In the world of Forex trading, the most successful traits a trader may
has nothing to do about who gets to play the good or bad guy.
Rather, it’s all about the traits that increase your tendency to make
wise – or unwise – moves.
Cut Your Losses Early
Traders hear this very sage advice all this time, but most ignore it – to
their everlasting regret. Hope is a powerful motivator. And it’s always
good to be optimistic. However, you have to be careful about choosing
what to be hopeful for. Cutting your losses early does not mean you’re
quitting. It simply means it’s time to move on and try another
currency pair. It really is that simple.
Don’t Fix What’s Not Broken
It is a cliché, but that doesn’t stop it from being true. In fact, ignoring
clichéd advice is the quintessential example of how people insist on
leaving the path to success to take a wrong turn. Why put a
stop to an account that’s doing well? Although there’s a chance for
trading pairs that are doing so good to plummet and suffer a huge
drop in their rates, these things rarely happen without any noticeable
signs. In most cases, you will have enough clues to warn you and fall
back to Trait #1: cutting your losses early.
Know The Right Time To Trade
Some people just like being the exceptions to the rule for the sake of
it. However, that kind of attitude is dangerous for a Forex trader to
adopt. More often than not, it will lead to heavy trading losses,
enough to break the bank for good.
Timing is everything in Forex trading. You may like to think of it as a
subjective factor, but studies show that timing is actually objective.
Numerous experts have proven with their case studies that the best
time to trade in the Forex market is between 1900h – 1100h in the UK
time, which in Eastern Time will be around 1400h to 0600h.
Know The Best Times To Use Trading Breakouts Versus
Range Trading
Rather than letting mere instinct be your guide, there’s a surer way
of determining which of these two essential trading strategies is best
to use.
Range trading is best to use during active hours as your
strategies are given sufficient time to work.
Trading breakouts are best to use during volatile hours as they
can take advantage of the extreme changes that currency pairs
will undergo.
Make Use Of An Effective Leverage
How much leverage you allow yourself to use will always have a
considerable impact on your trading strategies and its eventual
outcomes. There are many different formulas you can use to compute
how much leverage you can afford to use, but at the end of the day the
The factors listed below will prove most important.
Keep it conservative.
Always apply a stop-loss point to your strategy.
Risk tolerance levels do not have to be proportionate with
leverage.
There are always exceptions to the rule, and those are simply an
inevitable part of the game. Even if things do not go your way, the
above traits will serve to minimize your losses and increase your
winnings