Trading any market consistently is difficult. It tests you in ways you’ve not likely been tested before, with the majority failing to achieve their goals.
So what separates the successful traders from the pack?
In essence, it boils down to clear planning, correct education and strong will power. Devoid of these three elements, aspiring traders will, without question, struggle and eventually quit.
Learning new skills
To trade consistently, several skills require mastering.
- Analytical skills are necessary components to help navigate the markets and pin down high-probability trading opportunities. A large majority of retail trading decisions are based off technical analysis. Successful (technical) traders have developed an ‘eye’ for the charts, which, for many of us, can take years to achieve.
- Attention to detail is paramount. Accomplished traders have the ability to hone in on actionable data. In other words, they choose information wisely as it’s easy to get caught up in the media circus.
- Mastery of one’s mind is probably the most important skill a trader develops. The randomness/probability sphere turns the world upside down for the hunter-gatherer part of our brain. The emotional aspect of this business is, undeniably, the toughest hurdle between aspiring traders and consistent success. A lot of educators unfortunately fail to address this section fully.
- Patience and discipline are two essential inner traits efficient traders possess. The discipline to not deviate from your trading plan and remain focused on the task at hand is crucial.
This is by no mean an exhaustive list, nor a guarantee for success, but it does highlight specifically important skills one should master if they want to accomplish success.
It’s a business – NOT a hobby!
Treat trading as a hobby and it will highly likely pay you as a hobby.
Trading is a serious business and should always be treated as such, be it a part-time venture or as one’s day job. If you intend on using the markets as a place for amusement or somewhere to have a bet every now and then, you may as well throw whatever funds you have in your account in the garbage. Better still; send it to a noteworthy charity!
Successful traders view trading as a business, with detailed strategies, firm money management and strict risk control. For that reason, if you truly want to trade alongside the best, you’re going to have to approach trading in the correct manner!
If we think about it rationally, can you imagine a doctor, lawyer or businessman approaching day-to-day business as a hobby? Very unlikely! So, why should it be any different for trading?
Being wrong and losing money
How many of us truly like admitting we’re wrong? Couple this emotion with losing money and you have yourself a double whammy of hurt!
However, it is simply not a matter of pain and distress, since losses tend to be the catalyst that pushes some to make financially fatal mistakes – think revenge trading. This can exacerbate losses, creating a vicious spiral in which the trader’s account becomes out of control.
Winning traders are cognizant of this hazard. A loss is simply that – a loss. They know losing trades are an inevitable expense.
Having the discipline to CONTROL oneself is an integral part of a profitable trader’s character. Rules are NOT to be broken in this business. Following your strategy and taking clear setups in accordance with its rules is critical.
The FX market is a continuous flow of temptation, offering numerous opportunities to break one’s trading rules. Having the patience and discipline to pass on these enticements will make or break you, PERIOD.
Becoming a consistent trader
Reaching a level of proficiency in this business will NOT happen overnight.
Enrolling in a weekend course and expecting to trade successfully is almost comical.
Profitable trading will take time, study and practice.
To get started, look to select one method (for example, one that is price action based) and master this. Jumping from method to method will waste time and energy, and will likely end with you throwing in the towel and becoming another losing statistic. If the method you focus on continues to fail after 4-6 months, then consider moving on. But give it a chance to work. Remember, one, two or even three consecutive losses means absolutely NOTHING considering you’ll likely be taking at least 100 trades in any given year!
Trading successfully IS POSSIBLE. But a high chance of success, just like anything, depends on how much you want it.