This is one of an occasional series of guest posts by John Forman, Senior Foreign Exchange Analyst for the IFR Markets group of Thomson Reuters and author of The Essentials of Trading. John is a 20+ year veteran of the financial markets. He holds an MBA from the University of Maryland and a BS from the University of Rhode Island, both concentrating in Finance.

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One of the complaints I hear fairly frequently about trading, especially for those who do it actively on a short-term basis, is how lonely it can be and how easily one can feel they are going it alone. Trading, after all, is in many ways a very individual pursuit for folks in the retail trading realm.

Things are different on the trading desks of banks and institutions. If you haven’t seen the trading floor of a place like Goldman Sachs then think about rows of desks with traders sitting side-by-side. They are generally grouped by market so that information and ideas can easily flow back and forth between the traders, analysts, and salespeople (the latter are responsible for customer-facing activities). Even in places that are smaller operations where there aren’t the big trading rooms, like many hedge funds, interaction and exchange between and among the various participants is built in. In other words, no trader operates in isolation.

I personally don’t work for a company which actually does trading. We instead focus on market intelligence. The bottom line, though, is that we provide the readers of our analysis and commentary with stuff which is aimed to be actionable. Even here we are set up in a trading room type of environment to facilitate information and idea exchange. I cover forex, but I’m surrounded by bond market analysts and frequently talk with them about things impacting both our markets.

Now individual traders not trading from prop shops and the like don’t have the ability to sit in a room full of other traders and have that kind of interaction. Up to this point they have been restricted to exchanges in chat rooms and on forums, but that comes with considerable drawbacks, not the least of which is the inability to know if others are legit. With the introduction of Currensee, however, forex traders now have the ability to interact with each other in a real collaborative way, knowing exactly what the others in their group are doing.

You can work together
Some folks will no doubt be thinking they don’t really want to know what others are doing or thinking. I can appreciate that view as I have long found that reading other people’s commentary muddles my own analysis. That said, however, I have also found that in some cases I have meshed really well with someone else in terms of technical trading and between us we came up with really good trading ideas.

The trick in developing a good trading collaboration is finding people who compliment your style of trading. Obviously they have to trade what you do in the timeframe you trade. Someone focused on day trading EUR/USD isn’t going to do much for someone who swing trades the JPY pairs. Beyond that, though, intermixing different ways of approaching the market can be very rewarding.

For example, you may be very good at fundamental analysis but not so great with technicals. Working with someone who has that complementary skill set could produce a very profitable relationship.

Also, some folks are fantastic market analysts. They can tell you exactly where the market is going on a consistent basis. Maybe they have a problem sticking to a trading plan, though. If they were joined with people who are very disciplined, but not so strong with finding good trading ideas they could developing a good partnership.

Plus the learning
And of course there’s the educational angle in all this. It should be obvious to everyone how much more quickly one can develop their trading abilities by watching others in action. It could be as simple as picking up a new way of trading based on Bollinger Bands or price action. Maybe it’s the placement of stops. Perhaps it’s a way of playing the market in a shorter or longer time frame. There’s always something new to learn in the markets for those looking to do so.

Think of collaborative trading as being like a school study group. You each bring something different to the table in terms of knowledge, perspective, and experience. That feeds into the learning of everyone in the group.

So don’t be shy!
Get in there and find out what trading collaboratively is all about. Take advantage of the tools and methods of interaction Currensee offers now and will be offering in the future. Make new friends and meet fellow traders from around the world. The more you do that the better your chances will be of finding someone (or several of them) with whom you can talk about the markets and trading and work together toward better trading for you both.

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Be sure to read the full risk disclosure before trading Forex. Please note that Forex trading involves significant risk of loss. It is not suitable for all investors and you should make sure you understand the risks involved before trading. Performance, strategies and charts shown are not necessarily predictive of any particular result. And, as always, past performance is no indication of future results.