What characteristics a person should have, if he wants to be a successful Forex trader? Check whether you have these characteristics in you and whether it is worth for you to enter the Forex market. If your personality does not show certain, clear predispositions to it, then you are most likely to lose in the Forex market, rather that win.
Just read the suggestions listed below. It is the collection of characteristics of perfect traders. Then, think twice whether you feel it sounds like you. If yes - you can start learning about markets, trading, charts and earning in Forex.
How to be a Successful Trader in Forex?
Control your emotions.
Forex is the market which brings on loads of emotions: those good ones, but also the ones that can destroy you. You should never allow room for euphoria or total despair. You must stay cool-headed and never play under strong emotions. Free yourself from emotion and nervousness. The chart of your emotions should look like a straight line with no fluctuations.
If you are overemotional person and you're not able to keep your nerves under control - leave this business sector! There are a lot of earning opportunities on the Internet. Everyone does not have to be a trader.
People who quickly lose their motivation and have character flaws should stay away from Forex! If you constantly fail to meet deadlines, you don't like to learn and don't enjoy spending time in front of the computer - you won't be an effective Forex trader.
Just give it up!
Push yourself towards the success.
A good trader must strive for success. Nobody is going to motivate you out here. No one is going to encourage you, give you pats on the back or cheer you up. You have to be able to motivate yourself, constantly better your strategy and appreciate your good job.
Set stop-losses for every trade
Always stay safe by using stop-loss function. Stop loss will effectively protect you from sudden fluctuations on the market. Especially when the chart is not going in the direction you expected. The lack of stop-loss is called gambling. And you are not a gambler.
Develop a trading plan and always adhere to it.
At the beginning of your trading, set up a specific trading plan and stick to it!. There are professionals who can help you to prepare a good trading plan.
Make decisions quickly.
Forex is the market of short and quick decisions. If you tend to analyse every move for half a year then you'd never do it. You have to be confident, cool-headed, disciplined end extremely consistent.
Don't risk more than 2% of your margin per single trade.
The risk is good, but the protection of your funds is more important. Never risk more than 2% of your capital for a single trade.
Keep your emotions separate from trading.
No matter what happens, keep your emotions away from the market. Did you argue with your wife? Do not play! Did your child get your angry? Do not play! Are you in the state of maximum happiness and joy? Do not play! Emotions destroy traders and their funds.
Never trade to compensate for your losses.
If you lost on a single trade - it's bad, but just cut this thought off. Your life goes on. Losses are part of this business. You should never move on to the next trade with a thought: 'I will make up for it', I will get it back in a second', 'I have to get to the market to recoup my losses'. Never do it! You must forget about the loss, take a deep breath and play with a clear, cool head.
Only trade when you feel it's the right moment.
If you are not sure about your trade or you are playing on the spur of the moment- don't play! It's better to wait for the right trade.
Learn & Practice
Continuously learn about Forex and trading. Make use of forex indexes, internet courses, online workshops, live trades and follow traders. Read books and newspapers about this business sector. A good trader never stops learning. The market constantly changes, so you have to stay up to date.
Invest what you can bear
One of the best tips for any new trader is to start with really small amounts and only increase the capacity of your account with your profit. You don't have to invest a large amount to earn profit - you can maximise your investment, however small it is. By starting out small, you minimise the risk of heavy losses when large volumes of cash are involved.
Start with a single currency pair
If you are only starting, don't go jumping from market to market, or from currency to currency. Learn Forex trading on a single currency pair, for example, EUR/USD and start adding new ones with time. If you can't handle trading on 1 pair of currencies, you wouldn't handle any other ones either.
It may be better to choose one which uses the currency of your nation, or one which is widely traded. This will make it easier for you to learn Forex.
Do Not Overtrade on a Demo Account
Demo account on Forex never brings on the same emotions like live account on which you play with real funds. Do not overtrade on demo account, because that may give you a false picture of the game. If you want to become a trader, you should not use a demo account for longer than few months. Use it just enough to get to know indexes, rules, etc. Longer you play on a demo account, more difficult it will be for you to get over the shock on a real account.
Don't be afraid of losses, every trader had them.
Losses in Forex are something absolutely normal. You will close some deals with loss, and some with profit. You should not be afraid to lose or panic when it happens. Cool mind and realization that it's impossible to avoid the loss is essential. Just play to generally finish with gain. You have to be able to accept the failure.