It is entirely possible for an individual to start trading on the foreign exchange Sydney without actually going through any kind of formal training. In other words, you can teach yourself how to trade and profit from the volatility of the forex market. However, this does not mean that attending formal training is not going to make your life as a trader any easier.
Attending such training programmes will allow you to see the forex Sydney from angles and perspectives that you may not achieve yourself. For instance, if you study by yourself then you may never learn the difference between realised and unrealised profits before it is too late and you lose a lot of money. Consider the following.
Realised and Unrealised Profits
When you open a trade on the foreign exchange Sydney and it moves in the direction that you wanted it to then you may think that you have gained profits but you have not.
It is important to know that up until you actually close your position in a profitable position, you only have unrealised profits which can disappear very quickly. Therefore, as long as your position is still open, you only have unrealised profits but when your position is closed you realise your profits.
Difference between Entries and Exits
Most traders have strategies and plans for entering into trades on the foreign exchange Sydney but very few have solid strategies for exiting the market. The result is that when the rates do not move as they wanted them to, they are forced to make decisions which are not well thought out and planned.
This is the biggest difference between entries and exits i.e. even though they both need specific strategies most people only plan for the former and forget the latter. Here are some examples of what happens when exit strategies are skewed or absent.
Overextending a Position for More
Without an exit strategy, traders can get greedy or overconfident about a particular trend and try to squeeze out as many pips from their trades on the foreign exchange Sydney as they can.
Effectively, they overextend their positions by leaving them open for too long. This leaves their positions susceptible to trend retracements and turnarounds which means that profits are lost or losses are incurred.
Underselling a Position out Of Fear
The other side of not having an exit strategy is that the trader ends up closing his position too soon on the foreign exchange Sydney and, hence, losing out on profits that could have been within reasonable reach.
This usually happens because of uncertainty and fear because the trader does not have a logical reason to fall back onto for justification for leaving the position open longer.
Using Special Orders for Protection
Exit strategies usually involve the use of special orders such as stop losses, trailing stops, and take profit orders. These orders can not only help a trader ensure profits on the foreign exchange Sydney but also prevent losses from being too damaging to his account.