Forex trading has been growing in popularity and many people have heard success stories of traders who quit their day jobs are now trading successfully. However, just because there are many success stories, does not mean that forex trading is for everyone or that everyone can make a success of it. There are many factors that need to combine to make a successful trader and it is important to be honest with yourself in understanding whether you fit into that category or whether you will be better off quitting forex.
Inability to Stick to Your Strategy
While developing a trading strategy is important, it will not help unless you stick to that strategy. If you lack trading discipline, trading is just not for you. A trading strategy is designed to prevent you trading on impulse or chasing losses. Discipline is needed from before you begin the trade with research and market analysis, and continues throughout your trading. An inability to stick to your strategy is most likely to lead to significant losses in the long-term and may indicate a personality that is not conducive to being a forex trader.
Emotional or Anxious Personality
Forex trading can be stressful as you are dealing with large amounts of your own money when you are trading. All traders experience losses, even traders with the most experience. However, it is being able to keep your cool under stressful circumstances, even when you have made a loss, that distinguishes the successful traders from the others. You cannot allow your trades to be ruled by fear or greed – they must be ruled by analysis and strategy. Anyone who finds themselves anxiously glued to their computer screen or shifting their stop losses in the hopes of a price reversal, will probably be better off quitting forex trading.
Forex trading takes time. It is not enough to create a strategy once and think that is all the time you need to invest. While you don’t need to be in front of your screen all the time or have trading on your mind all the time, to be a successful trader you do need to invest time in your success. Traders need to spend time understanding the forex market and doing market analysis. You need to keep on top of your strategy and improve it where necessary and you need to constantly re-evaluate your position on trading in order to remain at the top of your game.
In today’s online world there are not too many resources you need in order to be able to trade successfully, but there are some and without them, you have no business trying to trade. You must have a computer or handheld device that can access a trading platform. You must have an internet connection that is fast and reliable enough to be able to manage your trades and your trading account online. You must have the funds to trade with – funds that are set aside for your forex trading.
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