What are the main characteristics of the best forex traders?
When I first started trading currencies, I spent a lot of time in forex forums and forex chat rooms. I spent 80% of my forex trading resources looking for that perfect forex system that would make me money every day, every trade and forever. It was easy to be side tracked with the latest and greatest forex systems out there.Every day a new system would be introduced in the forex forums. Before I knew it, I was spending more time chatting in forex forums than actually trading the forex market.
It did not take long for the fruits of my labor to be realized with my trading account being reduced to zero. Talking to some better forex traders than I , I came to the following conclusions to the reason why some forex traders are better than others.
1. Good Forex Traders are Properly Capitalized.
A forex trader with an account size of $1000 trading full lots or even mini lots, is on track to losing his forex trading capital. A lot of forex brokers entice new forex traders with low account opening requirements. Their literature is full of traders who made 1 million dollars trading the forex market. The only information they do not give is that out of their 1000 clients only 1 of them made that 1 million dollars, the rest were so undercapitalized they lost their accounts and had to add more money.
2. Good Forex Traders Treat Forex Trading as a Business
Reading forex charts can be addictive. Before long the forex trader finds himself trying to read those beautiful charts and making forex systems, they forget that forex trading is not a hobby. A good forex trader has set up his trading as a business like any other. Tracking your profits and loses as well as your tax requirements is essential for the forex trader. Keeping proper records of your business is essential. Otherwise, you are just gambling. Actually some gamblers do take gambling like a business, so why don’t forex traders do the same.
3. Good Forex Traders Trade When There is An Opportunity
I feel sad when I look at my earlier accounts and see that 80% of my loses occurred after I had decided to enter the market when my trading plan did not require me to. Intuition is not a very good attribute for forex traders with a trading plan. Chasing the market is the biggest crime a forex trader can make but it happens to be the most common problem with traders of all levels. Wait patiently for you trading opportunity and only trade then.
4. Good Forex Traders Hate RiskI
used to believe that forex trading is a risky undertaking until, I discovered that when I stopped risking trades, I made more money.A proper trading methodology is meant to reduce the forex trader’s risk to tolerable levels. It is not wise to risk trades for the sake of it.The first few months of a traders life should be spent on trying to reduce their trading risk to levels where they can consistently make profits and predict the outcomes of their trades. If you have a trading plan that tells you all the possible outcomes of your trades, then you are on the way to becoming a risk free forex trader.
Of course there are other attributes that great forex traders have but these were the ones I worked on for sometime. I am still working on them and the beauty of forex trading is that you can only get better the more you practice the proper methods of forex trading.