What Separates the Best Forex Traders?Posted on February 28, 2019 at 05:25 PM CET Forex News
Many people try forex trading, but not everyone becomes a forex trading mogul earning massive profits.
Why is it that some traders manage to be consistently profitable while others are flat broke within a few months? Why do some thrive on the challenges while others feel the pain of every loss?
There are no simple answers to this. However, we can learn from some factors that successful traders have in common.
Some people fail to get the information and education they need to succeed, or they don’t get the right systems in place to help them. Many of these difficulties can be overcome simply by setting off on the right foot early on.
Let’s look at what separates the best forex traders from those who give up on a loss.
The Right Attitude
It takes the experience to become a truly exceptional forex trader. This is something you can only get if you approach forex with the right attitude from the very beginning. Having the right mental outlook is just as important as technical know-how.
Dedication: You need to be dedicated. At first, in learning the way the market operates and, subsequently, how you go about making successful trades. If you want to be able to make the most profitable trades, you’ll need to be patient and follow a disciplined approach.
Stay Up to Date-
Keep informed Make it a habit to study the financial news so you know what is happening in currency markets and globally. While the forex market is often highly volatile, macro-economic conditions tend to drive long term trends in currencies (see here for a brief overview). Trends can be more predictable than inter-day price fluctuations. Day trading is notoriously difficult.
Most online brokerages provide news feeds as well as their own analysis. Setting up your own news alerts from the major financial publications (Reuters, Bloomberg, as well as specialized forex news sites) can be helpful.
Staying informed can give you an edge, but many beginners neglect this aspect of currency trading and focus almost entirely on charts and technical indicators. Whilst technical analysis is important in forex, the release of economic data can throw even the best technical strategies.
A disciplined and methodical approach: Having the confidence to follow a strategy in a consistent manner.
Willingness to accept and learn from mistakes: Successful traders critically analyze any losses and revise their strategy where appropriate.
The Right Software
Forex software is powerful, but it should never be a substitute for knowledge from an experienced trader.
Bots Some forex robots are inefficient and don’t keep up to date with the developing market. Some forex software will work if the trader controls it appropriately, setting the controls to match the market.
Automated tools can be very useful when used correctly. However, the internet is full of people who’ve made bad trading decisions, whining about their trading software when it was their lack of knowledge or judgment that caused them to fail.
If you find yourself relying completely on your software to make trading decisions, ultimately you should ask yourself if you’d be better off taking a hands-off approach and using a managed system such as copy trading.
If you take these tips into account, you will be well on your way to becoming a successful forex trader. There will still be plenty to learn. You never really stop learning. But you will have done more than most people who consider starting currency trading.