10 Habits of Successful Forex Traders
I have been in this business for over a decade and have been fortunate enough to be mentored by and get to know some very powerful and successful forex traders. If you are new to the world of forex trading, or simply interested in continuing to develop your craft as a trader, check out the list of habits of successful forex traders below.
1. Planning the Trade:
Great traders don’t just pull the trigger on an instinct: they take the time to understand each and every trade. This includes what they want to trade, and what the setup, stop and take profit will look like.
2. Executing the Trade:
All too often new traders spend time making a plan, only to change their mind at the last second. They are then forced to witness as the planned trade wins, while the last-minute trade loses. Executing the planned trade is just as vital as making a plan in the first place.
3. Doing Homework:
I am yet to meet a great trader who trades on gut instinct. It takes time and preparation and in-depth study of every instrument a great trader wants to pursue. Simply looking at moving charts while the market is active, without understanding what is going on might save time. But in the end, it leaves the trader much less prepared to profit from the market, or able to make great decisions. Taking the time to study the markets before trading time starts is essential to success
In my experience, it is the traders that trade LESS instruments that tend to make more money. Yup, it’s better to be an expert on a small set of pairs rather than decent at trading dozens. This might sound counter-intuitive, but there are only so many hours in the day. Traders that spend that time making the very most out of a few instruments tend to do much better than traders that have a dozen pairs on the MT4.
5. Regular Schedule:
It can be difficult to work a full-time job alongside trading, but it can be done. I worked as a full-time manager, whilst running an online retail business and trading at regular hours. Seeing the markets on a regular, structured schedule gives you more “harmony” with what happens during the week. It is much more successful than trying to squeeze in random hours “here and there” which usually results in making pressured trades that aren’t thought through.
6. Consistency in Strategy:
The best traders I know use the same methods over and over again, rather than system-hopping methods and always looking for the next best thing. Almost invariably, trading comes down to the trader and how they approach the system, much more than the system itself. You can’t determine the success of a system by trying it half-heartedly before quickly moving on to something different.
7. Making Your Own Decisions:
Learning and discussing the trades with others is great. But I draw the line at the decision making process for taking trades. Great traders make their own decisions. Someone who copies trades from other neither learns, nor grows in my opinion. There are managed accounts for people which are a great way to go if you don’t want to do the trading. But if you want to be a trader, you are going to have to make the decisions, and great traders do this consistently.
8. Humble Gainers, Responsible Losers:
Winning and losing are part of trading. Great traders do not get overly confident when they win, and they do not blame others or their system for their losses.
9. Setting Realistic Expectations:
Setting goals and expectations that are realistic and achievable takes a lot of the pressure off the trader. It allows them to make better decisions without worrying about hitting a home run every week.
10. Always Developing Their Craft:
This is one thing that has seemed so universal in the great traders I have known. Each and every one of them is always learning something new about their craft of trading forex. It is the love of the craft that keeps you engaged during the slow or challenging times in the markets.
This list is not exhaustive, but I think the points listed here are important and common among great traders. I hope it helps new traders consider some issues they may not have thought about, and maybe even some experienced traders remember the basics that they have integrated into their own lives without even thinking about now.
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