Knowing what novice traders lack with regards to trading skills is very useful, but it can be even more interesting to know the common qualities forex traders who actually succeeds on the market! Let us analyze what are those qualities that actually make a trader successful and differentiate him from the others.
Knowing How to Lose
In forex trading, nothing is safe. You win on some operations and lose on others; the important thing is that the final balance is positive. Often novice traders focus on earnings and tend to focus on “how to get a good win.” With experience, it becomes clear that it is much more efficient to find “lost property”!
The first step is to realize that losses are inevitable, no one can boast that they only achieve profits, except for a short defined period and again with the help of luck.
Once one has grasped that the discharge is normal in the context of trading, you must learn to manage with good risk management.
The fundamental basis is to use protective stops (Stop Loss), which are automatic preprogrammed orders that cut your position when the loss becomes greater than what you had decided to accept as the maximum risk at the time of you entered the order.
Many beginners are tempted to expect that “it gets better” when a position is losing, while the pros and cash traders accept their losses without flinching and move on to another trade.
Being Able to Resist the Temptation of Over Trading
Available statistics are very clear: These are not the most active forex traders who earn the most money!
Beginners usually want to spend more time trading, hoping to reap maximum benefits, but it is ultimately much more profitable to wait for the right configuration, the right trend or the right signal.
Sometimes you have to be patient when the market does not necessarily lend itself to trading because this is a situation that occurs quite often.
Knowing How to Control Your Emotions
A novice trader is often greatly subject to his emotions. The heady feeling of early gains, the fear of loss, nervousness face transactions that do not go as planned.
The pro trader is the opposite as he is emotionally detached. He trusts his strategy and in his mind, trading is almost an uncorrelated financial impact, whether positive or negative.
In this way, one can master his actions, when thinking logically and responsibly, thus avoiding many errors.
I recall my grandfather, who used to say that you should never immediately respond to a letter (or an email nowadays) that upset you, since you might say things that you will most often later regret. This is pretty much the same thing in trading, you should never trade within the scope of emotion whatsoever and this is easier said than done, even for experienced traders!
Forex traders who are successful generally follow a “trading plan” with high accuracy. This is a personal method, a kind of tutorial to know what to look for, on what basis and what rules to follow when trading is practiced.