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The 5 Traits of a Successful Forex Trader

Jul 24, 2008
Forex trading is definitely not for everybody. There are many factors to take into account and the risk of losing money is always present. Some people just aren't cut out for this. If you are thinking about become a Forex trader, you should keep reading. Successful Forex traders have different traits from other people.

If you don't possess all or at least most of the following traits, Forex trading might not be the right path for you:

You will need discipline. Successful traders don't try to trade "on the fly". Instead they put together a trading system which works and they stick with that.

You need the ability to accept risk. Forex trading is not risk-free. You can lose money when trading and you might be prepared to accept this risk.

You also need to be able to accept failure. Even the world's best traders lose money sometimes. The difference between them and other traders is that they accept their failure, learn from it and move on, rather than focusing on the failure.

Successful traders must have confidence in their ability to make successful trades and in their knowledge of the market. They don't guess or doubt their trades.

You need to accept being wrong. Nobody is perfect and everyone makes mistakes. There will be times when your analysis is inaccurate. Don't stay in trades which have turned bad just because you don't want to admit you were wrong. You should instead cut your losses and search for another opportunity to make them up.

You need to be patient. Good traders follow their system and await the best opportunities. You don't need to have positions open all the time. You might have a few days without any trades being made. Don't trade just for the sake of it because this is how you end up picking bad trades over good ones.

Know when to get out. You need to know when to get in but getting out is important too. A lot of traders have become greedy and remained in a trade too long, only to see a sudden downtrend wipe all their profits out. If your trading system suggests getting out, do it.

Be aware of your financial limitations. Never over-leverage yourself. Don't trade with money that you need for other things, such as paying your mortgage and bills. If you do that, you are risking your home. Trade only with money you can live without. This might mean you only have a couple of hundred dollars to begin with but that is fine.
About the Author
Ian Armstrong is an avid Forex enthusiast.

Sticking to a trading system is important - but so is having a profitable system! Read real reviews, based on actual performance - at FX Trading System Reviews
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