Five Important Traits of a Forex Trader
Forex trading is a highly competitive undertaking and there are some key factors which separate the successful from the unsuccessful. Today, we’re going to go through a few key factors to help new and experienced Forex traders alike, up their game.
Discipline and Patience
Successful traders know through their own bitter experience over many years that without strong discipline, their trading capital can’t be preserved, and therefore their chances of trading profitably are reduced.
They know where to set their stops and not to change these based on opinion or anything other than objective analysis. Successful forex traders also know the virtue of patience and the importance of being selective about which trades they execute and to let profitable trades run their course. Unsuccessful traders, on the other hand, are typically less disciplined and more impatient when it comes to trading. They succumb to human emotions, second guessing their analysis and are less strict in their trading & risk management.
It’s important to realise that preserving trading capital is necessary to exist as a trader, and therefore you should be very protective of it. Traders know that any one loss or a series of losses is all part of the trading game, and that for long term trading success, they must ration their trading capital appropriately, only risking a small percentage of their capital on any one trade. Conversely, unsuccessful traders rarely show the same respect for their trading capital and are prone to incur losses which erode or even eradicate their trading capital.
Professional traders treat trading the Forex market as a serious undertaking and like any business, it needs to be adequately funded. Embarking upon any venture without sufficient funds is a recipe for failure and being under capitalised places the trader at a serious disadvantage at the very start. Unsuccessful traders fail to understand this and are too often “blown out” due to inadequate funding.
Operating as a Business
Disciplined traders treat Forex trading as a business and consequently follow a professional approach. After all, imagine a business with no rules, procedures and systems which operates solely on an ad-hoc basis… the chance for success is pretty low. This is contrasted by the approach of many unsuccessful traders who crave the excitement and thrill of forex; trading haphazardly and with inadequate risk management.
Trading is a Long Game
Good traders don’t “throw in the towel” or become discouraged when going through inevitable trading troughs. They understand that losses are a part of Forex trading and it is how they manage these rough patches which is important. It’s crucial not to take trading losses personally. As long as you execute properly and have the appropriate stop loss, losses are just part of the normal trading process. Unsuccessful traders too often can’t see the “forest from the trees” and give in to the pressures of trading troughs, ultimitely to their detriment.