12 Things I Learned By Being A Forex Trader

Your email address will not be published. Just because we have a basic understanding of our universe, all of a sudden, we start pretending that we can control it. The market goes up, so now for your initial investment, you can get back 90 EUR. If public companies have shares that you can freely buy and sell on the market, then countries have currencies. On the other hand, choosing weekly charts indicates a comfort with overnight risk and a willingness to see some days go contrary to your position.

There is no single formula for success for trading in the financial markets. Think of the markets as being like the ocean and the trader as a surfer. Surfing requires talent, balance, patience.

The Basic Forex Trading Framework

There will always be another trade. Sometimes, the price action won't reach your anticipated price point. At this time, you must have the discipline to believe in your system and not to second-guess it. Discipline is also the ability to pull the trigger when your system indicates to do so.

This is especially true for stop losses. Objectivity or "emotional detachment" also depends on the reliability of your system or methodology. If you have a system that provides entry and exit levels that you find reliable, you don't need to become emotional or allow yourself to be influenced by the opinion of pundits.

Your system should be reliable enough so that you can be confident in acting on its signals. Although there is no such thing as a "safe" trading timeframe, a short-term mindset may involve smaller risks if the trader exercises discipline in picking trades. This is also known as the tradeoff between risk and reward. Instruments trade differently depending on the major players and their intent. For example, hedge funds vary in strategy and are motivated differently than say, mutual funds.

Large banks that are trading in the spot currency markets usually have a different objective than currency traders buying or selling futures contracts. If you can determine what motivates the large players, you can often align that knowledge to your advantage.

Pick a few currencies, stocks or commodities and chart them all in a variety of timeframes. Then apply your particular methodology to all of them and see which timeframe and instrument aligns to your system. This is how you discover alignment within your system. Repeat this exercise regularly to adapt to changing market conditions. Therefore, the art of profitability is in the management and execution of the trade. In the end, successful trading is all about risk control. Try to get your trade in the correct direction right out of the gate.

Evaluate your trading system, make adjustments and try again. Often, it is on the second or third attempt that your trade will move in the right direction. This practice requires patience and discipline to achieve success. Trust that you will be rewarded for what you are, not for your momentarily perception. Trust that things will eventually go as you stated. As you may see, it takes a lot of work to balance greed and fear. Both are the engines of the forex trading world, and both are shaping our lives at a very deep, sometimes unconscious level, each and every day.

Of course, some days are better than others. During a trade you may see a lot of swings back and forth. Before stabilizing on a trend, the market moves many times. You may have a lot of detours, a lot of stalled moments and sometimes, it may seem that the road is not leading you anywhere.

You should always cover your ass as much as you can, but avoiding risk all together will never work. No risk equals no reward. What I really learned was something more subtle: Every risk you take can be calculated and can generate a certain set of results. Another way to put this is: If I risk that amount, this thing will happen.

If I risk the other amount, another set of things will happen. The result will be mind-blowing: Very, very difficult, but manageable, if you pay enough attention to all the bumps and to all the possible routes. Every trade should have a lifetime.

The longer you stay with a trade, or with a single way of trading a. When you get too trapped into something, being it a relationship, a business, a forex trade, you lose balance.

As of today, I get to work on 3 big areas: Whenever I feel trapped into one area, I switch. It will never happen. Of course, there will be losses. But the sooner you get out of that losing trade, the smaller the losses will be.

For me, that was the first big moment when I realized forex trading is a very, very difficult business, and you have to embrace it with a very clear mind and attitude. I was guilty of clinging to the past. Like the past was holding everything that my present needed. The past is dead. The only thing alive is now. This a very difficult lesson. Because it challenges one of your deepest convictions, which is: Go with the flow.

For instance, you may have all the reasons to predict that the market will go up, and yet, the market goes down. All you had to do in order to win was to go with the market.

I traded divergences heavily. A divergence is formed when the price seems to go up, but the indicator tells you that this is not exactly right. In real life, for instance, a business may show signs of going strong, with a lot of sales and good karma. But behind the curtain things are not so good: There might always be a divergence hidden way below the surface, waiting to hit you the moment you expect this the least. So, if forex trading is so interesting, why did I give up?

And because I decided it was enough of a lesson for the time being. Am I going to trade again? Im still a virgin but I am going to learn trading.

I will find my niche and be disciplined. Im a little nervous, but mostly excited that this inspiration matches who I am. I am very interested and and want to be really good at what it takes to do this.

As I am reading blogs and watching videos and learning of the different systems I know I will want to become well acquainted with, I came upon your insights and wanted to say thank you. I am taking notes and really appreciate that you shared your ideas.

I used MetaTrader as a platform and mainly candlesticks and price action. I got into it by curiosity and stayed there because of stubornness. Once you reach I have lots of friends losing so much in FX. Actually you must be well aware of it before taking too many risks. Hi, You got a really useful blog I have been here reading for about an hour. I am a newbie and your success is very much an inspiration for me.

The FX market is a dangerous place for people who are unprepared and are expecting quick money. Point 3, is easier for beginner traders. A set and forget Target Profit.

Its like being thrown in the jungle with nothing. Can you share links or any other resources that one can use to understand? So basically I got into binary options and without learning muc, and following advice from brokers, I lost my shirt and then some! Silly I know but chalk it up to lesson learned. Any thoughts or guidance? Play big and now lost so much.

Revenge trade immediately after you lost because you wanna make it back. Plan what to do when you win. Plan what to do when you lost. You lost so much, you start to doubt. You question your system. You question your entry. You expand your stoploss. You play to make money.

Thanks for the inside. I really appreciated it. It helps me understand the fear, how to and what if and fruits of labour. Getting about 10 students to learn about trading Forex using just a smartphone. I like the way you write. I do not agree with all of what you write, but that is not the point.

My point is that you have written a blog post, which is good for new traders; because there are some universal issues at stake here. Another thing I like about your sharing is this; Even though you did not stay in the world of trading for a long time, you write about how trading made a huge impact on your way of thinking — also on your life outside of trading.

That is a very positive thing. I will try to point out some of my thoughts about some of the issues you wrote about in your blog post. Two lines about myself. I am a forex trader as well as an entrepreneur and teacher, currently living in Greenland.

When I first started trading Forex, I remember spending countless hours studying setups over the weekend. I would often come back to my trading desk multiple times on Saturdays and Sundays.

Then on Monday, more often than not I would end up taking a completely different trade setup only to watch the original trade idea move in the intended direction without me. It happened because I was trying too hard. As soon as I stopped over-analyzing trade setups and trying to make them work, my profit curve started to rise. Now I spend maybe 20 to 30 minutes per day looking at my charts—the exception being the charts I post on this website , of course.

As counterintuitive as it may seem, learning to not try so hard was one of the things that completely changed my trading career for the better.

Successful Forex traders have taken note of this, which is why they let the market do the heavy lifting for them. The concept of thinking in terms of money risked, as it applies to Forex trading, is no exception. Think about your last trade for a moment. Did you define the exact dollar amount at risk before putting on the trade? Or were you more focused on the number of pips and the percentage of your account at risk? The convenience of Forex position size calculators has made it so that we never have to consider the dollar amount being risked.

This convenience has caused a huge oversight. In it, I talk about the need to think in terms of money risked vs. This is because pips and percentages carry no emotional value. So when you define your risk on a trade as a percentage only, it triggers the logical side of your brain and leaves the emotional side searching for more.

Successful Forex traders know this. Such a statement would contradict my own experience. What I am saying is that no successful Forex trader needs a win today to pay the electric bill tomorrow.

No trader can sustain that kind of pressure and become consistently profitable. That type of environment will only foster destructive emotions such as fear and greed. Embrace the challenge and focus on the journey to becoming a successful Forex trader and the money will follow. All successful Forex traders know when to walk away and take a break. Those who are truly passionate about trading Forex know how hard it can be sometimes to walk away from the market.

Walking away can be especially difficult following a trade. This is because our emotions are running high and often get the best of us.

It feels like things are finally starting to click. Walking away at this time can be tough. The natural tendency after a winning trade is to continue trading.

Taking a break after a win will allow your emotions to settle. So the next time you have a winning trade, pat yourself on the back and then walk away. I would immediately start going through all my charts looking for a new setup with the intent of recovering what I just lost.

Instead of seeing a loss as a reason to hop back in the market, take it as a signal to look at what you could have done differently.

Successful Forex traders know this and have learned how to control these emotions. The very first step in controlling your emotions involves walking away for a bit. Not all brokers offer New York close charts, but you can go here to get access to the same style charts I use. This is when I do the bulk of my analysis anyway since I trade the daily time frame, so it makes sense to take a breather until then.

They do it because it sells. The only way you can fail at becoming a successful Forex trader is if you give up. This sounds obvious, but it amazes me how often I see perseverance and grit left off the list of reasons why a certain trader became successful. That brings us back to the first section of this post where I mentioned passion.

You must have a burning desire to want to succeed as a trader. Not because you want more money, but because you love trading. Sure, there are various tips that can help you, but those who have achieved consistent profits are not untouchable. Embrace the journey, because there is no finish line. Even those who have achieved consistent profits have more to learn. Did any of the traits above come as a surprise to you? Can you think of an attribute of successful Forex traders I left out?

Thank you very much Justin this is great staff picked up a lot in the easiest way possible thanks to this article!!! Dr Bennett Sir I call you Dr because whenever I read your article something get cured and I become more healthier trader. Your teaching are life changing and bank account changing. I love you man. Wow, thanks for the kind words. And from my perspective, comments like yours keep me going as running a website this large is no easy task.

Being a beginner at anything means you have a steep learning curve ahead of you. Trading is certainly no exception.

1. They Don't 'Lose'

Starting out in the forex market can often result a life cycle that involves diving in head first, giving up or taking a step back to do more research and open a demo account to practice. From. How to Become a Successful Forex Trader Forex trading is accessible, exciting, educational and offers traders lots of opportunities. Despite all this, many traders fail to achieve good . Well, even the most successful trader had to begin somewhere and if you can regularly generate profits - you can consider yourself a successful Forex trader. Hopefully this article has given you some insights into traits shared by the most successful Forex traders.