One habit that all the successful forex traders have in common is the craving for learning new things. So, if you want to be a successful trader, you need to be a constant learner. That can be done by reading trading books and blogs, following successful traders and watching webinars.
The FX market is one of the biggest markets in the world and that makes the volatility of this market is so high. As a result of that, the forex market is always changing hence you have to be one step ahead of the forex market.
What is it mean by active trading? Be an active trader mean, doing things that are related to trading. Like
- Setting up a daily routine
- Pre-Market Analysis
- Testing your trading strategy and improve it
- Stay touch with successful traders
- Invest spare time in learning.
These trading activities will contribute to your success as a trader.
In forex trading, managing your trading emotions play a big role in your success as a trader.
The more you can treat winner and losers with the same way, the more consistently you will be able to gain profit from the forex market. If you feel you are emotionally out of control, take a break from trading. Nothing gonna work if you trade for revenge.
Here is the truth, most beginner forex traders want a taste of trading success right way and eventually they ended up blowing their trading accounts.
So, before you even taste the trading success, just taste the market to see – how it moves, how to place a trade, how to manage risk and money.
Pretty much every broker out there offers demo accounts, so open a demo trade account and start small and slowly by practising your trading edge on a demo trading account.
Having a trade journal tells you lots of stories about your trading performance and, above anything else trade journal help you understand your trading mistakes and helps you overcome those problems.
At the end of each week, month or quarter, your forex trading account will be in profit or will be in loss.
Profit or Loss, your next objective is to earn consistence money in the next trading period, right? In this kind of situation, the trade journal becomes your best friend.
It shows the trading mistakes that you made in the previous week or month and helps you overcome those mistake and hopefully, you’ll be able to make a decent gain in the future.
Losses and winner are randomly distributing across the forex market which means out of 10 trades, you can lose 6 out of ten or you can win 6 out of 10.
So you have to trust your trading process keep on trading. Never even measure your trading success based on a single outcome of a trade.
Successful forex traders are always prepared, They are taking some times to get ready for the upcoming events, external factors and even trade opportunities.
To stay ahead of the game, success forex traders make a trading habit of prepare themselves in areas like below,
- Economic Date Releases in the week or month
- Keep eyes on Speakers or maybe Trumps Tweets.
- Keep eyes on central bank interest rates decisions
- Unexpected Events
Let me ask you some question.
What is your trading strategy and what kind of market condition it works?
My answer is – my trading strategy is trend reversal trading strategy and it works when the trends (uptrend or downtrend) is losing momentum and reverse.
If you have a clear answer like this, then great and if you don’t have an answer then my friend you are in series trouble.
Keep mind that forex market is changing its condition from trending to reversal or trending to consolidation. Your strategy may be working on a trending market or in a consolidation market, So make a forex trading habit to filter out markets that suit your trading strategy.
There are 24 currency pairs that you can trade in forex. But the truth is you cannot focus on all of these currency pairs at ones, right?
Many successful forex traders focus in between five to ten currency pairs for most of their trading. Doing so allow them to get a better feel for those currency pairs in terms of trade opportunities and price behaviour.
By reducing the amount of currency pair you trade, your monitoring process has also become very easy to maintain.
one thing that always shocks us about beginner forex traders is that they often give themselves more pain for missing a trade than suffering a loss on a trade.
This happens because of the FOMO – Fear Of Missing Out.
Because of this, newbie traders try to chase the price and get involved in a trade at a bad price, all the time.
They are doing this over and over again, this eventually creates a bad trading habit called Overtrading.
However, successful forex traders know the fact that their job is not to be actively trading all day, Their job is to wait for the right trade opportunities to come along.
Remember that QUALITY OVER QUANTITY.
We are all in this game to make money and hopefully achieve financial freedom. But think in term of money is corrupt our decision-making process because it is impossible to remove our emotions when to come money.
Wealthy traders keep money aside and measure their trading success based on other factors. What other factors?
For me, I have five rules that need to fulfilled before placing any trade. I know that if I am not breaking any of these trading rules each day, the money will simply flow into my trading account.
Forex market is dynamic it is changing always and your trading strategy has to change accordingly.
If the market is trending try trend continuation trade if the market is in a consolidation phrase try a trading strategy that suits in trading ranges.
Also, make sure to manage your trade wisely. Think about for a moment that you are in a profitable trade and all of the sudden news was released. How do you react in a situation like this?
Think about for a moment and let me know in the comment section.
The successful trader never emotionally keep hopes on a single trade. There are willing to close or cut losses on their trade if price action shows a red sign for them.
Do not take it personally if the trade does not go in your direction. At the end what matters is that you followed your trading rules or not.
Make sure to have a forex trading habit to effectively manage your open positions, not to tied up on a single trade.
Lots of people are into the forex trading with the mindset of getting rich quick. But the reality is that forex trading is a marathon, not a sprint.
Gaining the required knowledge and experience takes times, some times years. It is important to not to be too eager to rush your journey as a trader. This could end your trading journey before it has even begun.
So learning how to stay calm and patient in this ever-changing market is a crucial trading habit to master.
Trading psychology is important as the risk management and the trading strategy but the reality is that the mental aspect is the most overlook factor especially when it comes to new forex traders.
If you begin trading in currency to get rich quick or making thousands in your first week, you will only be failed. It is much better to get into the mindset of taking small steps to become a better trader gradually.
Anyone can read the left side of the forex chart. Even a newbie trader can predict that very accurately. We can quickly pick up head and shoulders or double top and bottom long after it formed.
But the money is made by trading those pattern real-time, not the after it formed.
Reading the right side of the market or the part that is not there yet is what makes it possible to trade those pattern in the real-time.
So it is time to break that old trading habit – Don’t look left, instead try to forecast what happens right now act accordingly.
Make sure to have a plan in mind before you dive into the trading each week.
Those traders who don’t have any plan in mind foolishly expose themselves to psychical mistakes that could cost them avoidable trading losses.
Making pre-market preparation each week or day can be as simple as marking important support and resistance or chart patterns and monitor them with a crystal clear plan in mind. This will help you to remove lots of emotional problems.
I have met a lot of beginner forex traders who have been trading for months and years but have yet to determine trading strategies that suit their personality.
If you are new the world of forex trading, Use demo trading to test different strategies and systems. Also, make sure to test the indicators, maybe you will they are useful too.
When you are ok with your trading strategy, make sure to improve it slowly by testing different trading techniques.
Don’t ever think about to switch one strategy to another strategy. That is a bad trading habit that will extend your learning curve.
At the end of each day or week, take some time to review your trading activities.
Ask your self – “Did I follow my trading rules?”, “Did I overtrade?” or “Did I took trades because of emotion?”
By reviewing your trading activities, you can a lot of insightful data about the trading strategy you are trading. Doing so, you can identify the weak point and work on them.
Trading is not a get rich quick scheme. If you are searching for something like that, then go with something that fits your idea.
Let’s face the truth, trading is hard, but trading does bring wealth, right?
But just like any other profession, failure eventually bring the victory that you desperately need. Thus, you should never give up after a series of losses.
Hopefully at least one or two of these habits of successful forex traders will resonate with you and you will add them to your own trading plan.
Make all of these trading habits of your own and you are much more likely to join the 5% of successful traders who make a nice living on their own terms in the market.
Further reading – 17 Unknown Forex Trading Secrets Every Trader Should Know About
Do you have habits you think should be added this list? Let me know in the comment section.