If you want to make it to the top as one of the forex industry’s most successful traders, you’ll need to learn to act like one. While being educated is one of the most important steps on the road to success, possessing certain qualities is yet another crucial requirement that can make or break your trading career. If you’re wondering if you have what it takes, take a look at our list below – and don’t worry if you’re missing any of these qualities because we’re here with tips and tricks just in case.
The Best Traders are Disciplined
Self-discipline is a major must-have for forex traders. The fact that you get to be your own boss is just the start, considering that you have to make the choice to get up and get online every single day when you could be sleeping in with nobody to answer to but yourself. Self-discipline also comes in when you want to deviate from your trading plan by making mistakes like risking more money than your plan allows, entering a trade without solid evidence you should do so, overtrading, and so on. Traders need to be able to stay focused and follow their trading plan at all times, or else they put themselves at risk of losing money.
TIP: Here are some of the top tips for practicing self-discipline:
- Set realistic goals and make a plan to meet them
- Practice healthy trading habits
- Hold yourself accountable if you don’t stick to your plan
- Set a schedule around your most productive times
- Figure out what your weaknesses are and find ways to overcome them
Patience is Key
There are a lot of ways that patience can benefit forex traders. To start, you’ll need patience when you’re learning to trade. It’s important that you don’t rush out there and open a trading account too quickly, or else you may not be prepared and you could lose a lot of money. Learning everything step-by-step can be a long process and creating a detailed trading plan can take quite a while as well. Once you start trading, patience can help you to avoid making emotion-based decisions, to wait for the right market setups, entering and exiting positions at the proper time, and so on. Many people have claimed that they feel that trading can be boring, therefore, patience comes in handy when things are moving slowly.
TIP: If you’re generally an impatient person, the first step is realizing that and dealing with some of that anxiety so that it doesn’t spill over into your trading decisions. Try relaxing activities before you trade, like yoga, listening to music, going for a jog, or whatever helps you relax. You can also commit to your trading plan and promise yourself that you will not make trading decisions that don’t fit, even if you’re feeling overly anxious or don’t feel like waiting for the right market setup.
You can’t become a successful trader without pursuing a well-rounded education of everything that has to do with the forex market. Only learning beginner concepts like terminology, simple facts about the market, and how to use a trading platform just aren’t going to cut it. The best traders invest a lot of time into research and education, even those that have been trading for decades. Some of this time is spent researching more complicated strategies and techniques, watching videos, and participating in discussions with traders that have alternative views, and so on. It’s also important to stay up to date on important news that might affect the market, otherwise, you could be left behind. Successful traders always make time to do these things and never assume that they know everything there is to know about trading.
TIP: If you want to get a good trading education, you’ll need to be willing to invest time into research. Fortunately, the internet offers a wide variety of educational websites and content like YouTube videos that focus on all types of trading subjects, from beginner materials to trading psychology, strategies, news, and other important material.
You can’t expect to take up forex trading with little knowledge of the market and become a millionaire in a week. Having unrealistic goals and expectations can be a huge downfall for beginners because many of them get an idea of the results they want to see and feel discouraged or disinterested once they realize how much time they actually need to put into trading to reach those goals. Successful traders set realistic goals and think rationally when trading decisions need to be made.
TIP: The best way to get yourself into this mindset is to set reachable goals that focus on improving your trading abilities, rather than trying to reach a certain dollar amount. Here are a few examples of realistic goals for beginning traders:
- To spend a certain amount of time each day learning about forex topics
- To practice trading on a demo account x hours per week
- To keep a detailed trading journal and review it often
These are just a few examples of positive goals traders can have that will help with self-improvement. If you set your mind to accomplishing these kinds of goals, you will see increases in the amount of profit you bring home because you’ll be a smarter trader at the end of the day.
The Ability to Let Losses Go
The unpredictability of the forex market makes it impossible to avoid losing money every now and then. Even the best forex traders lose money at times. Some traders handle these losses much better than others because they understand that it is unavoidable, but other traders have a hard time letting this go. They might feel like they’ve taken a hit to their ego and try to blame others, they may become depressed, or they might begin to risk even more money in an attempt to gain back what they’ve lost. Meanwhile, professional traders aren’t losing any sleep over their losses and they are able to stay level-headed without deviating from their trading plan when this occurs.
TIP: It’s understandably difficult to lose money, but there are some things you can do if you’re having trouble coping with forex losses. Here are a few ideas that could help:
- Never risk more money than you’re willing to lose so that losses don’t seem like such a big deal
- Remember that coming out with some type of profit is still worth celebrating.
- Review what happened when you lose money and try to diagnose the problem. If it was your fault, think of it as a learning opportunity rather than a personal failure.
- Don’t beat yourself up over losses. Remind yourself that this happens to every trader in the world.
- Never succumb to revenge trading – which is the act of risking larger amounts of money to win back money you’ve just lost.
- If you feel upset every time you lose money, try risking less on each trade.