There are number of reasons retail traders fail to succeed trading forex. One of them is that they trade from habits and not by following a system. They always want to win big. Amateur traders always dream to make millions from a tiny investment but it’s “mission impossible” and best left for Hollywood. They switch their trading decisions and trading strategy so often (I doubt if they have any strategy at all).
On the other hand, successful traders do the exact opposite of what amateur traders do. They stick to their plans and don’t panic after losing few trades. There are a few other qualities of a professional and successful trader.
So, what are the secrets of a successful trader? Okay, let’s reveal the top 7 secrets of a successful trader below:
Choosing a compatible Forex Broker:
A good forex broker plays an important role in forex trading. Professional traders compare the brokers among the regulated ones and pick one that suits their trading style. They prioritize the trading environment and trading cost choosing a broker. Lower costs are always welcome. Best Forex Brokers is an example of a comparison site with reviews of the top forex brokers.
They know themselves and know exactly what to do and how:
A professional trader is always confident. They know exactly what type of trader they are and don’t care about what other people think or say. They are an independent thinker. Most of the time they do the exact opposite of what most retail traders do. Because those 90% traders (retail traders) are losers.
They read the chart and economy rather than be influenced by others. They are always in the driver’s seat, don’t expect a big win every day and know trading sometimes can be boring.
There is no right or wrong in their dictionary:
There is no good market or bad market. It’s you who might take a good or bad trading decision. There is no big difference between a winning trade and a losing trade to the professional traders. They don’t freak out in the face of some losing trades. They accept the fact that there is nothing absolute in forex trading but a game of probability. They count only how much money the make when they’re right and how much they lose when they’re wrong. So, it's money management that they focus on.
All trades are equal to them. No emotion attached to a particular trade. They never have regrets from a trade, learning no matter the result. They don’t have greed and know fewer trades make them more profit. Greed act as a robber, it will rob your profit away and even the entire trading account. Less is more in forex trading.
No compromising on money and trade management:
90% retail traders lose money because they don’t follow money management, not because they don’t know trading. 71% of their trades are actually closed in profit yet they lose money overall because when they lose, they lose big due to a lack of money management.
Every professional and successful trader knows their risk before they trade. They don’t jump on every trade no matter how easy that trade looks unless it’s worth the risk. They use less leverage on their trades. They don’t allow their losses to grow like amateur traders do. They know the price they want to engage and the trading size but before that, they set their stop price of that trade. Under any circumstance, they never ever move their stop losses further from when they enter the trade. They decide before holding the position if they are going to take the expected volume in one trade or divided by multiple trades.
A trading plan for any situation:
“If you fail to plan, you are planning to fail.” - Benjamin Franklin
Having no trading plan is one of the greatest mistake of an amateur trader. Forex trading is like running a normal business, you wouldn’t start a business without a plan.
Successful traders spend the weekend as homework, they make a pre-plan for every possible upcoming situation. They don’t just jump on and decide! No matter what happens they stick to the plan and stay disciplined.
Having a trading journal:
A trade journal is a must have requirement and 84% of successful forex traders keep a journal of their trading. They record everything related to their trading. They come back after a certain period and look into them. Self-assessment is very important to them.
I often laugh when I open a 2 year old journal and see how immature I was! And I am sure I will do the same after another two years on present journals.
Success is a process, not a project. You can see all the mistakes you do at a glance by keeping a journal, which will help you to develop the ability of more mental control and discipline to execute trades based on your strategy, not your habits.
Higher time frame:
Successful traders use higher time frames to trade and spent less time on trading. They might look into another time frame to check or confirm the situation but stick to their regular timeframe to trade. Trades come to them; they don’t look for them.
On the other hand, amateur retail traders try to hunt trades on every possible time frame. They jump on it without any planning and mess up.
You might ask yourself ‘Am I talented enough to become successful in forex trading?’
To be honest, your talent is irrelevant to forex trading. Success in forex trading is never about how talented you are, it’s about practice and discipline.
So, now you know the top 7 secrets of a professional and successful trader. You can practice them and become successful too! Share your experience and things that you avoided to improve your trading skill by commenting below.
About the Auther:
Shaon Bhuiya is a price action trader, Fund Manager, Coach and Forex Blogger. He is highly regarded for his unique ‘Core Price Action’ trading strategy. Learn more about him here at FxTemper. Follow him at Twitter @Shaon77