If you are a trader, you already know there is no single secret to guaranteed success. However, following a set of good habits of successful traders will help maximise your chances of achieving success in the markets.
These habits take many forms and result from years of experience in the market. Yet, knowing what successful traders do isn’t enough to be as successful. Taking time to learn what they do and incorporate it into your daily life is step one. Here are some habits of successful traders, compiled by our forex trading professionals.
Successful traders have realistic expectations of what they can achieve over time, and understand that losses are part of the game and that it’s not all roses! They accept that sometimes things don’t go according to plan!
It is one thing to create a plan for the markets. It is quite another to execute that plan effectively. As a result, successful traders make sure that they understand the market environment and develop an appropriate game plan; they also make sure that they are ready to execute that plan.
The market can be volatile, but trends become clear if you wait long enough, and the profit potential becomes apparent. There is no point in rushing into a position when it isn’t clear which way the market will go; you’ll end up losing money. Successful traders know this for a fact and wait for these opportunities with patience.
If you need help developing some patience, read on and start implementing it.
Thriving marketers set up daily stop-loss limits to ensure that they don’t lose more than they can afford on any given day. This means staying focused and sticking with their trading plan, even if things don’t go their way in the short term.
Being disciplined helps them avoid making emotional decisions based on short-term news or price movements, leading to bad outcomes over time. Instead, successful traders spend time analysing and researching so they can make more informed decisions about how and when they enter into trades. Be sure to adopt discipline as a trading habit this year, along with some others.
Successful traders have studied various trading styles and have found one that fits their personality. Some successful traders like hedging strategies, others don’t. They’ve also explored a variety of markets and have chosen one that matches their experience level and financial goals.
The longer your exposure to risk on a trade, the more volatile your returns will be. Volatility can be suitable for traders but also really bad for them. That’s why successful traders set limits on their trades, including profit targets and stop-loss orders that limit their losses when things don’t go their way.
Successful traders are willing to put in the hard work necessary to learn their craft and master it. This means doing research, analysing the markets, and learning from trading mistakes regularly. It also means being willing to keep working at it even when you go through challenging periods and take losses.
Diversification refers to allocating your money across many different asset classes, rather than putting all your money in just one place and hoping for the best. Investors use diversification as a risk management technique. Diversification spreads your investments across different financial instruments, industries, and countries. This helps to reduce the risk of loss if any one particular asset fails.
While it is essential to stay up-to-date with financial news and events, they don’t waste too much time on trading signals or information that isn’t relevant. They may look at them once in a while, but they don’t let the opinions of others impact their decisions.
It’s easy to get drawn into complex strategies that look good on paper but are hard to execute or monitor. Most successful traders keep things simple and stick with what works best for them. That could mean sticking with one exchange, using no more than one or two technical indicators at a time, or only taking trades during certain hours of the day.
Successful Traders are not emotional
The markets are prone to episodes of irrational energy in the short term, but prices tend to reflect economic fundamentals over the long haul. A successful trader puts emotions aside and lets the markets do their thing without trying to fight them or second-guess them. You can practise trading risk-free with our demo account and learn to keep your emotions in check.
Follow these habits of successful traders and you will become one!
Although we’d love to give you a specific, step-by-step guide to becoming a successful trader, it’s simply impossible. There are far too many variables involved in this process to provide such an exact road map.
There are habits that successful traders develop over time—and core principles that guide them when crunch time hits. These are the habits and principles we’ve explored here, and we believe they’re valid for all traders at all levels of experience. If you can incorporate these practices into your approach, you’ll be well on your way to trading success.
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