Nov 17: An Open Invitation To Frustrated Forex Traders That Desire Unlimited Success In The Market – Part 1

by David Jenyns on November 17, 2005

Why does one Forex traders succeed and another fail? What sets the winners apart from the losers? Well, you won`t be surprised to know that there are certain characteristics that all successful Forex traders share. While many investors take actions that aren`t in their best self-interest, such as making trading based on emotions, rather than on logic, or holding on to a losing position so they won`t have to admit they made a bad trade, successful Forex traders don`t do these things. But there are some actions that they take regularly, so regularly that they become habits. Learning about these characteristics and habits will help make you into a successful trader as well.

To start, successful Forex traders are goal-oriented. Most people perform at their best when they`re reaching for a clear goal. There are three basic qualities that make up a clear goal. First, the goal must be realistic. If your goal is to double your money every day, it sounds great but it`s not realistic. Setting unrealistic goals can undermine your self-confidence, you will be setting yourself up to fail. Secondly, the goal must be attainable. Just as with a realistic goal, an attainable goal must be within your current capabilities. The best goals are short-term goals; make your first goal a small one, and then continue to increase your goals as you experience success.

The third trait is measurability. Goals that aren`t precise and can`t be quantified or measured, aren`t goals at all. If your goal is to be wealthy, you need to specify what “wealthy” means. My guess is that your definition of “wealth” will change as your net worth increases. If you can`t define your goal, and measure your progress towards it, then you have no way of assessing your progress. It becomes impossible to make any changes to your techniques and strategies that may help you reach your goal. Successful Forex traders set goals, and they also are confident they can reach their goals. Confidence is the key to staying rational, logical, and disciplined while you are trading. Starting with small, realistic goals will help build your confidence in yourself and your abilities.

Successful Forex traders also apply skill and logic to all their trading decisions. They learn every day, and they use what they know to make intelligent choices on every trade. Successful Forex traders don`t worry about missing out on the next big thing they focus on making good trades. One of the most common mistakes inexperienced Forex traders make is to trade when they see an opportunity they think might be too good to miss. Jumping into a position based on a hunch, or on the belief that you may be missing an opportunity, is no different than gambling. Almost every investor at one time or another has felt a rush of enthusiasm for a trade based solely on their desire not to miss out on a great opportunity that might be available. Successful Forex traders know their market, and are disciplined in their trades so that they aren`t swayed by these kinds of concerns.

While these Forex traders know their market, it`s simply not possible to understand and stay in touch with everything that occurs in all the types of investment vehicles and markets across the world. While some Forex traders have developed systems that allow them to trade in multiple venues (for instance, in different stock markets around the world), most Forex traders specialize in a particular type of investment, and in a particular market. If you enjoy trading in commodities futures, that enjoyment will help you to focus and stay in touch with events in the commodities futures market. If you aren`t interested in currency trading, don`t trade in it. Your lack of knowledge and motivation will cause you to lose focus and make mistakes. Successful Forex traders tend to specialize; they pick an area to study and they follow it closely, learning from past trends and patterns, and from their own trades. If you`re a beginning trader, I recommend focusing on one investment vehicle and it`s market. Learn all you can, about the market and about yourself, before you move into other investment types.

Whether you`re a beginning trader, a trader with some experience, or someone who makes his or her living strictly from trading, you can be successful. Many people think they have to have significant capital, or years of experience, to trade successfully. That`s not true. (It`s also true that if you don`t stay disciplined, focused, and rational, you`ll end up as a losing trader, regardless of your level of “expertise”.) All successful Forex traders started as small investors; they didn`t trade more than they could safely risk, they learned from their mistakes, and they developed systems that worked for them and that fit their personal styles. There aren`t different strategies for different “levels” of Forex traders because the principles are the same for everyone in the markets: logical, focused, disciplined trading creates success.

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