What makes successful Forex traders different from the rest of the group? How come only 5% make it top in the forex market? How have these traders traded? While all successful forex traders have their proven forex trading strategies and systems to access and manage their trades, they know that there is something more important to do: focus on improving yourself.
Since the forex broker is the ultimate resource that you can trade with in order to get the trading results you want, you need to make sure that this resource is ready and efficient to perform best in forex trading. Therefore, successful forex traders pay close attention to the following points which illustrate how they approach their forex research.
Treat trading like a business
The best forex traders know that trading is serious business and they place great importance on it considering the key factors that affect all trades. From a forex trading perspective, these factors include: writing a forex trading plan.
Start with an appropriate trading account size. Know the different negotiation costs; Maintain and develop the forex account; and acquire the knowledge, skills and equipment necessary to trade forex.
Control the ego
Business failure can result from emotional reactions directly related to a person’s ego. Being selfish also means not acknowledging your professional mistakes and therefore not learning from them. For example, the ego will chase the forex trader to hold a losing trade instead of taking the right steps to cut losses at the right time.
Be disciplined in all areas
The element that directly affects the bottom line of the Forex trading account is the discipline of trading. The successful forex trader closely follows their trading plan and sticks to it as much as possible (note: even successful traders make mistakes).
Business discipline includes the protection of business capital and the judicious allocation of risk per transaction. Only accept trades that meet risk / reward parameters and are properly designed. For the rest of the time, stay away and don’t force a trade. Reduce losses quickly with pre-set stop loss values. Make a good trade but protect yourself from becoming a loser.
Protect your capital
The serious forex trader treats his trading money very seriously because it allows him to trade. Therefore, the successful forex trader will carefully monitor his capital and ensure that the risk per trade is controlled so that the losses only empty the forex account and not dig a hole in it. This assures the forex trader that his forex business can continue today, tomorrow and into the future.
Don’t marry your professions
The serious forex trader knows that a single trade alone does not determine his trading success. He is fully aware that any trade can lead to a loss and therefore is aware that any emotional attachment to a trade should be removed. While staying disciplined means waiting for the correct trade entries, that waiting and the final trade entry does not force the successful trader to believe he must be right on that trade.
Therefore, when the market goes against the trader and the trader sees prices approaching the stop loss level, the trader fully accepts that losses are a real possibility and does not rationalize further. Compare this behavior to a beginner who is often tempted to push the stop loss further in order to give the trade “more leeway”.
Be realistic, practical and persevering
Being realistic is what sets men apart when trading forex. The successful forex trader does not have a get-rich-quick mindset and knows that it is hard work. Therefore, you treat trading like a business and have the mental toughness to stay in the game for as long as needed.
Persistence is an important asset which is reinforcement by the necessary trading discipline of the trading plan and the personal belief that it is possible to be successful in forex trading. Good forex training and learning from other successful traders are good solutions to the problem.
Know yourself and let others help you
The successful forex trader knows his trading strengths and weaknesses and is not ashamed to ask for help.