6 Things Successful Forex Traders Do
What is it that successful Forex traders do that the ones who fail don’t? Why are only about 10% of them successful, and what sets them apart from the others? Firstly, the definition of success needs defining, as it means varying things to different people. For some people the amount of money they make is not the issue, it is all about loving the career. For others, money is the only issue, but if they are not happy in Forex trading they should be looking at some other work.
They Study the Market
Forex trading is not hard work, but learning all about it can be. Before you make your first step into Forex you need to study the markets, learn the in and outs of currency pairs and how to draw key levels. Read about the different strategies and information from experienced traders. The good ones will tell you that trading should be effortless, and if you are having to work hard, something is wrong.
You sometimes just need to let the markets pan out, and sit back and watch what is happening without panicking. And, trying to alter things you have already done.
Successful Forex Traders Do Not Lose
Of course, all traders have losses but the mindset of successful traders does not see it that way. People new to the markets tend to panic when they make a loss and wonder what they did wrong. Most people view things going wrong as something bad, but not successful traders. For them, a loss is something to learn from and looking at what they could have done better.
Thinking in terms of losses will make you do things without thinking them through properly and can then result in an even worse situation.
Losses can help you to learn, and they could still have been the right decision at the time. The markets do not know who you are or when trades are being made. It is not a human that understands these things. Sometimes it will just do things you do not want it to.
If you make a loss in the future, analyze how it happened to see if you can improve your performance. Don’t take it personally though, as even the best of deals can sometimes go wrong.
They Use Price Action
Most successful Forex traders use price action in one way or another. Sometimes they use raw price action and other times it is used to identify key market levels. However it is used, it is an important part of a trading strategy.
Price action gives the traders some idea of where to buy and sell in the market. And, it can strengthen a trading strategy by highlighting areas to watch for potential entries and profit targets.
They Calculate Risks
Successful Forex traders always calculate their risks before trading. You may think this should be an obvious tactic, but there are some failing traders who wish they had looked at the risked involved before they traded.
The problem is that not all traders look at the number of dollars they are risking, and that is a big mistake. Looking at these things in the terms of percentages can cloud the mind to the actual amount involved. Although a percentage and the dollars at risk can amount to the same thing, the way our mind sees them is different. The chance of a 2% loss does not sound great, but if that 2% is $5,000 it sounds a lot more.
They Realize When They Should Walk Away
Knowing when to walk away and not to do a deal just for the sake of it is an attribute that successful traders have. Those that are truly passionate about trading know that this is not an easy thing to do, but sometimes it is the best.
Trading can be a roller coaster of emotions, and when you have had a winning trade the natural tendency is to carry on. However, this is sometimes the best time to walk away for a while. You can let your emotions settle down, and come back refreshed and ready to do more deals. Excitement can lead to bad decisions, and calming down first will help to prevent that from happening.
They Don’t Give Up
Successful traders do not focus on wins and losses as the rest of us might, and they never give up. You only fail as a Forex trader, or anything else, if you admit defeat. People who have a passion for trading will not do this; they will always carry on, which is one of the things that makes them successful.