The ABC of a Successful Trader
Forex Trading is built upon appropriately educated, disciplined and self-controlled individuals whose years of skill in the field of Foreign Market Exchange has led to true expert of trading skills. A successful trading business roles much like a team of highly adept soldiers: Like good soldiers, specialized traders must visualize the battle before entering into the fight with their opponents. To obtain victory both soldier and trader alike must take the proper steps before diving into action.
The “Holy Market” and its “Commandments”
Market treats all traders equally as such; it is the accurate implementation of strategy that determines the fate of a trader. Being a successful trader is an indication of noticeable work being done hours before markets open in addition as long its working, simply in booking profits and controlling urges fore example that relentlessly instruct you to “go back in and make some more money”
Preparation is half the battle
The meaningful to successful trading is good planning. A great trader is a person who knows exactly what he is looking for. He will put in the time and effort required to research and develop strategic plans that include short- and long-term goals.
Planning includes establishing a list of the actions required for a successful trading day, namely one that is set to provide profits. The first step is to review the trading journal of the past day to prepare for the next trade. The second step is to perform a chart examination to find out which money pairs you will follow. Finally, the third is to prepare your trading platform; do so by reading the latest global economic data from the international economic calendar. This will show whether the currencies you are monitoring have been affected by the latest economic developments.
Develop your trading sense
Having the dexterity to trade is an advantage for any trader, but such skills can take years of practice to develop. Most traders use their “6th sense” to identify and grab opportunities of small price discrepancies both within and between the markets.
Much like a manager, the trader has to rely both on examination and his intuition to identify the trade set ups at the right moment. However, a novice trader can nevertheless develop this sense and make consistent money by rigidly following the rule of risk and reward in Forex trading. This rule demands careful study of what the trader is going to risk.
The best traders are intensely self-aware. They know their limitations and focus on what can go wrong by investing their energy in limiting and controlling their risk.
To unprotected to success in Forex Trading, the most basic step of all is to stick your strategy. A carefully laid plan will guide the trader by the basic and technical examination required to interpret the price movements, translate the technical indicators, and clarify the ideal trading locaiongs. A good trader is a disciplined trader; he is like a hunter, preparing for days to unprotected to the perfect trading set up. He chooses an appropriate stop loss point which marks the amount of permissible risk; he never allows more than the most efficient amount of risk. He is never gripped by greed, fear, hope or regret and does not embellish his expectations of success. His excellent decision-making skills prevent the opinions of others from leading him astray, and he does not over-analyze or over-trade. Despite his success, he remains humble and always provides honest guidance to novice and fellow traders.
Detach from the need of money
Successful traders view trading as an exercise, and they focus on getting the most out of the market in accordance with their plan. In short, a good trader should not be motivated by financial reward. If this rule is broken, as it unfortunately often is, the market will turn and move against any trader who has an excessive desire for money.
Greed is the main enemy of all traders. It presents a profound hurdle on the way to the success. Desire for possession must never govern a trader’s actions; the results of such loss of control are always extreme. In small part, trading is an opportunity to make money in a certain amount of time if all rules are obeyed. However, it is also a chance for self-fulfillment and a test of one’s worthiest capacities, and it must be respected as such.
Stand strong like a rock
A good trader must stick to the rules of his strategy. He must not allow emotions like greed, fear, hope and regret to overtake him; these in particular are the four worst emotions for a trader. Consistently profitable traders have an unshakable emotional system in spite of of conditions.
Like greed, dealing with emotions during trading is also a continued challenge. The first thing that a trader must do is follow a strategy that is comfortable for him. To avoid emotions, the trader has to go into trading with realistic expectations; bet a logical amount of money on a trade; and learn to enjoy trading by risking less money, gaining experience, and developing belief in his strategy.
Adapt to change
The very best traders are always eager to learn and enhance their skills to keep up with the continuing changes in the market and technology. A trader should be flexible enough to cope with the technological advances and read intensively.
In the regularly changing Forex ecosystem, the trader must be flexible. If the market throws something unexpected at him, the trader should be able to analyze it and take action quickly. Success in the Forex market demands a non-stop learning course of action by which traders come to understand the volatility of the market and in return gain the skill needed to make profits.
Good decision-making skills
A successful trader must possess excellent decision-making skills. Once you realize that your trade is going to close at a loss, exit closest. Successful trading is mainly based on good decision-making and is highly related to the relevance of the present data collected. Successful traders are also independent in their decision making.
The dominant difference between the specialized Forex trader and the beginner is that the first knows exactly what he is looking for and when to go into the market.
Successful Forex brokers who gain recognition respect each of these rules. They work hard to be successful and already harder to stay in front and keep profitable. They know that the market will reject those who disobey these rules in favor of money because trading is a practice of passion not of greed.
The successful trader
George Soros attained international recognition when he toppled the Bank of England on September 16, 1992, a day that is preserved in history as “Black Wednesday”. He was given the nickname “the man who broke the Bank of England” because Britain was then forced to abandon the Exchange Rate Mechanism aimed at fixing the pound’s rate to the Deutschmark.
Soros risked $10 billion and generated $1 billion in profit in a single day.
“The money that I made on this particular transaction would be estimated at about $1 billion. We very simply used the forward market-you borrow sterling and you sell the sterling that you have borrowed. And then you buy back the sterling when the loan expires”. (Soros, 1992)
George Soros was also accused of triggering the Asian financial crisis by selling the Thai baht and Malaysian riggit short in 1997. Thailand proactively spent almost $7 billion to protect the baht against speculators and finally asked the International Monetary Fund for its help. In The Crisis of Global Capitalism: Open Society abundant, Soros (1998) responded, “The chief Minister Mahatir of Malaysia accused me of causing the crisis, a wholly unfounded accusation… We were not sellers of the money during or several months before the crisis; on the contrary… we were purchasing ringgits to realize profits on our earlier speculation”.
Soros attained more than $790 million in this trade. “It’s not whether you’re right or wrong that’s important, but how much money you make when you’re right and how much you lose when you’re wrong”, he summarizes.
The 3rd most notorious trade that Soros ever made came in 2012, when he recognized the possibility that the yen could go down after the damage that Japan’s economy had suffered during the devastating tsunami of 2011. Sure enough, the yen did indeed weaken, and when it did, in order to raise the economic situation, many speculators opened USD/JPY locaiongs betting that the value of the dollar would rise against the yen. In this case, Soros attained $1.4 billion.
The main technique of Soros and other top-notch traders is to identify upcoming vulnerabilities in a country and then go right after money before it falls. A money pays off better when its rate is fixed in relation to other currencies, as in the case of the pound and Thai baht.
unprotected countries try to buy up their money when it is being sold, as people can turn around and sell the money themselves. These countries do so in an effort to artificially sustain the fixed rate. However, this artificial balance is very sensitive, and when the countries cannot fight the market forces any longer, the balance collapses. This is exactly what happened in the Soros situations.
As Soros demonstrates, a threat for others can turn into a profound opportunity for traders who are alert and prepared to act. Soros is an example of a good soldier who used his disciplined mindset, an analytical approach, and all his market commandments to become a successful money trader. He both masterfully and calmly conducted himself within the money war market and demonstrated a combination of patience with discipline to clarify the perfect time to execute his trades. Clearly, an adept soldier’s qualities can become the qualities of a great money trader in addition.