Page 23 - Ultimate Guide to Currency Trading

Is It Money? Or a Pair?

Currency trading, and trading in general, is best viewed as a kind of sport. The sport of FX trading
requires the viewpoint that the market is a moving force, and that your computer trading terminal is
your playing field. To carry the analogy further, it can help you as a FX trader to think of the cash
balance and open trades in your account as pieces on a chess board. As in chess, each piece moves
differently, and by different amounts. The pawn moves only forward, and one square at a time, while
other pieces have greater power, range, and directional possibilities. Even though each piece is
different, you, while playing the game of chess, have the chance to pick which piece to move, in what
direction, and by how much, all toward the end goal of winning the game.

This is the way that cash and currency pairs work in a trading account when you have the
perspective that you are not trading money: You are in fact moving playing pieces around the chess
board of the computer screen.

Professional trading houses and hedge funds often hire former college competitive
athletes such as football and rugby players to work at their trading desks. Other skills

they look for are knowledge of economics and mathematics. Trading houses also
Essential
look for strong computer skills, including programming and aggressive video-gaming
experience.

Trading for the Score

If you have the idea that you are not trading money, but rather a currency pair, and that you
are trading for the score, then you are starting to have the perspective of a professional trader.
Professionals trade with the idea that they are in it for the score, for something almost like a points
sys-tem. Think of each dollar you gain in your account as a point in a computer game that you are
really good at: play the game with a vengeance, and read the books about the secrets of the game
(how to score higher, etc).

Thinking of your gains as points can go a long way in helping you evaluate your setups, enter
into trades, and know when to exit. When you think of your points competitively as something to
covet, you will not fall in love with a trade or country's currency and overtrade it. The opposite will
hap-pen: You will look for trades that will increase your points, and you will not even consider a trade
that carries too much risk of having your point score erode or go into reverse. You will begin to think
that, unless you know at the end of the day your score will be higher, you will just not play the FX
video game that day.

While it is money in your account, you are actually playing a computer game with FX pairs as
your playing pieces. Too often people are willing to risk money on a losing trade because sometimes
money can seem easy to come by. Believe it or not, Hollywood movies sometimes portray that it is
somehow romantic to lose in the market, or to have risky, wild swings of fortune. Thinking of the
money in your account as your score and the profit that you earn every day as your points will go a