless, this is a luxury that smaller strategic traders generally do not enjoy, and should not expect.

Here is an example of Fundamental analysis and strategic currency trading from one of our pro trading course students, Judith W:  CLICK HERE

By: Omar Eltoukhy

GOLDTRADEMASTER.COM

Strategic Currency Trader