Important tips that will guarantee you success in the forex trade
If you are considering venturing into the forex trade, read this first to avoid blowing your account!
Many people get into the forex trade with a very negative mind set. Some make the mistake of equating forex trading to gambling, but as they all find out later, forex trading is far from gambling. Even the best gamblers know that their trade is heavily dependent on luck. Forex traders on the other hand know that their trade has very little to do with luck as the best traders are those that obey time-tested laid down rules and regulations. There is nothing lucky about identifying a breakout, a trend, and a correction!
This is why successful traders do not have the same attitude as gamblers. We will take a look at how the attitude of a trader is important to their trading success.
3 ways your attitude can prevent you from succeeding in the forex trade
If you make money in the forex trade arena, you must be ready to adhere strictly to laid-down rules of a trading strategy. If you are the type that will quickly dump a trading strategy after a few losing trades, then it may be better for you to stay away from the market. No trading system is perfect. The only traders that make money are those who are able to stick with the trading system through thick and thin. If the system is good enough, the trader will end up profitable in the long run.
Short term mentality
Sadly, many people that come into trading come in with a very short term mentality. Their focus is usually on making money as fast as possible. The reason for this is the get rich quick mentality created by most web sites and blogs selling forex merchandise. Well, any trader that comes into the business with this mentality will end up crashing their account within a few weeks. Some even crash it in days! So to avoid this, the trader simply needs to treat their forex career like a business; it is and not a get rich quick scheme. This includes sensible money management and conservative use of leverage.
Not knowing when to pull the plug
If you do not have the ability to accept a losing trade without trying to get back at the market then you will find it hard to succeed. Good traders know that a losing trade does not mean they have suddenly become inefficient, but that it is simply a market circle that is being played out. After a losing trade, a good trader will simply wait for his trading strategy to deliver a new trade instead of immediately jumping back into the market looking for revenge.
Some traders make the mistake of removing the stop loss on a trade simply because they feel that the market will come back in their favour. 80% of the time, the market does not return. Even when it does return, the trader’s account may have already been blown!
If you are able to fine tune your attitude, and iron out the issues highlighted here, you will stand a higher chance of success in your forex trade adventure.