By Cliff Clarke

Administrator DS Community
www.dscommunity.biz

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DAILY TRADING ROUTINE OF A PROFESSIONAL TRADER

A professional Forex trader has a systematical way he approaches the market daily. Forex trading
is a profession and like every other profession, it has a defined principle it operate with. Just
understanding a simple successful trading strategy does not really guarantee profit, this is
because success in the FX market is a combination of other important trading factors. One of
such factor is building a good psychology to avoid the so called awesome return popularly
hyped about this market. The Forex market must be approached like every other investment
vehicle. It is not true that the Forex market carries more risk; we are the one that raised the level
of risk. You may decide to trade the market with very low risk and make it look exactly like the
stock market. The choice has always been ours.

The market requires that you access research information and FX data analysis daily to
dynamically update your knowledge about the direction currencies are heading for. Many young
traders jump into trading immediately without getting well informed about the major market
forces for the day.

Before we take a look at our daily trading routine, lets work on our psychology:

1 WORK ON YOUR TRADING PSYCHOLOGY

1.1 Returns and Expectations

Many of us came into the market with unrealistic expectations. Great returns can only be assured
by the power of compounding in the FX market. Monthly spontaneous returns are not advisable
because they are difficult to maintain and a system built around it will lead to deeper losses as
the month progresses. Growing steadily at an average monthly return of 20-50% ROI is more
stable and can make you very wealthy on the long run. Lets assume you started trading by
January 2007 with N50,000 and you were able to grow at stable 20% return monthly, it means
after 24months, your account balance would be more than N3.9Million. 24months is not a long
time frame really to wait; many will buy a stock and wait for over 5years before it will appreciate
to 200% that is if it ever gets there. N50,000 returning N3.9million is more than 7,800% ROI in
just two years. I only trade stock because I wanted to build asset not for returns. Stocks are
better ways to save or keep your money. If you are a student at the DS Community, you will
understand and agree with me that 20% is not really a successful return for a professional trader
with the kind of information he has about the market.

1.2 Health Factor

It is usually advised that you should stay away from the market if you are sick or not in the right
mood to trade. You will need your entire God given senses alert to trade properly. Trading under
ill health can affect your returns. Also trading with fear always leads to losses, you will need a lot
of confidence to trade the FX market. The first step to developing confidence in the market is
knowing how to effectively manage your risk. With a good understanding of risk management,
you will trade a Billion naira just the way you will trade N5,000 capital. It is a matter of principle
not volume. The risk management principle is the same at all levels. Warren Buffett took a trade
some years ago and when the trade went to stop loss, it took out $206million (N25Billion) from
his account. Just imagine what the total capital he trades with in the Forex market will look like.
Two months after that loss he made $420million (N54Billion) from another position. Another
world leading FX trader, George Soros, made $1Billion (N125Billion) within 2 weeks from a single
position and the Bank of England almost crashed after that massive take home profit. The point I
am trying to raise here is that risk is not a factor of your trading capital. Many persons tell me

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that they cant imagine themselves trading with N10,000,000, it is just too risky for them. They
say the money is too large to manage in the FX market. My question is, what principle are they
using to manage their small funds? If they are truly managing these small funds effectively then
increasing the volume will not affect the risk level. If you are the type that doesnt like high risk,
then go for very low risk trading principle. Every student at the DS Community should be very
conversant with risk management because it is the number one thing I teach every intending
Forex trader. Once you understand how to apply the risk management calculations and concepts
you will be bound to trade without fear and with profit daily. The market will be interesting and
peaceful to you.

1.3 Trading Plan or System

The next important confident booster is your trading plan or system. Every trader must have a
mechanical way of trading the market, though the plan may require some personal judgment. A
mechanical trading plan is a system that automatically monitors price movement and looks for a
regular sequence that leads to Buy and Sell signals. This means you do less analysis but trade
more. Your only responsibility is to validate or verify how reliable the signals developed by the
trading system are. Most approved profitable trading systems have at least a 60/100 winning
odds. It means for every 100 trades you make, you are bound to win 60% of it. Without proper
FX money management, you may still end up as a failure. After studying the short course on FX
Risk Management, you will understand why.

If you are able to build your trading psychology around these two important trading principles
good risk management and a profitable trading plan or system your confidence in the market
will be very high.

IMPORTANT:

The volume or size of your trading portfolio can also affect your trading psychology. Trading with
very little capital will make you trade erratically and with high risk, this is because you will have
little or no regard for defined trading principles. When you trade with tight risk management, you
may not return the kind of hyped monthly gains the media is saying Forex trading gives. You will
discover that your returns are modest but very stable. Most people come into the market
expecting over 300% ROI monthly. 300% is possible but too risky and a trading plan built around
it, will lead to massive losses over time.
If you are trading with little capital, what I will advise is that you pay more attention to the %
return not the dollar value because someday you will be trading with millions. Whatever you learn
now with your little is what counts with your much. Therefore apply the right principle
irrespective of the size of your capital.

STEP BY STEP ROUTINE OF A PROFESSIONAL TRADER

STEP ONE: BOOST YOUR MOOD.

Before I turn on my laptop to trade, I normally speak positively or prophetically to all my trades
for the day. I simply say:

I am going to trade profitably today and gain more knowledge about the market. I will
see all profitable trading opportunities and I will trade them. I am in control. Amen!

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This may sound funny if you are not the type that is spiritually inclined. Saying those simple
words before trading can greatly impact your confidence and add a better dimension to your
trading experience. I have been saying those words for over 5years now before trading. It has
given me an edge over the market. I have the absolute faith that everyday I trade; I should
make an aggregate profit. Be a little spiritual, there is nothing wrong about adding faith to your
trades.

STEP TWO: READ THROUGH MARKET ANALYSIS FROM INDEPENDENT FX RESEARCH

ORGANISATION AND BANKS.

Understanding the prevailing market sentiment will greatly help you pick out the major trades
daily. FX trading requires some level of sophistication and access to vital market information.
Banks and other trading organizations publishes research papers, commentary and market
outlook daily to guide traders. Studying this information before trading will help prepare you for
the major market move for the day. Also reading independent FX research documents daily over
several years will help mould you into a well informed and better professional in this market.

There are several websites that publish research information and also run commentary daily.
Though these data may be very boring and uninteresting at the initial stage, but after several
weeks of constantly forcing and tuning your mind to study them, you will start understanding
how important these researches are. There is no major move in the market that was not
mentioned by an FX research organization before it happens. The move of EUR/USD from 1.2600
to 1.3600 was a major headline on several research papers published by some FX research
organizations. Depending on too many websites that publish FX research information can make
the whole process tiresome and very slow. I use only one website for all my FX Research updates
and events. The site URL is www.actionforex.com. It is the best website for fast updated FX
research information. It has a lot of information for traders but there are a few you should
concentrate on daily and this will be the ones I will treat here.

INFORMATION TO LOOK OUT FOR DAILY:

1. ACTION INSIGHT
This section contains analysis reports produced by the actionforex.com in-house FX analyst team.
Reports are updated twice a day. Their Forex Daily Technical Reports are updated during
European opens while the Forex Mid-Day Technical Reports are updated during US opens. It
helps the trader understand the major news release that is most likely to move the market.
Members of the DS Trading community that use the news breakout system do ask; how does one
know the news release that is most likely to move the market? Action insight will tell you that.
Not all news move the market, only those anticipated by a majority of traders move the market.
Today CPI can be a major market mover and could offer no impact on the market some other
day. This is because there is always a set of news releases investors are looking out for to
confirm their speculation and this information could be anything from new home sales to rate
hike. Holding a stereotypic stand on what news will move the market is completely wrong. Any
news release can move the market depending on its relevance for the moment.

How to Get to the Action Insight Page

The action insight sub section is the website may caption. It is found on the home page of the
website. Take a look at the site screen shut I made to help us locate where it could be found. I
circled the important spots. Also note that the URL was www.actionforex.com

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2. DAILY FUNDAMENTAL ANALYSIS AND REPORTS

Fundamental analysis refers to the study of the core underlying elements that influence the
economy of a particular entity. Fundamental analysis, including Forex fundamental analysis, is a
method of study that attempts to predict price action and market trends by analyzing economic
indicators, government policy and societal factors (to name just a few elements) within a
business cycle framework.

Forex fundamental analysis can be used to forecast economic conditions very effectively. But
Forex fundamental analysis may not necessarily forecast exact market prices. Forecasting models
in Forex fundamental analysis are as numerous and varied as the traders and market buffs that
create them. Two people can look at the exact same data and come up with two completely
different conclusions about how the market will be influenced by it. Therefore is it important that
before casting yourself into a particular mold regarding any aspect of market analysis, you study
the fundamentals and see how they best fit your trading style and expectations.

For Forex traders, the fundamentals are everything that makes a country tick. From interest rates
and central bank policy to natural disasters, the fundamentals are a dynamic mix of distinct
plans, erratic behaviors and unforeseen events. Therefore, it is best to get a handle on the most
influential contributors to this diverse mix than it is to formulate a comprehensive list of all "The
Forex Fundamentals."

This section: Forex Forecast and Analysis - Forex Fundamental Analysis Reports focuses on Forex
market and world economy. Reports are contributed by external analysts.

How to get to the Daily Fundamental Reports and Analysis

The fundamental reports can also be access from the home page of the actionforx.com website.
Please see the screen shut below:

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3. ECONOMIC DATA OR NEWS RELEASE

Trading without a prior knowledge of a news release can mar your trading system. A better
understanding of how to trade during news release is very important. I normally close out all my
trades very close to the time a major news is about been release and I re-enter once the news is
out. A position already doing very well can be wiped out during news time. It is wise you record
the time for all your news release; this should guide you as you trade. To avoid trading the
erratic influence on technical trading systems, you should trade from about 6pm 7am daily.
There is lighter influence of news release on the market during this time frame. Technical trading
strategies work best on quiet market. I make more money during this period (6pm 7am) than
during the regular trading hours (8am 6pm). Test the advance R-S system during this time and
you will be shocked by the returns. Even the Bollinger Range Bound Trading system gives almost
95% odds during this time frame. I discovered this some years ago when I had a student that
works with the Nigeria Power Holding Company (previously NEPA). This student comes to my
office for training every evening after work. After lecture, he usually browse through about 12

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currency pairs for any signal from the BRB System, he will place all trades and sets targets for
the position close to the 7SMA and stops to a fixed 30pips. He usually places these trades at
about 7pm 9pm in my office. He started with a capital of $200 and after 2weeks, his total
account balance was over $400.

How to get to the Daily Economic Data

The daily economic data can be access directly from the home page of actionforex.com. Take a
look at the site snap shut to find out where to locate the daily economic data.

The economic data can be access from the home page, to go to the current day eco data, you
will need to click on the valid date and another page will open with the details of the news
releases for the day. Take a look at the snap short of a typical eco data and I will explain later
how it affects your trades for the day.

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Lets explain some items on the table how they affect our trades:

GMT:
The GMT column represents the time the news release will be out. You need to add 1 hour to the
GMT time to convert it to Nigerian time. The Canadian Rate Decision for May was slated to be
out by 13:00GMT and this will be 2pm in Nigerian time.

CCY:
The CCY is short for currency. The CCY represents the currency of the economy that has the
news release.

All other items on the table are well covered on the write up on the news breakout system. The
details can be found on the FX Desk in the www.dscommunity.biz website.

VERY IMPORTANT
Always exit all intra-day trades few minutes before the release of major economic data. The best
and recommended system for trading during news releases is the news breakout system. The news
breakout system can be found at the DS Community FX Desk on trading strategies.

STEP THREE: START TRADING

With all the information gathered from action Forex, you can now approach the market properly.
Never trade with a profitable trading system. Without a successful trading system, you will never
be comfortable with the Forex market. Even though, you have spent 10years in the market, you
will still be hovering around the market with constant reloading of your account. Trading systems
when perfectly followed will always give you an aggregate positive return by the close of every
trading month.

You should get a good calculator close by whenever you are trading. I calculate my
%commitment and trading volume to exact value. Make sure your entire trades tally with the risk
level you have chosen for your trades.

STEP FOUR: DOCUMENT ALL YOUR TRADES

Many of us dont document our trades. Documentation helps you avoid errors and also get your
properly organized. Get an exercise book and record all your daily profits and losses. Also write
down the reason why you took your trades. Write down the full details of the position like
currency pair, position, entry price, stop loss etc and finally the outcome of the trade. At the
close of the day, give a general comment about the summary of all your trades.

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Conclusion:

For further information, review, suggestions and questions on this write up, please send all your
mails to damadsuite@gmail.com or visit www.dscommunity.biz. Join the DS Current 1month FX
mentoring program. It is a daily to-and-fro analysis from our trading desk to the young trader on
a particular trading strategy. This program was designed to enable young trader master a
particular trading system. Therefore every month we are covering a single trading system. Send
us a mail if you would like to receive more details of our monthly FX mentoring program.