To become a professional trader and achieve success in the field, it is very important to understand that the financial market does not forgive mistakes and requires maximum discipline from everyone involved.
The following tips will help you to minimize losses and increase your capital consistently:
True winners are emotionally and mentally invincible. The reality is that losers lack this quality and cannot control their emotions, which inevitably leads to serious losses. The easiest way to stay in your “emotional comfort zone” is to follow a certain system. When trading, always stick to your chosen strategy and never deviate from it. Think of it as your main daily challenge. It must be done regardless of whether you have reached your profit or loss limit. Such behavior will protect you from mistakes, and you will feel more confident while keeping a cool head.
When it comes to the financial market, losses are inevitable since they are an integral part of this kind of job. Accordingly, both losers and successful traders experience losses. The only difference between them is the ability of professionals to analyze their losses and learn from them.
Unsuccessful traders always think this way:
Responsible and successful traders have a different mindset:
“Every mistake I make is an experience, invaluable and irreplaceable.”
Winners in Forex always respond to any trend change right on time. To be able to do this, they research, use technical indicators and deepen their understanding of the market.
As for losers, they are often guided only by other people’s ideas and practices, believing that some second-hand experience will help them succeed. However, in part, this is not the case. Even the most effective strategy in the hands of an ignorant trader will turn into just a set of algorithms that have nothing to do with successful trading.
Typical loser behavior in Forex:
Going short when there is a bullish trend/going long when there is a bearish one.
Potential winners are always prudent and know that they cannot get rich overnight. That is why they use proven trading strategies, verified and thought out to the smallest detail.
Thus, an “advantaged” trader knows his or her entry and exit points, accepts losses and locks in profits, determines the position size, and follows the chosen strategy of behavior (trend trading, trading against it, etc.).
Successful traders will never start using a strategy that has only proven its efficiency to other Forex players. They will be sure to find out all the pros and cons of a particular strategy, determine their capabilities, in particular, the available time, risk tolerance, and other factors, and only then will decide on whether to use someone else’s strategy or not.
What do losers do? They take some advice of a blogger, analyst, or just borrow some model of behavior in the market from one of those thematic forums, and thoughtlessly apply it to their trading. Of course, trading with a strategy is better than with none. However, the behavioral strategy must be fully compatible with a particular trader, which depends on a great many factors.
To understand how effective your strategy is, you should put it to the test. It is inadvisable to use real money for this purpose.
What makes a successful trader?
Using special-purpose software and testing behavioral strategies under realistic conditions.
What makes an unsuccessful trader?
Taking everything that you can get your hands on and trying to make it work without even understanding the algorithms used.
Winners know that this is one of the key elements of competent trading. Losers do not even pay attention to it, although the math is actually simple. To do the calculation, you just need to know the amount you are ready to lose and the distance from your entry point to the initial stop loss.
No matter how successful your entry is, you need to understand that profit is made only by the decision to close a trade. Therefore, you need to put a lot of emphasis on your exit strategy.
How do losers act?
They cannot control their emotions and, being captive to greed, close unprofitable trades late, while for fear of “getting into losses” again, close really profitable trades too early.
To develop an effective exit strategy, you should follow the algorithm:
All of us at least once in our lives felt how useful and effective reasonable motivation is. This also applies to financial markets. A trading plan for a year is a must for successful traders. Besides the desired income level, you can add the following information there:
To be realistic is of the utmost importance! Do not try to get rich in an instant, because this is what unsuccessful traders do.
True professionals always keep a diary, writing down the details of each trade in it. In their free time, they do a detailed analysis of each trade, determining which decisions were right, and which ones failed them. Remember that every successful trader knows perfectly well not only his annual but also monthly and even daily profit.
What do losers do?
Losers sometimes do not even know that all their funds are gone until their brokers tell them about it.
If you are not trusting in your abilities, in a bad mood, annoyed, or you feel that today’s market trading will not work out well for you, listen to yourself. After all, no trading means no losses, which provides an opportunity to earn in the future!
If you like quick and efficient decisions, it is worth considering automated trading systems. Special software can replace you in the market and maximize profits. Trading advisors offer a flexible system of settings and can become an excellent alternative to any other passive income.