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Learn the art of forex trading

Professional Traders DMCC offers live trading platforms and training to beginners and experts that make trading in currencies a cinch.

Daily news, macro and micro-economic updates, among other factors, govern the movement of global currencies, and its trade. If you pay a little heed and learn the ropes of the game, you can invest and earn a comfortable second income through currency trading. To demystify the process and learn more, we caught up with Sushant Buttan, Chief Executive Officer, Professional Traders DMCC. Read on to know how can you invest and make the most of it. Excerpts:

Give our readers a perspective on forex trading.
Foreign exchange markets are made up of banks, commercial companies, central banks, investment management firms, hedge funds, and retail forex brokers and investors. The forex market is considered to be the largest financial market in the world recording a daily volume of over $5 trillion dollars.

Since the currency markets are large and liquid, they are believed to be the most efficient financial markets. It is important to realise that the foreign exchange market is not a single exchange, but is constructed of a global network of computers that connects participants from all parts of the world. Traders utilise technical analysis tools and algorithms to determine which currencies will outperform the US dollar. The analysis is based primarily on momentum characteristics, such as the price behaviour of a particular currency compared to the US dollar over several time periods. Major trading is done on one or more G-10 currencies, which include the US dollar (USD), Canadian dollar (CAD), Japanese yen (JPY), Australian dollar (AUD), New Zealand dollar (NZD), British pound (GBP), Euro (EUR), Swiss franc (CHF), Swedish krona (SEK), and Norwegian krone (NOK), as well as currencies outside the G-10.
 
Unlike other forms of trading, say in equities, forex trade happens in pairs. Help us understand the dynamics of this exchange.
Foreign exchange (forex or FX) pairs have unique behaviours and traits that can be observed and studied over time. This helps us to better understand the nature of their price movements. For instance, volatility in a forex pair, captured by using the standard deviation of price movements in percentage terms expresses the uniqueness of each pair while revealing the general heartbeat of the FX market. While shared patterns become apparent, each pair's volatility shows distinct characteristics that can be utilised by forex traders. Money management discipline is employed by successful traders to generate entry/exit points. Traders also use a sophisticated risk management system that takes into account the price, size and volatility of currency pairs traded. Risk is monitored on a daily basis as protecting your capital is the most important part of the trading business.

Traders use a multi-strategy approach, something like Trend Following 30 per cent, Break-out 40 per cent, and Short-term Swing Trading 30 per cent. These trading strategies are based on different trading styles that traders have across the world.
 
A lot of people are intimidated by trading and numbers, and look for some handholding. What services do you offer in this regard?
Professional Traders Group was set up in 2007 with a 40 per cent stake by the Dubai Government, via the Dubai Multi Commodities Centre (DMCC). It was the first professional trading floor in the Middle East and continues to be a sector leader in the region. Professional Traders Group has an international team of highly experienced and specialised professionals who work round the clock to implement its mission and build a thriving community of professional traders with our trading infrastructure, training and funding. We believe that it is possible to be successful in trading even if you don't have any finance background. Traders on our floor come from diverse backgrounds, such as students, stay-at-home mothers, working professionals from different industries including like oil and gas, shipping, consumer products, and more.

We offer various beginner programmes like 'Jumpstart' where you can understand how to trade with absolutely no prior experience of the financial markets. We also have advanced training for traders who want to make trading their career. These programmes are held under the guidance of actual traders with real trading experience.
 
Which are the most frequently traded pairs?
The most frequently traded pairs are called the 'majors' and consist of the EUR/USD (euro dollar), USD/JPY (dollar yen), GBP/USD (British pound), USD/CAD (Canadian dollar), USD/CHF (Swiss franc), AUD/USD (Australian dollar).
 
Historically, which pair has given the maximum returns?
It is difficult to say which pair gives the maximum returns because each pair has its own characteristics and is affected over time by that country's economic conditions. A country's foreign exchange rate provides a window to its economic stability, which is why it is constantly watched and analysed.

Exchange rates play a vital role in a country's level of trade, which is critical to every free market economy in the world. As a result, people tend to specialise in currencies that they are familiar with and as a result, you can make profits from almost any currency pair as long as you are tracking the fundamental and economic factors for that currency. However, from a liquidity point of view, the EUR/USD (euro dollar) is the most widely traded currency pair and has the highest number of traders trading the currency pair. This is followed by the USD/JPY (dollar yen). This is because the Eurozone and the Japanese economies are very large and these currencies are traded against the US dollar, which represents the United States - the world's largest economy.
 
How many registered traders do you have? Do you have a live trading floor?
We are the first live trading floor in the region and have traders from all over the world trading live accounts on our floor. In the financial markets trading industry, people often hear stories of people failing at trading - largely due to poor risk management and gambler's mentality.

Professional Trading is all about trading systematically with risk and money management tools, which help in achieving success. We are constantly striving for trading excellence, achieving and surpassing targets, adapting and evolving with changing landscapes, executing with precision and perfection. We achieve this through constant training and knowledge upgradation, which helps our traders evolve their trading techniques, and not blame external factors for intermittent shortcomings.
 
What platforms do you use for trading? And how do you manage risk?
We offer dedicated trading desks to enable traders with complete systems for trading the Global markets. Our trading floor provides Reuters and Bloomberg terminals, CNBC and RAN Squawk audio for economic data releases and breaking news. Traders can choose their preferred trading platforms like TT Xtrader or STS on the lease line with Stellar, CQG, Easy Screen, and Jtrader. We support all standard charting packages such as CQG, Esignal, and Futuresource.

Our dedicated line to our clearer in London provides a fast stable connection with a fast round trip time.
 
Do you also allow trade in other asset classes such as equities, indices, bonds, commodities, CFDs, etc?
We offer our traders the ability to trade across all asset classes. Traders can trade in international markets across all time zones and across different asset classes. We do this through our team of dedicated broker partners across the world. If a trader wants to trade commodities like gold, wheat, coffee or even milk, we can set the trader up with the most cost effective brokers and have them ready to trade in a day or two. We are able to offer traders the lowest brokerage commission rates in the business, as we have negotiated high-volume discounts with the global clearing and broking firms. These low commissions enable our floor traders to become more profitable in the markets as they incur significantly lower commissions costs.

We also offer high-margin leverage for intra-day Futures, CFD and SPOT FX trading. Our Eurex Trader Development Programme and the CME New Trader Incentive Programme helps to reduce trading costs even further.
 
What is the minimum threshold investment required? Also tell us about the sundry charges involved and the commission charged by Professional Traders Group.
There is no minimum threshold of capital required to start trading. However, we recommend traders to start trading with at least $25,000. This is to ensure that traders can handle the ups and downs of the markets and that they have enough capital to trade and hold positions to make profitable trades. As we are not brokers, we do not charge commissions over and above what the broker charges.

We rent out trading desks on our trading floor at varying costs depending on what services the trader wishes to use. We have very attractive prices for beginner traders.
 
Why is forex trading more popular in the region than other traditional forms of investing, such as bonds, equities, commodities, etc?
Forex trading is very popular because it is easier to follow one or two currency pairs as compared to tracking hundreds of stocks. For the stock market, a trader has to track multiple companies and their financial results over and above the economic factors. This makes picking the right stocks very difficult because of all the volume of data that you need to constantly keep aware of. As far as bonds and commodities go, they are very popular for trading as well.
 
What advice would you give to a complete novice?
Novice traders have to follow simple rules for trading. This is similar to playing a new game. When you want to learn to play chess, you learn the rules of chess and then play according to the rules of the game. You cannot simply discount the rules because you are new.

In trading too, you need to learn the rules of trading and simply follow the rules. We spend a great deal of time and effort training novice traders about these rules. Once the new trader learns the rules, he or she has to ensure that the rules are actually followed during trading. Most novice traders who lose money in the markets are the ones that are careless and do not follow these rules. Trading rules are basically set up to help protect your trading capital from losses. We teach novice traders Risk Management principles, Money Management rules alongside Mind management models.

Human psychology and how our minds operate during trading is a very important part of being able to trade successfully.

Do you offer free demo accounts?
All the brokers we partner with offer demo accounts and it is very important to trade through demo accounts for a while before starting to trade with real money.

Demo trading gives you an opportunity to experience the live action of the markets and to test out all your trading strategies before you start trading a live account.
 
Is there anything else that you would like to add?
With a multimillion-dollar corpus, we fund talented traders that join our trading floor. Funding is available for trading all products on global markets. Our funding programme is based on in-house funding as well as models with global financial firms that are keen on funding traders from all over the world. All traders on our floor have exclusive access to our Smart-Trade Dashboards.

Trading signals are generated based on sophisticated computer algorithms designed over years of trading experience and millions of dollars in development costs. Traders are able to take quick trading decisions based on our intelligent dashboards we provide when you rent a trading desk on our floor.
 
-suneeti@khaleejtimes.com