A professional trader (in securities trading) is someone who engaged in trading as a commercial business. In other words, professional traders may be self-employed individuals who work from home, or they may be brokers or securities experts who operate trading platforms like those found on the NYSE and other stock exchanges. In order to become a professional trader, you need to have at least a college degree in one of the fields related to trading. Such fields as mathematics, physics, computer science, economics, or any other field that deals with the market, are good options for a trader’s major. As an added benefit, these degrees will also help you find a job, should you decide to venture into the world of trading as a career.
The most common training received by professional traders is in the field of fundamental or technical analysis. This is because this is what professional traders use to evaluate the market and make decisions about trades and exchanges. Learning to use the tools of fundamental analysis requires a certain amount of background in the theories of supply and demand, inflation, forex risk, etc. These concepts are important to understand before entering the world of trading. However, there are a number of tools used in modern day trading which must also be learned, including how to interpret a price chart, how to identify entry and exit points for trading, how to read support and resistance levels on a price chart, and how to determine technical indicators like rising and falling action on a price chart.
In order to obtain the professional trader status (that is, tax benefits), traders must engage in a practice of international trading. This means that trading in the US market is not allowed unless you are trading for an international mutual fund, and that you need to report any gains and losses to the IRS as quickly as possible. Some Professional Trader have chosen to work within their means, saving the maximum amount of taxes that they can possibly get. However, even if a trader chooses to trade within his means, he or she should still report all trades to the IRS, especially if they have a profitable day.
Because of the importance of taxes, the Internal Revenue Service (IRS) has created several different forms that traders can complete and file with the IRS. These include Schedule H, which is used for filing federal tax year end reports; Schedule E, which is used for filing state income tax returns; and Schedule F, which is used for filing federal tax returns. In addition to using these forms, professional traders can also get a self-certification letter from the IRS that states that trading activities are allowable under the laws as long as the trader maintains an account with a qualified bank. Professional traders may need to get an agent to help them file the necessary paperwork, though this is not usually required.
Many professional forex trading strategies focus on one method of trading, such as trend trading, day trading, or scalp trading. These methods have different advantages and disadvantages. For example, trend trading requires that a trader remain invested in a particular currency for a certain period of time. Day trading involves selling a currency pair immediately after it crosses the psychologically applicable break of its support level. Finally, scalp trading requires that traders be physically present when the currency pair they plan to trade is bought low and sold high.
When it comes to learning new techniques and strategies, it’s best to stick to what you know and what works for you. Some professional forex traders find that introducing a new strategy through an article or series of articles posted at their website is very helpful. Others prefer to learn about a trading technique by attending live trading events. Still others enjoy discussing ideas with other people over the Internet who share their experiences.
Professional forex traders who are serious about building their wealth often decide to hire a financial advisor. These advisors can provide advice concerning investment strategies, as well as tax year planning. Tax year planning is especially important for short-term investors. If the investor knows he will be investing for the short term, he should look into the tax implications of his decisions. Investing for the long-term is always a better choice, but that decision depends on the professional trader’s personal circumstances.
Professional traders know that they can only make trades that earn them a profit if they know all of the rules of the game. They don’t like to lose money because that makes them feel as if they aren’t making enough. Some traders make mistakes, but they learn from those mistakes and continue to grow and develop their trading skills.
