Hey, do you want to know some secrets of profitable forex traders?
Most of the time, profitable forex traders keep their secrets to themselves for personal gain and so that they don’t lose their “edge”. In my experience this line of thinking is more the stuff of novels and scandals than the truth, with the exception of some proprietary methods held by people who can afford a bit (or a lot in some cases) of money to invest in the research/algorithms etc. The research and algorithm secrets do exist, but you don’t need to know them to be profitable in trading. Most “secrets” are just ploys to get you to buy things. Which brings me to one of my first secrets of profitable forex traders:
Profitable trading is much more about you than your system!
Even traders with profitable systems can easily lose money. Profitable trading is a craft that relies on your ability to make good decisions. The system you use is merely a tool to aid you. While having excellent tools in a cohesive system is important, developing your ability to make good decisions is even more important.
Buying Another System Probably Isn’t Going To Make You Profitable:
Although it is important to have a profitable system to work with, too many traders think they can solve their problems by trying another system. From my teaching experience, I have learned that people fall into two groups: those that work hard and persevere with a system, and those that try something half-heartedly until they see a result they don’t like and then move on to something else. Many of these people end up giving up on trading altogether when they financially can’t take the pain any more. It takes time to actually learn a good system and use it in different markets. This takes more than a couple of months and even the best systems in the world aren’t profitable all the time.
Trade Less To Make More:
The more time you spend on homework and proper analysis, the less time is left for taking random trades all over the place. More time spent on preparing usually yields more profitable trades than trying to rack up a bunch of trades from “possible” signals. Being more selective with the trades you take will increase your understanding of the market and decrease your chances of getting repeated losses during a period where the market(s) are not working with your approach. It’s a dynamic environment, and I have yet to see an approach that can be used 24/5.
Stop Trading So Many Instruments:
Much like the last, this one of the secrets of successful forex traders forces you to really get to know the markets you are dealing with. Imagine you are introduced to 50 people in a room, and your goal is to make a lasting friendship that is rewarding for the long-term. You’re not going to bounce around the room from person to person, spending little to no time with them; eliminating some options, before devoting your time to a select number of candiates is much more likely to enable you to make a lasting friendship. I personally only ever focus on a maximum of 4 instruments in any given day. I rarely – if ever – take a trade on more than 2 in a single day, and usually end up very satisfied with the results. I’m not saying only ever trade 1 or 2 instruments, but there are plenty of profitable traders out there that make bank doing just that.
Train Yourself to Spot Mistakes in Yourself:
This sounds easier said than done and takes training and time in the market to be able to accomplish. If you cannot determine whether you just won on a bad setup or lost on a good setup, then you have some work to do. Losing a good setup should mean that you take the same trade setup again in the future, and winning on a bad setup should be recognized as a mistake that requires adjustment. Work on yourself and your ability to discern good and bad decisions in trading, and start seeing the results to match.
In my experience these are some of the most successful secrets of profitable forex traders.
Stay hungry for good information, keep working on making great decisions, learn to take full responsibility for your bad trades, and your dreams of profitable trading are probably a little closer than you think.
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