18 Laws to Be a Successful Forex Trader
Trading mindset is everything
Well, after 10 years of trading there is no question – consistently profitable trading is at least 95% about trading mindset. It is everything between you and the market. After you have mastered your trading edge by going through a lot of testing, trading and improving, you must learn to trade like a machine (but with positive approach and emotions) – religiously follow your daily process and be consistent as this is the only thing that matters.
18 Laws to being a successful Forex Trader:
1) Never give up
If you are new to trading world trust me – there will be ups and downs, and you can’t run away from this fact. There is no other way to build your experiences, and develop the »trading eye« aka “gut feeling”. Only the game can teach you the game. Self-accountability and being honest with yourself will make you a better trader. If you do not know yourself, there is no better job as a trader. Over time you will know your strengths and weaknesses very well. When things get tough and you feel like you are not making any progress, just remember it is all part of the process and journey. Move forward with wisdom you learned in obstacles.
Think about what put you in the trading in the first place. So promised financial freedom many self-called gurus are selling to you? Option to work independently from home, or anywhere in the world just by having the laptop? Is your goal to become successful fund-manager? Was it passion for financial markets and uncertainty of them? Was it thought you can trade the currency which you have in your pocket, or gold your wife has on the wrist? Always remember why you started and never give up on your goals. Time will pass anyway.
2) Always believe in yourself
You have your own mind, and you control your body. Lead and move in the direction YOU want to go. When I started in trading, a lot of people told me things such as: » Trading is risky.« »You can lose everything.« »Leave trading and go to the university. «
If you spend most of the time with 4 unambitious, grouchy, hating people, guess who will you become? The 5th one. Unless you do not love yourself and want to create something in your life you do not want to do this.
I say: »Do not listen to those people«. You must protect your mental energy and capital, and cut negative and grouchy people out of your life when it comes to achieving goals and working on your vision. Negative people did not even follow their dreams. Why they should believe in yours?
Always be honest to yourself, do your own thing and lead.
3) Trading is a business, not a hobby
Trading is not get-rich quick scheme, so avoid everyone who is trying to sell you this. Trading is nothing else, but a business. You must have your own trading routine, rules and process. Before you get experienced and reap the rewards of trading lifestyle, you must invest your time, energy and money. No way around. There are no shortcuts. Everything in life is done step by step. Learn to trade forex by focusing on yourself and our trading.
4) Have other activities and goals
Do not let your trading become a »run-away« from your life. I remember I read once that someone did the trading just to run-away from his depression, and ended with his suicide. Believe me you will become much better trader and person when you will have other activities, hobbies and goals in life. Things such as family, friends, health are most important in life. If you have a passion for your trading, learn to trade forex and try to become the best trader possible. I am not saying you should stop trading, but I am saying those things will fill you with positive vibes and overall make you a better trader and person.
5) Price is the king
Ask yourself what is running the market? Fear and Greed. It is all supply and demand. There are a lot of traders, and ones are using just technical analysis, one fundamentals, and one traders are using the combination of both. Find what works the best for you. For me using the technical analysis (price) is only thing I need to know. Of course, sometimes will happen that really bad and surprising news will have impact on the price, and maybe change the direction of instrument, but it is just a one trade in the series of your trades.
Price is the only thing that shows real indication of the market. Why use useless indicators when the price is real? Why read predictions about the market when no one knows what is going to happen next. Be reactive when the timing is right, and not try to predict things. Price is only thing that is real. Everything else is just a noise.
6) Higher time frames shows the real picture
I am not saying you can’t trade successfully on the lower time frames, but from my own experiences higher time frames such as weekly, daily, 4-hour are showing the real picture and the major direction. Majority of the time lower time frames will follow the higher time frames. Higher time frame edge over lower time frame edge. I know a lot of big traders who are checking the charts and their trading positions only at the end of the day to make their trading decisions. Do you think George Soros would waste his time trading the 1 minute charts? Probably not.
In 10 years of trading I tried everything – from scalping to position trading. What works for me is swing trading using the weekly, daily and 4 hourly charts. Do what the big guys are doing, and do not follow the crowd… Unless you want to become another lost trader. Higher time frames are where is path of least resistance.
7) Manage the Risk
As I wrote above, trading is a business. If you are serious about your trading, and you want to trade for the next 10-20 years, then treat it this way. Will you open your trading account, and risk 20% on your first good opportunity? Five losing trades in a row and you are out of the business.
Managing the risk will keep you in this business. If the business owner of the local restaurant loses his invested capital, he is out of the business. If you lose all your trading capital due greed, you are out of trading too. Manage the risk and never risk more than 2% per trade.
8) Your trading journal is your favorite trading book
A lot of traders are looking for secrets to turn their trading around. They are buying all kind of courses, books, seminars…you name it.
Only game can teach you the game. Stop trading randomly. Trade. Track. Learn. Improve. Repeat. Invest some time in your trading plan, trading journal, and learn to trade forex with the right trading skills and habits
Trading is all about learning from mistakes, start doing what works and ditch everything else. If you need a help find one trader, mentor who is already where you want to be and follow his advice.