A trader going into operating on Forex ought to realize that trades on currency pairs imply a certain risk: you can open profitable positions one by one, but a wrong step may cause you total loss in the blink of an eye.
Your success does not entirely depend on your trading experience and professionalism. Every novice and professional ought to understand that the risk is always there and so should be utter attention. In order to trade on Forex and gain profit, one should follow a constructive approach, be attentive and analyze every factor which may affect trends.
Below we are going to deal with 9 factors underpinning a successful trading strategy:
1. Traders who decided to work in a short-term period are initially in the high-risk group, which brings them closer to a failure. The main reason short-term trading is mostly unsuccessful is not the fact that such traders put themselves in a time limit, but rather the absence of good training and an accurate trading plan. Lack of experience and knowledge does not allow even a tiny mistake, which can result in a loss of the deposit. At the same time, such traders often do not have a sufficient amount of money on their accounts. More successful traders work in medium and long term. Statistically, medium- and long-term trading is more successful. The same can be referred to the funds invested, the ability of staying on the market depends a lot on the initial funds amount.
2. Losing traders often spend a lot of time on the analysis of where the market will be tomorrow while more successful ones decide how to behave in the current situation and apply their strategy in accordance with their conclusions. If a trader can forecast the reaction of the crowd, he/she will definitely achieve success. The probability of profit will be much higher if a trader can respond to irrational buying and selling of the crowd by a rational action plan. Therefore, it is much more difficult to be a successful analyst than such trader. An analyst has to perform a much more complicated work as they have to forecast the market's movement and recommend how to get the maximum profit while all a successful trader has to do is follow the market.
3. Successful traders pay attention to losing deals and the correlation of profit and loss while losers only concentrate on their successful deals. It is much more important to track your risks than your profit or loss. Professional traders always estimate how much they can earn and how much they can lose.
4. As a rule, those traders who cannot control their emotions are never successful. Professional and experienced traders analyze the market putting aside their emotions. In case a trader opens and closes positions based on emotions only, this approach cannot be considered either considerate or logical. However, complete ignorance to one's emotions is wrong too. Sometimes excessive stress might lead to mental diseases and loss of all trading skills. The best way is to track each emotion and consider if the reasons for one or another decision still remain.
5. All inexperienced traders are concerned about their rightness while professionals admit their emotions but do not allow them to take over the mind. Successful traders only acknowledge those factors that may help or prevent from obtaining profit. It is very important to stay aware of the processes on the market; however, it is necessary to divide private life and trading. Considerable exertion might result in mental disorders and physical exhaustion. Professional traders promptly react to the processes on the market as it is only a way to earn money for them.
6. After losing money while trading a loser starts buying new books or trading systems and following their concepts. In the meantime, a professional analyses the incident and edits hid methods given the results of the analysis. A more successful trader does not switch to another trading system at once; he/she rather does it after realizing that the old one does not work properly. Successful traders always stick to their developed system using usually only a few trading strategies.
7. Traders without a considerable trading experience often try to repeat trading techniques of famous traders. At the same time, professionals consider all possible strategies, including ones of famous traders, but use them only in case they suit their trading style. A trader's individuality, his/her knowledge about the market and own trading system are much more relevant than the achievements of famous market players.
8. Often inexperienced traders do not notice numerous factors that would help them obtain profit. The amount of money in the turnover defined profit for each trader, which is clearly realized by experienced traders. The amount of money flowing into Forex must exceed the one flowing out, and this is what each trader has to take into account.
9. As a rule, all beginning traders losing any opportunity to get profit really take it too hard, while more successful traders take it easy. Trading is a pleasure for them; however, they take it absolutely seriously. Psychiatrists learned that the excessive seriousness makes a person more vulnerable to diseases.
Both successful and losing traders take Forex trading as some sort of a game.
If we compare trading with a game, for example bowling, newbies realized that strikes thrown by experienced professionals without any visible effort are results of the considerable amount of time spent outside the "big game". As in sports, trading accounts numerous internal and external factors. You should be extremely serious about each of your deals. The difference between professionals and beginners is that the former follow an accurate trading strategy and the latter take trading as a game.