Forex trading can be an eminently lucrative profession for those traders who have the resilience and determination to unlock the secrets to success. However, the markets do not give up its many secrets easily – indeed forex trading has made mincemeat out of many hopeful newbies.
Do you have the right stuff to become a successful forex trader? Take a moment to answer the below questions, and find out for yourself.
5 Questions To Ask Yourself Before Taking Up Forex Trading
1. Are You Mentally Strong? Forex trading is as much about mastering your own mind, as it is about mastering the markets. Human beings have a tendency to make decisions on the back of emotions, rather than cold hard fact and logic. Poor trading psychology can destroy even the plumpest stash of equity. If you are not mentally strong – if you are the type who will bow to the evils of fear, greed and frustration, the currency markets are likely to bring nothing but doom to you. Fortunately, everyone can train their mind so that it takes on the right aura to trade with calm and logic.
2. How Much Do You Want It? If you truly desire forex trading success – if you hunger for profits – you’re just eminently more likely to expend the energy it takes to go from zero to hero. Forex trading involves a steep learning curve. Additionally, new traders must clock up a lot of market experience – trial and error – before they can truly manipulate the market consistently. When you have the raw desire for forex trading success, you’re far more likely to make it through the tests that the markets set.
3. Are You Willing To Educate Yourself? There is much to pick up as a forex trader. You’ll need to understand what makes price move, and study chart patterns, indicators, risk management and more. Good traders don’t learn these things overnight – and there is often a time lag in learning from a book and actually applying that knowledge within hostile market conditions. Good traders will accept the need to adopt a long term commitment to acquiring new trading knowledge.
4. Can You Take A Punch Or Two? Look, taking a loss – taking a series of losses – are just part and parcel of the forex game. Some people just find it impossible to stomach a loss. They take it personally. It eats up their insides and they ruminate about the lost pips endlessly. Those types never thrive in the world of forex trading. You must be able to take a loss in a calm and robotic fashion. The ability to move on without hesitation to the next trading play – having learned from your past loss, instead of rueing it.
5. Do You Learn From Your Mistakes? The very best forex traders all learn important lessons from their past trading experiences. Whether those trades won or lost. Every single trade you finish should be able to teach you important lessons. Why did it win or lose? How well was the entry made? How about the exit? Was the stop loss too snug, or too slack? With hindsight were there any glaring errors in opening that position?
If you can honestly answer these five questions positively, you may well have the ideal forex trader makeup – even if you have not so much as traded a single currency in your life.