The question is: are there true secrets the few seasoned traders know that the majority of failures do not know? Your answer or guess is as good as mine. I call these answers as the 5 secrets of seasoned forex traders that distinguish those that have failed or those that are failing from those have succeeded. These secrets are highlighted below:
- A trading method
One of biggest mistake any trader will make is to start this business without a trusted trading approach or method. Your trading method or approach is a guide that enables you to analyze trading opportunities, what gives us the signal to buy, sell or wait and what level of risks you are willing to accept, etc. I will like you to understand that no method or approach is ‘perfect’, you must have a trading system. It is very important. You must decide on your method for entry, exit and managing risk in the forex market.
- Discipline
When you have decided on your trading system, the next thing to do is to cultivate a disciplined habit or character to follow your method. This could be a difficult stage especially when the chosen method is recording large losses. Most people will here dump the system and jump for another trading system concluding that what they have is not good enough. Although they demo traded for a good period and even back tested it. Once a system you are using have passed through all these stages of demo trading and back testing , and it performed creditably well, you need to work on yourself to stay with it.
- Experience
To succeed in the forex market, a trader must have education, experience and excessive cash. It is very possible to get the first two cheap and the third one – excessive cash will come without much struggling. The major mistake by traders is to go for the third one without adequate acquisition of the first two, thereby losing the excessive cash at the end. You must spend quality time in your education and always continue to acquire it. Experience comes from doing, making mistakes and learning. When you have passed through these two stages well, you will attract the excessive cash. However, if you keep chasing the money without acquiring the first two, getting the money will be an illusion.
- The mindset to accept losses
The truth is that all traders lose money and because seasoned traders understand this very well, they keep working on improving their skills to manage risk in the market. A seasoned trader minimizes his risks and maximizes his profits. The technique employed here is to lose so little when losses come and his risk – to – reward ratio for every trade is important to him as well as mastering the tools that help him lock in his profits in case the market begins to misbehave.
- The mindset to accept huge profits when they come
These traders develop a strategy for taking advantage of short or long term market swings to earn huge profits. They are getting the best from the market without allowing greed to control them. They know when to stay in the market and when to exit a position. I am sure you are interested in joining the seasoned forex traders. Join me on the success train. This article was originally published in
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