8 Things You Won’t Hear from a Successful Forex Trader
“I never lose.” Losses are an unavoidable part of all financial trading, and anyone who says otherwise may be over-exaggerating.
1. “I never lose.” Losses are an unavoidable part of all financial trading, and anyone who says otherwise may be over-exaggerating.
In Forex, a steep, unexpected loss could wipe out your entire account, but what makes someone a successful trader is the ability to win more than you lose.
2 – “Money management is not important.” When it comes to Forex trading, determining how much to risk is just as important as having solid entries and exits. Don’t let anyone tell you otherwise.
3 – “It’s good to ‘average down’.” Starting strong is a very good indicator of a successful trade, whereas adding to a losing trade is both risky and downright dangerous. Why would you want more of something that looks like a loss?
4 – “I am 90% accurate when predicting short-term movements based on chart readings.” Even the most talented technical traders have a success rate under 70 percent. Anyone who claims higher is likely to be over-embellishing his or her success.
5 – “You should be trading actively every day.” There are a few reasons when it’s a good idea to take a break from the market. For starters, there are times of extreme volatility, such as times of a surprise political event, when technical traders may be out of their element, and it’s worthwhile to take a break. Likewise, sometimes traders just need a break, either to enjoy their profits without getting cocky, or to recover from losses without getting despondent. Taking some time away from the markets can be good not only for your bank account, but for your emotional well-being.
6 – “My strategy is profitable in all market conditions.” There is no such thing as the ‘holy grail’ when it comes to Forex trading. If there was, everyone would be doing it! The only possibly strategy that may come close is high frequency trading, a strategy not usually accessible to retail traders.
7 – “I taught myself everything I know.” While it’s true that successful traders may have embarked upon a path of self-study, there’s no way they could have taught themselves everything, unless they suffered devastating losses along the way. It’s more likely that a successful trader learned from other successful traders, whether from a Forex trading course or from observing another trader’s trading strategies. Just as you wouldn’t want to use the services of a doctor who proudly claimed to be self-taught, you shouldn’t rely upon claims from any trader that makes similar assertions. There’s no shame in learning from others; in fact, learning from the success and failures of others will almost certainly make your trading stronger.
8 – “I know everything there is to know about Forex trading.” This claim is not only arrogant, but also impossible. There are advances being made in every single field, every single day – and the world of Forex trading is no different. There is always something new to learn and discover, whether it’s a new trading strategy or a new technology that was just released. Traders who are stagnant in their thinking are likely to get stuck in a rut, or to find it difficult to adjust when new challenges head their way. Don’t be afraid to keep learning, it’s good for your trading and for your mind!