Have you ever wondered what it takes to make money trading forex? Well profitable forex traders all share common traits that give them an edge when it comes to carving out a profit using their trading strategy.
While this is in no way a definitive list, these are the top 5 traits that you must posses if you are to become a consistently profitable forex trader. Keep in mind that successful forex trading isn’t a talent that someone is born with and if you don’t posses any of these listed traits right now, they can be trained and learned with practice.
The top 5 traits of profitable forex traders are as follows:
1. Profitable forex traders have the ability to keep emotions in check
If you’re going to make consistent money as a forex trader, then you have to be able to stay calm when things go bad. In this game, there is no point in sugar coating things by saying that the market and trades wont go against where you expect them to trade. What actually matters though, is how you are able to overcome these challenges with a cool head.
Having the ability to keep your emotions in check when the forex market is quickly moving against you could be the difference between having an account to trade another day and being margin called. Never let your emotions get the better of you to the point where you risk your entire account on a single position. Things might go your way once, twice, maybe even more. But it only takes one time that it doesn’t and you’re finished. Don’t risk it.
Stay calm. Stay composed. Make the right decision for the long term viability of your forex trading career.
2. Being able to stay disciplined
To make money trading forex, you’re going to need to have a plan. Then you’re going to have to find the personal discipline to stick to the plan. Seriously, what’s the point in having a plan if you don’t have the discipline to stick to it when things start to get intense?
One of my favourite trading sayings is this:
“Plan your trade, trade your plan.”
This is how profitable forex traders approach and execute their positions and so should you. Always have a plan before you even think about opening a trade. If you don’t have a plan then you are just gambling on a whim and this is a surefire way to lose money in the long run.
Plan your position. Run through what you will do if the market throws up various scenarios. Have the discipline to be able to stick to your plan.
3. Always being ready to adapt
Forex markets are always changing and if you want to be consistently profitable, then so must you. While it may look like markets repeat on the surface, there are many different conditions that markets can fall under and sometimes even showing signs of multiples personalities.
Whether we have a trending market, a volatile market full of whipsaws, or just a slow and predictable range, no forex trading strategy is going to work across them all. A profitable forex trader is able to identify the type of market conditions that we’re currently experiencing and to execute the right strategy at the time to make the most money. This is obviously not an easy thing to do but with an open mind and experience within different market conditions, it can be learned.
Screen time, screen time, screen time! When it comes to identifying different market conditions and having the ability to adapt to the correct one, there is no substitute for screen time.
4. Never lying to yourself
Have you ever played social golf with one of those people that refuses to count their drops or mishits? They might try to make themselves look good on the surface, but when they go home at the end of the day, they’re still a terrible golfer.
I’m sure you’ve talked to a forex trader who only tells you about his winners too. If not, just sift through social media and you’ll quickly see what I’m talking about. People posting their winning trades, but not a loser in sight. Again, they try to make themselves look good on the surface, but when they go home and the end of the day, they’re still broke.
There is no competition. There is only your bottom line. Stay fully accountable to the only person that matters: Yourself.
5. Able to leave your ego at the door
If you want to make money trading forex, then there is no room for an ego. The forex market has an uncanny knack of cutting egotistical traders who think they are bigger than the market itself, back down to size. Nothing is bigger than the market and the market is never wrong. It is you who is wrong and profitable traders have the ability to accept this fact and to cut their losses short.
Taking a forex trading loss is as much a mental hurdle as it is a hurdle to building long term profit. The best forex traders are able to take losses because they know that their winners either come at a higher rate, or they’re of a much bigger size. Risk:reward ratios and money management planning is key to having the confidence to no longer have to worry about whether you’re right or wrong on any single forex trade.
Sit down. Be Humble.
At Vantage FX, we understand that for professional forex traders, it’s crucial to keep forex trading costs as low as possible. This is why we’ve developed the Vantage FX RAW ECN account. If you are looking to implement what you’ve learned above, then open a live trading account with a leading Australian forex broker, Vantage FX, by clicking the open account button at the top of this page.
Select a RAW ECN account and take advantage of the lowest ECN based account commissions in the country and trade forex with spreads as low as 0.0 pips.
Source: Vantage FX Blog