10 Tips From Successful Traders

10 Tips From Successful Traders

When it comes to our forex trading, we all want to be successful, we all want to be able to sit back and look at what we have achieved, knowing that we have potentially set ourselves up for life. Sadly, things don’t always go that way, especially when we are doing it on our own. Sometimes we need a little help or advice from those that have made it, from those expert forex traders that have already made their successes and are now here to hand out some forex trading tips. Or rather 10 Tips From Successful Traders.

Today we will be looking at 10 tips from successful forex traders that you can hopefully use to get you going in the right direction for your own trading success.

Don’t chase win percentages:

“I don’t think you can consistently be a winning trader if you’re banking on being right more than 50% of the time. You have to figure out how to make money being right only 20 to 30% of the time.” —Bill Lipschutz

This is one of the best-known secrets to trading and forex trading, you do not need to win the majority of the time to be successful. If you are trying to do that then you will either be making far too many trades. Holding onto them for too long, or making trades against your trading plan. Instead, adjust your strategy to better suit the markets and the probability that you will be wrong more than right.

Learn to lose:

Learn To Lose
Learn To Lose

“You have to learn how to lose; it is more important than learning how to win.” —Mark Weinstein

This may sound counterproductive, but it is very true. Winning is great, we feel great after a win, but what about a loss? We can feel down, depressed and want to give up. Instead, factor in those losses, control your emotions and learn to get past them, use them to build your knowledge and use them to gather future success.

A huge part of forex trading is learning how to take your losses and how to then develop your trading strategy to help cope with those situations better in the future. Having a losing trade is far from the end of the world, and can be just as valuable as a winning trade.

Get out when you need to:

“If I have positions going against me, I get right out; if they are going for me, I keep them… Risk control is the most important thing in trading. If you have a losing position that is making you uncomfortable, the solution is very simple: get out, because you can always get back in.” —Paul Tudor Jones

Sometimes you are adamant that your trade idea is right, you want to stick with it been when the markets are going away from you, this is not something that you want to be doing. You need to get out and start again, save your balance and protect your capital. Do not hold on to trades that could simply increase your losses.

Losing money is not nice, but sometimes it is necessary. These losses should be incorporated into your trading strategies to help alleviate some of the stress and to ensure the long term success of your currency trading.

Always manage risks:

10 Tips From Successful Traders
Always Manage Risk

“Whenever I enter a position, I have a predetermined stop [loss]. That is the only way I can sleep. I know where I’m getting out before I get in. The position size on a trade is determined by the stop [loss], and the stop is determined on a technical basis….I always place my stop beyond some technical barrier.” —Bruce Kovner

Risk is the biggest threat when it comes to trading and forex, so a tip that so many successful traders give is that you need to manage it. Set stop losses, have a risk to reward ratio in mind and then stick to them, as soon as you alter them or stray away from them, disaster can occur.

The forex market is not there to be your friend, so you cant expect every forex trader that gets involved with it will be profitable. The majority will lose money. This is all down to them not having the best risk management in place, trading is a high risk, so do what you can to alleviate some of that risk whenever you can.

Analyse, don’t forecast:

“I believe in analysis and not forecasting.” — Nicolas Darvas

Quite a simple one here, you should be basing your trades and trading strategies on what you can see in the markets, not what you think will happen, that will only lead to bad trades with no backing from actual figures and analysis.

Using both technical analysis and fundamental analysis to work out your trades rather than just what you instantly see on the charts within your trading platform. Try to look at more than one currency pair when doing your trading analysis too.

Don’t get emotional:

Don't Get Emotional
Don’t Get Emotional

“The key to trading success is emotional discipline. If intelligence were the key, there would be a lot more people making money trading… I know this will sound like a cliché, but the single most important reason that people lose money in the financial markets is that they don’t cut their losses short.” —Victor Sperandeo

One of the keys to being a successful forex trader is that you do not let emotions get the better of you, as soon as you do, you will start to make mistakes, take a step back if you feel your emotions building up, the markets will still be there after your break and you will have a much clearer mind.

Emotions can have a hugely detrimental effect on your forex trading, it can cause you to lose focus, become greedy, to throw your current trading plan and trading strategies out of the window. Trading forex needs to be done with a clear mind, if you are having stress, feeling greedy or anything like that, then take a step back, a successful trader won’t trade in that state, and neither should you.

Trends can be your friend or enemy:

“What seems too high and risky to the majority generally goes higher and what seems low and cheap generally goes lower.”  —William O’Neil

It can be pretty hard to guess the end of a trend, those that try to do it will often get burnt, don’t jump in just because you think it is the end or a turning point, wait for confirmations within the market itself.

A lot of people love to trade trends and their entire trading strategy is based around trends, using things like price action, different time frames and looking at multiple currency pairs. What you need to do though is enter the trend based on your trading analysis and not because it looks like it will continue or that it looks like it may change.

If you have a losing trade that is on a trend, think about dropping it, however, if you have a winning trade and the market looks like it may continue, then by all means hold onto it and ride it until it is profitable and the markets turn.

It isn’t a game for just smart people:

Smart People
Smart People

“You don’t need to be a rocket scientist. Investing is not a game where the guy with the 160 IQ beats the guy with 130 IQ.”  —Warren Buffett

A lot of people are afraid of getting started as it looks so complicated from the outside, but once you are in and have started to look at what is actually involved in trading forex, it is far simpler. It is all about learning, not simply being the smartest, there are many tools out there to help you out that will level the playing field for pretty much all traders, new and old. Having said that, forex trading is certainly not suitable for all investors.

Don’t get us wrong, it helps to have a basic understanding of things like maths, however, to perform both technical analysis as well as the fundamental analysis does not require many brains at all.

With the right trading platform, you can get pretty much everything on the screen in front of you through the use of indicators. Price action can be done for you, risk management can be done pretty much for you, the forex markets can be analysed for you, taking out a lot of the thinking that puts a lot of new traders off.

Cut and control your losses:

“The elements of good trading are (1) cutting losses, (2) cutting losses, and (3) cutting losses. If you can follow these three rules, you may have a chance.”  — Ed Seykota

You need to learn to protect your accounts and assets. If you let your losses grow, you will not be able to trade more and more importantly, you will be putting yourself at unnecessary risk. Control your losses, cut them and accept them when you can so you can move on to the next trade that is in line with our strategy.

Many traders will look at their losses on a single time frame, but consider more when working out whether to cut your losing trades or not. Just whatever you do, do not hold onto them like so many traders do if there is no analysis telling you to hold on.

Do not go just for profits

“Money is just something you need in case you do not die tomorrow. Let this be a reminder for you not to obsess over profits and losses. In whatever you do, strive for enjoyment, focus, contentment, humility, openness… Paradoxically (and as an unintended consequence) your trading performance will improve significantly.”  — Yvan Byeajee

Trading should be for more than just profits, you need to ensure that you are enjoying what you do, if you focus only on the money, you will lose track of what trading is really about and you are far more likely to make mistakes.

It can be tempting and a lot of new traders come into trading just for the profits, just to make money on the markets, but they don’t consider whether the market conditions are in a position to allow that and so by trading they are putting their accounts and capital under high risk. Blind trading is certainly not the best trading, analyse the markets before doing anything, all good forex traders will take your time, you are here to make money, you don’t want to end up losing money.

Conclusion

Those are 10 tips from successful traders, do you agree with them? There are thousands of more words of advice that can be given, it is, however, important to remember that your trading journey is yours, you need to make it your own and develop your own style, only then will you truly be able to class yourself as a successful trader. Treat the forex market with respect, learn your trading platform, trade the right currency pairs, learn from other traders, and most importantly, protect your account, that is how you become a profitable trader.

Do you have any forex trading tips of your own?

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