3 Things Successful Traders Don't Do
There are certainly some things that traders should avoid at all cost when trading the financial markets. We, at Trading Education, fully understand and accept that every trader has his own unique approach, attitude, tactics and level of experience when it comes to Forex. There is also no particular path or a well-established formula that might lead traders to financial success. Everything can be a result of hard-work, dedication, a huge amount of knowledge, patience and of course, a little bit of talent.
Still, in order to be a successful trader, we believe that there might be some important points to keep in mind and try to stay away from once you dive into the world of trading. The following guidelines can assist you and give you an additional insight on your trading future. Check them out:
Forgetting to put a stop-loss
Every successful trader is well aware of the fact that there’s simply no way you can know everything. However, often traders encounter a situation after which they understand that sometimes even though they possess a vast amount of trading knowledge, even a small little detail escaping their mind can become the difference between a huge loss or no loss at all. What we’re trying to say is that traders need to guess not only the asset’s general movement but also the level at which it will be at any given time of the day. This is quite impossible unless, of course, you’re a fortune teller.
Sometimes this is the assumption you’re making when you decide not to put a stop-loss. Traders make money out of steep price changes, not from a couple of days worth of winning streaks. They must buy low and sell high all the time, so that the traders can multiply their investments. With this in mind, you as a trader might find that it’s a better strategy to focus on limiting your losses (by using a stop-loss) and taking your profit when reaching your target. This has proven to be a good strategy for a number of successful traders.
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Stop learning new things
Many old-time traders who often lack convincing track records might tell you that you don’t need to know about China as the EUR/USD is a “shoo-in” if you advise them to explore new data to add to their analysis. Most of those old-school traders get only high-tide and low-tide results, because they haven’t adjusted to the thought that our world and the markets with it, has changed a lot. We think that in order to continue being a good trader, you certainly need to upgrade not only your skillset and mindset but also learn to keep up with all the new information and technologies and of course, act accordingly.
Successful traders explore new markets and try to spot a better opportunity in different assets or different currency pairs. There’s, however, no way for you to know and be able to detect these opportunities unless you are not willing to keep learning and keeping up with the latest news and trends in marketing.
Listen to many opinions
Traders need to keep in mind that everything they hear about trading, other than official facts and statistics, is often just a mere opinion. Depending on one’s biases, traders can interpret those opinions in different ways.
Let’s say that the Chair of the Federal Reserve, Janet Yellen says that she will gradually raise interest rates. This might be one of the most diversely interpreted claims in the history of trading. The upcoming predictions and opinions might range because whether the Fed is considered dovish or hawkish, there are many factors to consider in a national economy. One more thing to consider is that just because the central bank decides to increase interest rates, that doesn’t necessarily mean that a currency will rise in value.
If you don’t possess the knowledge needed to form an opinion, this would mean that you still have a lot to learn and experience as a trader.
In conclusion, we want to point out that it’s very important for traders to never stop learning and be prepared. Understanding markets, keeping up with the latest trends and updating yourself with knowledge are a few of the must-do activities any trader needs to cover. In addition, as pointed out in our list, there are also things that successful traders should stay away from, such as forgetting to put a stop-loss, listening to too many opinions and stop learning new things. Think about all that when you decide what kind of trader you want to be.
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