Besides learning the mechanics of Forex Trading and creating a Trading Strategy, for a trader to be successful, the correct trading psychology has to be cultivated.
This is as huge subject that needs extensive studying and time so this is by no means a complete source. It is designed to get the trader to start thinking along the correct lines.
Below is a list of 4 elements which constitute the correct trading psychology:
1. Take Complete Responsibility
For the successful trader knows every action he takes, every decision he makes he ,and only he, is responsible for that action. You will never meet a successful trader who is looking to blame someone else, or something else for the consequences of his results. It just will not happen. You see, when you accept 100%, no questions asked responsibility for all your actions you close the door to 'excuses' behind you. When something goes wrong instead of looking for someone else to shoulder the blame, you will accept responsibility, note it down and vow never to repeat it again. Simply, you are willing to accept you are going to make mistakes, but more importantly, you are going to learn and never repeat those mistakes. A vital component of any winning trader.
2. Have a System that fits you
Every successful trader, has a system that fits them. Some are long term, some mechanical, some intuitive, day traders, scalpers, arbitrage, value and momentum. The system its self is not the important factor. What is? Is that the system fits their unique personality Too many traders try to copy the latest hot fad in trading. Right now that would be day trading. But that style of trading will not suite every-one. To be a successful day trader you have to love the short term up and downs of the market during the day and being in contact with quotes for hours at a time. Yes, there are a number of traders making very good incomes from day trading, but there's many more who lose their shirts within a couple of months and don't even find out whether day trading is suited to their temperament. It's a little like choosing a career. I remember reading a book some time ago about the world's best managers. And one characteristic the author emphasized with all these top achievers was their LOVE for their chosen careers. Most of them said they couldn't believe they were getting paid to do something they loved so much. It's no different in trading You will only be a top trader if you trade a system which you simply love to trade. You wouldn't swap that way of trading for anything. And the profits you make, well that's just icing on the cake. How do you find a system you are happy with? You have to work backwards by first finding your objectives.
3. Plan a trade and trade the plan
Without doubt, no trader will last long if he doesn't plan every trade. But there is absolutely no point in making a plan for a trade if you are not disciplined enough to follow it. A plan should cater for every eventuality. As Richard Dennis (Turtles fame) Said 'Don't worry about where the prices are going. Worry about what you are going to do when they get there.' Think about what is being said here. Once you put your money down on a trade you cannot control the prices. So stop worrying about what could happen and concentrate on you trigger points and what you will do when these points are violated. By doing this your trading stops being emotional and now becomes very systematic and stress free.
4. Work hard at learning how to trade properly and keep working
This is no different from any other trade. Would you expect to become a brain surgeon after attending a week-end seminar and reading a few books? Yet, why do so many people expect to become a Market Wizard within such a short period of time? If you ever have the privilege to ask questions to a successful trader you'll realize just how much effort, time, determination and lost money it took until they arrived at where they are. Being a Consistent forex market winner is no different from being a top lawyer, doctor or a businessman.
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