Forex trading is an attractive investment or career. It’s hard for anyone to see the lifestyles of successful forex traders without feeling like they, too, should start trading. So, what does it take to be a good trader? Is it all about having a substantial capital? Or does it come down to luck? The thing is that though many people trade forex, not everyone is good at it. If you want to become like the crème de la crème, you need to learn what sets them apart from the others. Of course, it starts with signing up with the best forex brokers. But there is more to it than this. It also comes down to assessing how ready you are to trade by questioning your preparedness. It’s time to ask yourself these questions, and if you answer no to any of them, put in the work to turn that no into a yes:
Do you enjoy learning?
This question might seem odd. After all, once you understand how to trade, you should be set for life. The journey should be smooth, and you should start getting a high ROI on your capital soon enough. But that’s not the case. Strategies change – markets change – everything changes. And you must adapt to these changes and make the most out of them. That’s why successful traders are always pushing to understand what the current trends are and whether they need to readjust their positions to get in on the new options. Enroll in beginner courses now and keep learning even when the thousands of dollars turn into millions. And anytime you want to open a trading account, start small with a demo account before going live.
Are you ready to take action?
You may know how to trade but you are yet to put your money where your mouth is – you are still biding time. But guess what? To become a successful trader, you must be ready to strike when the iron is hot. Sure, you should always keep learning and reinventing yourself. But that should not hold you back from implementing the tips you pick up along the way. Make a plan and stick to it.
So, how do successful traders do it?
- They figure out where they need to improve – which analyses should you focus on most?
- They understand how much money they want to put up as capital and have a good bankroll management system,
- They break down their goals into milestones to make them SMART (specific, measurable, achievable, realistic, and timed),
- They are clear about their position sizes, take profit levels, entry and exit levels, etc, to augur with how much risk they can handle, and
- They stick to the plan.
It takes a lot of discipline to keep up with these measures. For example, how do you keep yourself from spending $5,000 when you have budgeted $500 on it? It takes a while to master this level of self-control. But without it, you end up gambling with your capital rather than investing it – and yes, there is a very big difference between the two.
Can you keep emotions out of the equation?
You might be ready to answer yes to this. But the emotions surrounding forex trading are different from your usual reactions. We are not talking about anger or glee. Instead, we tie the emotions down to fear and greed. How do these emotions work?
Greed is like when you are at a buffet and can see all the goodies lined up and something in you tells you to take everything. So, you heap your plate and keep getting more and more food. The result? – An aching stomach or food poisoning. The same can happen with trades. You can chase so many trades and allocate so much capital to them that you increase your risk. If things don’t work out, you can lose your capital.
Fear is just as bad. Sometimes, other traders may jump on an opportunity that seems like a guaranteed winner. And your FOMO (fear of missing out) can get you so worked up that you forget that you had a clear plan from the start. So, you jump on the trade. Sometimes, it works out and you win. And in others, you lose your trading capital, probably hurting your bankroll.
It’s best to stick to the plan like we laid out above. Understand what you can trade and how far you are willing to go. When you have such checks in place, going overboard becomes harder.
The barriers to forex trading have greatly reduced over the years. After all, you can trade from the comfort of your home and make good money without leaving your couch. Even so, trading is not as easy as illustrated by forex traders or tutors. You’ve got to put in the work to reap good fruits – you get out of it what you put in it. All the best!