We forex traders like to look up to those that have come before us and been successful. We do this for a number of reasons. These individuals have been successful, so they clearly know what they are doing. This means that they are great people to learn from. They also have the experience to know what is a good thing to do and what is a not so good thing to do. They are the people that we wish to copy, to learn from, and to be just like. So we are going to be looking at some of the things that professional traders do in order to be successful, and why you should be doing the same things.
Sticking to the Plan
One of the things that any professional or even successful trader will tell you is that you need to stick to the plan. There is no point in having a trading plan in place if you are not going to be following it. Even breaking the plan in a tiny way is basically meaning that you are placing bad trades. They will tell you that you need to stick to it and you need to stay disciplined. That is one of the most important steps to becoming a successful trader.
Don’t Be Afraid to Take Risks
Contrary to the above, a lot of traders will tell you that if you want to be successful then you will need to take risks. This does not, however, mean that you should be placing more trades or placing larger trades. Those are bad risks and will put your account in danger each time you do it. Instead, the sort of risks that they are referring to are things like taking trades on an asset that you do not usually trade. So if you are an avid EURUSD trader but a great trade opportunity comes up on the GBPUSD pair, then there is no harm in trading that pair, as long as the entry requirements and all other aspects of your trading plan are still being met. Do not limit yourself to that one pair.
Remove Your Limits
We mentioned this briefly in the above point, but you need to be able to remove or at least expand your limits. Sticking to a single currency pair or asset will greatly limit your opportunities to trade and to be profitable. It is, of course, not a good idea to expand too much. Going from one pair to 100 will put your account in danger as you cannot monitor or fully understand all 100 currencies. Instead, expand slowly, moving from one to two, then two to three, and so forth. You are still expanding your limits, giving yourself more opportunities, but you are doing it in a controlled manner which is exactly what you need to be doing.
Get Into the Right Mindset
Being in the right mindset is vital. In fact, it can make or break a trader. If you believe that you can trade, if you are able to control your emotions, if you know when to take breaks then you can keep your mind in the right place and remain free from the distractions that are around you. If you have the right attitude towards your trading then things like sticking to your trading plan and staying disciplined will be a lot more straightforward and easier to maintain. Those that are not in it with the right attitude will soon find themselves making bad trades or making losses, so it is important that you get the right mindset and then try to remain there.
Know When to Take Breaks
A good trader will not spend all day everyday in front of the monitor. If they did, they would simply burn out and start to make losses. A good trader will know when they need to take breaks. This can be a break when your emotions are starting to build up, or you are simply getting a little tired. There is no wrong time to take a break. Getting out and clearing your mind is paramount to being a successful trader. If you don’t take breaks you will burnout and make losses. So learn when to take them, and even set designated times for breaks if you need to.
Risk control is the foundation of any forex trading strategy. If you do not have a risk management plan in place then you’re setting yourself up for failure. You need to create a risk management plan that has a number of different elements to it. These will include your risk to reward ratio, your stop loss size, take profit sizes, trade sizes and more. These are the foundation of your trading plan, you need to have them in place before you make a trade. Any professional trader will simply laugh at you if you are trading without a plan in place.
Not Always Trading
You do not always need to trade. You do not need to trade every minute or even every day. In fact, some professional traders will go a whole week without putting on a trade. This is often due to the fact that the markets are not in the right condition for the strategy that they wish to trade. They will only trade when the conditions are right and this is something that you should be doing. Do not trade just for the sake of trading. Trade when the setup is actually there. If you trade outside of your strategy it is considered a bad trade, so having patience is key to sticking to this rule. Have patience and wait for the right trade to come and certainly don’t try to force it.
Not Focusing on Wins and Losses
Advertised all over the internet are those strategies that are promising you a 99% win rate. These are just not realistic and are playing on the strings of those that are there to simply make money, yet do not fully understand how forex or the markets actually work. Professional traders do not care about how many they win or how many they lose. They are simply interested in the returns. With a proper risk to reward ratio in place, you can be profitable with a 25% win rate. This is what the professionals focus on, being profitable no matter whether they win or lose. Due to this, they do not focus on whether their last time won or lost, and neither should you. Trust your strategy, trust your risk management and you will have a far less stressful time.
Professional forex traders are people that we look up to, yet they do not do anything different to what we should be doing. If we want to be successful traders then we need to mimic some of the things that the professionals are doing. It is easy to do, as they aren’t doing anything magical. There really isn’t an excuse that we can use that will make it acceptable to avoid following them. Stick to some of the actions that we have mentioned above and you will be on your own path to becoming a professional trader at some point in your career.