Direct Access Trading

If you day trade long enough, you will come across the term DAT, or direct access trading. Direct access trading is a system that allows an investor to trade directly with another investor, market maker, or specialist without the interjection of a broker. Most day traders use direct access trading because of the speed in which currencies can be bought or sold.

This brings us back to the fundamentals of Forex. Your goal as a trader is to determine the trend of the currencies you are comparing. When do you buy an appreciating currency? When do you see a depreciating one?

Your goal, again, is to make a profit – and your task is not only to sense when to buy and sell, but also to recognize patterns and understand that in Forex, as in life, everything – yes everything – is a cycle. Whatever rises must converge. There is a crest – and trough - to every wave. With direct access trading and the right front end software, you will be able to gauge these cyclical patterns and get to a deeper understanding of the currencies you are following. Understanding market psychology is key to trading on the foreign exchange. There are many factors that can contribute to a currency's rise and fall and I will get into these shortly.