Many people think that Forex trading is an exciting and sexy activity. Unfortunately, this is only true for the losing traders. To the people who actually make money, Forex trading is a boring and dreadfully repetitive. Why is this so? In this article, I'll discuss what it takes to be a successful trader, and you'll understand what I mean.
Skill #1 - Self-Assessment
Good traders don't give excuses when trades go bad. They will always look within themselves and ask, "What did I do wrong?"; "How can I improve the way I trade?"
Contrast this with traders who play the blame game: "If only my wife didn't keep nagging at me, I would have been in the right frame of mind to avoid entering into this trade".
When thinking about a losing trade, poor traders say "If only this didn't happen to me". Winning traders say, "Next time, I won't make this same mistake".
Skill #2 - Discipline
This is so widely-talked about that I won't elaborate on it too much. Skilled traders have unbreakable discipline and will never enter into trades for emotional reasons.
Skill #3 - Patience
This ties in closely with Skill #2. Successful traders wait for the right moment to trade; amateur traders will enter and exit the market frequently because they can't differentiate between high-probability winning trades and low-probability winning trades.
Good trading typically involves a lot of waiting, and patience is required to keep our human impulse for excitement at bay.
Skill #4 - Money Management
While most amateur traders will focus their efforts on predicting future price movements, the experienced (and profitable) traders know that the most important component of their trading system is their money management rules. This is arguably the most important aspect of any trading system.
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