Forex trading can be a great way of making a lot of money. However, it needs to be done right. Just as there are many people who have made millions of dollars over the years through forex trading, there are many others who have made huge losses as a result of lack of trading experience and discipline. What, therefore, separates these unsuccessful traders from the successful ones? Do you know what makes a successful forex trader? What are their habits and traits? The answers to these questions are not simple because not all successful traders have the same qualities and ways of trading. However, there are certain habits that they nearly all share. Here is a look into some of these habits that they share.
They use a demo account
Almost all trading platforms have a demo account to use for practice before going live. Unfortunately, many new traders either ignore using these demo accounts or use them just for a short while and go live, often with disastrous results. To gain experience and confidence, successful traders spend as much time as possible practicing with the demo account. Only when they gain enough confidence in their trading skills do they go live.
They begin with small sums when they go live
Even after making successful trades with a demo account you can still lose money when you go live. Factors that play a significant role in the success or failure of live accounts like slippage and emotions are not so prominent when trading with a practice account. Successful traders realize this early. They put small sums of money into their live accounts because they know the idea that large accounts allow generation of great profits is false. By starting small, they can calmly evaluate their trading emotions and plans and hone their live trading skills as they gear up for larger trades without burning a lot of cash in the process.
They conduct thorough research
No successful forex trader is lazy. Before developing a trading plan they put a lot of effort in acquiring as much information as possible that relates to forex markets. They are always in constant search for economic and geopolitical information that may have an impact on the currencies they trade in. Only with such information can they make informed trading decisions.
They keep records of their trading activities
Successful traders keep records of all their trading activities containing instruments, dates, emotions, losses and profits. Such a trading journal provides critical feedback to the trader that helps them learn from their failures and successes. They know that without good records they will keep on repeating their previous mistakes and reduce their chances of becoming successful forex traders.
Do you know what makes a successful forex trader? Hopefully, the information above effectively answers that question. Round the clock trading and low account requirements have attracted many people all over the world to forex markets as traders. All hope to make as much money as possible. Unfortunately, many fail and opt out within months of going live. Others, however, go on to become very successful forex traders. Hopefully, this analysis of what makes such traders successful will help you become a successful trader too.