Table of Contents
Chapter 1: Educating Yourself About the Forex Market
Chapter 2: Identifying Good Forex Trading Opportunities
Chapter 3: Developing Your Forex Trading Strategy
Chapter 4: Managing Forex Trading Risk
Chapter 5: Become a Successful Forex Trader
Navigate This Page
Chapter 5: Characteristics of a Successful Forex Trader
– Discipline
– Optimistic Approach
Chapter 5: Characteristics of a Successful Forex Trader
A successful forex trader is not necessarily one who follows all the financial newspapers diligently or crunches numbers for breakfast. There are no special powers that make a good forex trader. Any one can achieve success in forex trading provided he has or develops certain basic characteristics. Of these, discipline and optimism are the most important attributes.
Discipline
Smart investors never lose sight of their original investment goals no matter what upheaval occurs in the market. This helps them keep their trade on an even keel without giving in to panic or greed. Often, panicked traders pour money into a losing trade hoping for a turnaround, only to end up increasing their losses. On the other hand, others give in to temptation and add to winning positions at the end of the curve only to see their profits lowered significantly when the market reverses.
The best way to curb losses in forex is to never ignore your stop loss. When you set your stop loss at a particular level make sure you do it after sufficient research. Once you have entered a trade, trust your own earlier judgment and stick to the stop loss levels no matter how attractive the markets appear.
Don’t let yourself be tempted to pour in more capital. Forex trading must be conducted purely with risk capital. The risks are so high that it is simply not worthwhile to invest more than you can afford to lose in this market.
You should always avoid complex strategies even if they are working wonders for others. Their investment goals and risk capacity may be very different from yours. When you opt for a complex strategy, it is far more difficult to understand which part of it is going wrong and this means that you can’t rectify the problem easily. Stick to your simple strategy until you have gained enough experience to experiment with more complex ones.
Even the best forex traders take in losses regularly. So if your trades aren’t as successful as you would like them to be, then remember, you are in good company. The important thing is to learn from your mistakes. Bounce back from losses and understand what went wrong to avoid the same mistake in future trades.
Avoid thinking too much about profits or losses all the time. The results can be disheartening sometimes. Just make sure you are on track for your investment goals and keep a positive outlook.
Don’t let the lack of huge gains discourage you. Very few forex traders see supernormal gains. The other successful investors just make profits steadily. Put your faith in your research and judgment and be patient.
An optimistic attitude, a disciplined approach, knowledge, and the right tools make the winning formula for forex trading. Although the lure of huge gains attracts many investors to forex trading, only the few who follow basic investment rules, become successful in this market.