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Published On: Wed, Aug 7th, 2019

The 4 Characteristics That All Successful Forex Traders Share

The trading of foreign currencies on the exchange market is what a Forex trader does. Predicting whether a currency will increase or decrease in value can be extremely difficult. A large number of Forex traders lose money until they figure out the perfect formula for success. Much like any other profession there are certain characteristics of successful Forex traders while there are those for unsuccessful traders. The best thing that a Forex trader can do is take a proactive approach to their business and educate themselves constantly on the exchange market. The following are 4 characteristics that all successful Forex Traders share. 

photo/ Gerd Altmann

Strategic and Not Being Overconfident

The best Forex traders understand that there are wins and losses when trading foreign currency on the exchange. Those that get far too confident can make a bad investment move due feeling lucky which is a recipe for disaster. The last thing that any Forex trader wants to do is to go into a day without an agenda for trading on a specific day. Those that lack strategy might make trades not based on research or patterns but rather a hunch or emotions. As we will discuss below emotions should play not role for Forex traders as emotions can cloud judgment on a decision. Establishing guidelines for what makes a good trade or subpar trade needs to be done as these rules can help avoid disaster in terms of investment losses. 

How to Improve These Qualities?

  • Write out results that have been garnered through specific strategies. This not only can show you the wins but also the losses which will keep your confidence in check. 
  • Writing out rules for investing based on the data gathered can give you your 10 commandments of forex trading. 

Be Able To Manage Your Emotions

There is a chance that you lose a large amount of money in a matter of a few days. Scrambling and trying to make this up quickly due to panicking is one of the worst things that an investor can do regardless of investment type. Getting upset can lead to investments that are made more from emotion than from a strategy or data from previous investments. Not allowing your personal life to impact your trading is also imperative as a consistent strategy is important when investing long term. Foreign exchange investing is not recommended for those close to retirement as many beginners lose money. Look up more tips to investing as you near retirement at Retirementinvestments.com as knowledge is power. 

Improving Emotional Control:

  • We all know what the bad days feel like as an investor where it does not seem like anything can go right. Play out these scenarios in your head so when the time comes it is not as large of a shock. Prepare for the worst and hope for the best when it comes to investing. 
  • Understand that the world is not out to get you and everyone loses on a sure investment from time to time. 

Analytic When It Comes to Trading Gains And Losses

The analytical mind is perfect for trading currencies on the foreign exchange. The types of people that notice patterns in specific fluctuations of a currency can make a large quantity of money over a short period of time. Those people that are always looking at sets of data and how they relate to the market are those that will flourish in the forex industry. Traders that simply think that you lose some and win some without looking into the reasoning why money was lost or the reason the market fluctuated will not be able to correct their error in the future. 

Becoming More Analytical:

  • Use data to make decisions and realize data follows trends rather than emotions. 
  • Take time to read on different factors that impact the foreign exchange. 

Comfortable with The Unknown 

Someone that suffers anxiety when investments drop in value only to sell will lose a lot of money on the foreign exchange market. Trusting in yourself is imperative as a forex trader as many colleagues might tell an investor they are making a mistake. Do not allow the opinions of others to impact a strategy that has been created through data as well as trial and error. For those seasoned traders this might be far easier than for a beginner as many new to forex trading lose money until they figure out a strategy that works for them. 

Becoming Comfortable with The Unknown:

  • Try new things and become comfortable with not knowing how something will turn out.
  • Trust in your investment strategies can help with this in a huge way. 
  • With the right investment mind there might not be an element of the unknown. 

Forex trades that are looking for long term success must possess or develop these characteristics for sustained success. Work on the areas that you believe that you need to improve to help become a better investor. The better investor you are the more money that you can potentially earn going forward. Take the time to understand what it takes to be a successful forex investor  and begin improving personally immediately!

Author: Quick Links

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