Forex trading is an isolated endeavor.
Or, that is what the majority of traders think.
This article will take a close look at whether Forex trading can be completed in a group, and what the benefits of a potential cooperation would be.
Note: we would love to hear from you whether you have traded in a group.
1 – If yes, please write down below what your experiences were with this process?
2 – If not, please let us know down below what your main reason is not to work in a team?
WHY TRADERS TRADE ALONE
The majority of traders often trade by themselves – regardless of whether they are institutional, bank, fund, or retail traders.
Trading on your own simply makes sense because of various reasons such as:
- Each trader has their own trading plan
- Each trader has a different psychology and their own interpretation of the charts
- Each trader has their own indicators and tools
- Each trader is working from a different location
- Each trader has a different decision-making process
For some traders the benefit of trading Forex is the fact that they can operate independently without the need for an organization. These traders strive for their freedom. This goal makes a lot of sense and is a major motivational factor that drives success.
Another benefit of operating individually is that a trader can only blame him or herself and no one else. You and only you are the main responsible one. A trader does not have to get annoyed at anyone but themselves.
Trading alone is logical and we can observe good reasons and benefits to trade alone. But does the opposite hold true as well?
THE OTHER SIDE OF THE COIN
The first observation is that non-retail traders do not necessarily operate alone, even though they might trade alone. What does that mean?
Trading is not only about trading.
Trading is a business that encompasses various fields of discipline such as risk management, money management, evaluations, strategies, trade management, technical analysis, research, testing, account management, reading & learning, etc.
Retail traders need to have a wide range of skills to be able to successfully implement all of these items. Non-retail traders have the advantage that they can fully focus on trading itself without necessarily having to be active in many of the other fields. They have an organization that is supporting them in risk, research, and analysis.
Retail traders have the tough job of implementing all of those tasks and roles by themselves. It is a difficult task to evaluate your own performance and be your own boss. Or it is tempting to break the risk management if you are the only one who knows about it… It is easy to set research aside if nobody is measuring your activities.
The point is this: it requires a ton of discipline to implement all of the tasks consistently. An organization can have obvious benefits for traders such as: time and cost efficiency and better management and consistency.
FIELDS OF COOPERATION
First of all, Winners Edge Trading recognizes that traders need support. That is why Winners Edge Trading offers strategies, technical analysis, research, trade management, risk management, testing, etc. We help traders with the above tasks via our mentoring program, success 2014 program and our live trading room. Check out the benefits of a trading room here.
Second of all, traders can also create their own teams. Basically, traders can set up cooperation with other individual/independent traders as to achieve similar benefits of an organization. Independent traders can help each other in various ways.
They can complete research separately and agree to share their results with the team. Traders can create and test strategies together. Traders may complete evaluations as well. Traders can even share their views of technical analysis with each other via internet. Last but not least, traders could even trade live together or go as far as trading one account. Obviously the last step needs a lot of trust, which brings us to the next point.
GROUP DYNAMIC AND REQUIREMENTS
The internet offers the unique ability to create a global team. In this regard, geography and time zones do not matter anymore. A trading team could literally cover the entire span of the 24-hour Forex market. Best of all, communication can be quick and cheap between opposite sides of the world.
One word of caution with regard to the size of the groups: teams which consist of 2, 3, 4 or 5 members often have the best harmony and most efficiency. When a group has more than 5, the size could become difficult to manage and benefits of the teamwork might diminish.
Obviously, the trust between the group members needs to be very high. Traders must be able to rely and count on each other. Without a stable foundation of trust, team work amongst traders would not work out. This trust does not happen from one day to another, but needs to grow over time.
For certain tasks it is irrelevant whether a team of traders have the same trading plan, strategy, tools or indicators. For instance, when doing new research or completing evaluations, these tasks can be completed without having any overlap in their outlook and tactics used while trading.
This changes when a trading team is actually completing technical analysis together. There is more benefit to working together when a majority of the tools are the same. The need for a unified trading plan becomes even more necessary if a group of traders are trading together. Only when traders have the same trading plan and are implementing the same tactics would trading together have mutual benefit to all parties involved.
How a team should be formed is something that will go naturally. Having a diverse team, even in level of experience, helps all members see elements from a different perspective and can strengthen the team performance. They key factor is commitment and dedication. Obviously as the team is a voluntary group, members need to trust each other and therefore provide accountability.
Have you tried working in teams? Let us know down below!
Thanks for sharing and reading and wish you Happy Trading!