A Forex trader without the right trading attitude will end up donating continuously to the Broker.
You will agree with me that donating ones trading equity to Brokers due to bad trading habits can leave behind a painful experience.
Especially if the source of trading account fund is a loan, savings, salary or gift.
Making money as a trader does not only start with how to Forex trade.
It starts with how to develop the right successful trading habits.
Basically, the following are key trading habits that you need as you journey in the Forex trading world.
Show me a Forex trader that has discipline, follows a set rules or guidelines for his or her trade entries or exits and I will tell you that is a goal-getter.
With some level of discipline, you will trade more like a robot, and emotional triggers will not have effect on you.
Maintaining discipline while trading Forex cannot be over-emphasized.
However, being disciplined comes with it’s cost as price may not trigger your trade entry or exit on some occasion.
When you apply discipline to your trades, you will allow your system to run its course, in as much as you believe in your system.
Recording your trades and having trading plans are other habits that you need when it comes to discipline.
A patient dog, they say, eats the fattest bone.
The habit of being patient is very essential to traders.
Impatient traders sometimes miss opportunities that may earn them big reward.
Patience is one virtue that is sacrosanct to trading.
Trade opportunities does not occur all the time.
In fact, good trade entry opportunities emerge once or twice a day depending on the currency pair or asset you are looking at.
If you are not patient enough, you may miss the opportunity for that day. Bear in mind that there is always another day.
If you have a good strategy, but you are impatient in nature, your strategy may become useless.
At the end of it all, you may conclude that trading is not for you, primarily due to your impatience.
“Low self-esteem is like driving through life with your hand brake on.” — Maxwell Maltz.
Building your confidence as a trader is what will keep you in the trading career for long.
However, handling your losses as a trader requires confidence on your part.
Your level of confidence as a trader depends on how much you know and how much practice or research you have made.
It takes constant reading of texts, fundamental news articles on Forex trading.
One of my favorite reads is on Elliot wave principle.
Back-testing and demo-testing of old and current strategies also form an foundational part of confidence building.
Having confidence on your self (self-confidence) is one side of the story.
Maintaining confidence on your system or strategy is another side of the coin (if only you have a strategy).
If your strategy says “Buy” and you are not confident enough, you may end up not clicking the Buy button.
Holding on to a running profitable trade requires some level of confidence most of the time.
Price retracement happen most of the time which sometimes make traders close their running trades only for price to continue in the direction of the closed trade.
Having Realistic Targets:
This very habit is what separates professional traders from scammers or gamblers.
You must have seen some investment proposals where you have profit proposals like this “I will turn your $100 account to $1,000 within 24 hours!”.
This is unrealistic and such habits most often leads to loss of the trading account.
Of a truth, 5 to 10 percent account profit or gain on a monthly basis is the ideal target that you should set for yourself.
I remember a trader who tried to turn a $50 account to $200 during Non Farm Payroll NFP news release while trading XAUUSD.
This very trader placed multiple Buy pending orders of 0.05 lot size on Gold shortly before the news release.
“I am going to cash out big on Gold today” he shouted.
Few seconds after NFP news release, price whipsawed and triggered his pending order.
Instead of going North, XAUUSD price went South after NFP news release.
At the end of the first one minute of NFP that day, he was already owing his Broker, as his account balance reads -$1.63.
Setting realistic targets is one habit that can not be over-emphasized to traders.
Over-trading using big lot size that outweighs the account balance is the “number one killer” of trading accounts.