Today’s financial markets and specifically Forex trade is now accessible to anyone. Thanks to the online trading platforms, and their sophisticated systems, anyone can open a trading account and venture into trading with minimal initial investment. However, not every single trader will achieve a successful trading career. The truth is that many leave the market with disappointment while others manage to make tremendous profits.
The difference between a successful and unsuccessful trader
Why do some traders succeed while others fail? Well, there are several characteristics that successful traders have that have proven to be absolutely essential to excel in trading. While it’s true that a good trade can be life-changing, almost any seasoned trader will tell you that profitable trading doesn’t come from luck but rather skill and strategy. With that said, here are five personality traits that are known to optimize trading performance.
The Forex market is full of temptations, and only the most disciplined traders are equipped to avoid falling into the trap of overtrading. Traders can be fooled by their intuition, which often leads to simple but costly mistakes. Disciplined traders stick to their plan, improving their chances of success. To be clear, discipline doesn’t mean you should use just one trading strategy over and over again. It means knowing when and how to employ the strategy you want to use, making sure you follow it accordingly.
Traders need to know how to wait for the right signal to enter the market. Those who get impatient end up recklessly jumping into bad trades, causing severe losses. If the trading opportunity does not present itself, it is probably best to move on to another task, such as reviewing techniques or writing a trading journal article.
Beware that not all trades are going to work your way. What makes or breaks a trader is the way he reacts to losses. Those who learn from their mistakes can make better decisions over time, while those who give up miss the chance to enter a big trade.
Choosing the trustful broker
Unfortunately, this is the make-it-or-break-it point for many traders. They are losing the money before even figuring out the strategy. When the lucrative Forex market attracts so many traders, the scammers are also giving their best to find their victims. Your priority must be to select the right forex broker if you want to become a member of a successful Forex traders society. A reliable broker will make sure you have all the necessary tools for free educational materials, practicing on a demo account, and impeccable customer support. Only that way can the broker count on long-term relationships with traders and make more money for themselves. Therefore, make sure that reputation and compliance with trading regulations are at the place when going for your future Forex broker. Reviews and Forex trading forums are perfect resources for reliable info.
Have multiple strategies in your trading arsenal. Just because a certain plan worked one day doesn’t mean it’ll work again the next. Since trading is highly dependent on market conditions, adapting to changes is a useful, if not crucial, skill. Don’t be afraid to try something different, as long as you’ve tried it first. But remember, while staying flexible is essential, it can be just as damaging when taken to the extreme. Juggling strategies and trying something new every time you trade will drain your account in no time.
Greed is a trader’s worst enemy. When a trader makes a series of successful trades, they can fall into the trap of overconfidence and start to feel invincible. Instead of closing the trade and walking away with profits, they continue to trade, only stopping when the losses become fatal for their financial situation. Staying modest helps traders secure long-term profits.
Learning technical analysis and market research alone cannot get you very far. Just as important is taking the time to refine these personality traits. Now and then, come back to this list of characteristics and identify the ones you need to work on. Whether you are a seasoned trader or a novice, there is always room for improvement.
Proven techniques to make money on Forex
If you have checked the listed factors mentioned above to become successful on Forex, you are about to think of the strategies. There are many trading strategies, and figuring out every one of them is not possible initially and is not necessary. Here are some basic strategies to have in mind when you are just starting your trading journey.
Making profit with compounding strategy
Compound interest is a fairly straightforward concept to learn. Whenever you get a profit from a winning trade, you keep the profit in your trading account. You keep earning money, and gradually you accumulate interest, the size of your trading account keeps increasing. To subsequently obtain even higher returns on investment, traders usually use this technique. They add their profits to their trading account. For example, a trader speculates with an account of 5,000 € and positions on which 100 € are committed. Once the account has reached 10,000 € thanks to the accumulated interest, the trader will double the size of his trades and thus engage 200 € per transaction to earn twice as much money as initially deposited.
Making profits using a pyramiding technique
This other technique involves taking the profits from trade and adding them to the next position to produce even more profit. It is even possible to use the “unrealized” profits (from non-closed positions) to carry out an intensive pyramid scheme. In this way, if the trades are profitable, the trader can continue to multiply the trades in the market trend by financing the latter thanks to the profits made previously. It works while the market is moving in the right direction. If a position turns against the trader, the pyramid structure collapses. It will usually end up in a loss or breakeven (no loss or gain) if the trader’s money management is rigorous and understanding of leverage is perfect.