Forex trading is no easy business, and when markets collide, things get even more difficult. It is during these periods of high volatility and uncertainty that many amateur traders fall by the wayside. Unfortunately, many of them will wind up losing all of their winnings. It is during these times that only the most skillful traders survive.
Here are 5 skills needed to conquer the markets:
1. Accepting losses as tuition
Most successful traders have been through the mill at one point in time and you only have to look through any of the Market Wizards books to know this is true. In fact, the majority of successful traders have blown their accounts once, twice, sometimes even three times before finally making it. For this reason, one of the main things a trader must learn is that they must accept their losses at the beginning as the price of learning the markets. Losses are a trader’s tuition.
2. Having the passion
A definite skill that all successful traders have is that they have passion and a burning desire to do well in the markets. Winning traders get off on analysing data, interpreting economic figures and building robust trading systems. Many quite happily sit in front of a quote screen for 8 hours a day, watching and waiting for just the right opportunity. If you are just in it for the money, or if you’re not excited by financial reports, or fascinated by price charts, trading is probably not the right profession for you.
3. Knowing yourself
One of the most underrated, but most important elements of trading is psychology. The successful trader knows this and makes it a priority to analyse his mindset before each trade. If he is not in the right frame of mind, he’ll only make bad decisions.
Forex trading is risk-taking. There is no getting around that fact and it’s for this reason that trading can stir up all sorts of emotions. Trading for the excitement or trading to win back losses must be avoided at all costs. The successful trader has learnt the skill to never chase losses or trade for anything but professional reasons.
Finally, all traders must exhibit perseverance if they are to succeed. Forex trading is not something that comes naturally, so only those who work through the losses and difficult periods will come out on top.