The ABC’s of a successful trader
Forex Trading is based on properly educated, disciplined and self-controlled people whose years of experience in the field of foreign exchange have led to a true mastery of trading skills. A successful trading business functions like a team of highly skilled soldiers: Like good soldiers, professional traders must visualize the battle before going into battle with their opponents. To ensure victory, both the soldier and the trader must take the proper steps before going into action.
The “Sacred Market” and its “Commandments”
The market treats all traders equally as such; it is the precise implementation of the strategy that determines the fate of a trader. Being a successful trader is an indication of outstanding work done hours before the markets open, as well as long running, simply posting profits and controlling impulses, for example, that incessantly tell you to “come back and make more money.” .
Preparation is half the battle
The key to a successful negotiation is good planning. A great trader is a person who knows exactly what he is looking for. He will spend the time and effort to research and develop strategic plans that encompass both short-term and long-term goals.
Planning includes establishing a list of actions required for a successful trading day, that is, one that is set to generate profit. The first step is to review the previous day’s trading journal to prepare for the next trade. The second step is to perform chart analysis to find out which currency pairs to 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 reveal if the currencies you are monitoring have been affected by the latest economic developments.
Develop your business sense
Having the skill to trade is an asset to any trader, but such skills can take years of practice to develop. Most traders use their “sixth sense” to spot and take advantage of opportunities for small price discrepancies both within and between markets.
Just like a manager, the trader must rely on both analysis and his intuition to spot trade setups at the right time. However, a novice trader can still develop this sense and make money consistently by strictly following the principle of risk and reward in Forex trading. This principle demands a careful study of what the trader is going to risk.
discipline 100%
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 achieve success in Forex Trading, the most essential step of all is to stick to your strategy. A carefully designed plan will guide the trader through the fundamental and technical analysis required to interpret price movements, translate technical indicators, and identify ideal trading positions. A good trader is a disciplined trader; he is like a hunter, preparing for days to achieve the perfect trade setup. Choose an appropriate stop loss point that marks the amount of acceptable risk; it never allows more than the most efficient amount of risk. He never gets caught up in greed, fear, hope or regret and does not exaggerate his expectations of success. His excellent decision-making skills prevent him from being misled by the opinions of others, and he does not overanalyze or trade. Despite his success, he remains humble and always provides honest guidance to novice and fellow traders.
Letting go of the need for money
Successful traders view trading as an exercise and focus on getting the most out of the market according to their plan. In short, a good trader should not be motivated by financial reward. If this rule is broken, as 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 obstacle on the road to success. The desire for possession should never govern the actions of a merchant; the results of such a loss of control are always catastrophic. In a small part, trading is an opportunity to make money in a certain period of time if all the rules are obeyed. However, it is also an opportunity for self-realization and a test of one’s worthiest abilities, and should be respected as such.
Stay strong as 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 overcome him; these in particular are the four worst emotions for a trader. Consistently profitable traders have an unshakable emotional system regardless of the conditions.
Just like greed, dealing with emotions during trading is also a constant challenge. The first thing a trader should do is follow a strategy that is comfortable for him. To avoid emotions, the trader must enter the trade with realistic expectations; bet a logical amount of money on a trade; and he learns to enjoy trading by risking less money, gaining experience and developing confidence in his strategy.
adapt to change
The best traders are always eager to learn and improve their skills to keep up with the continuous changes in the market and technology. A trader must be flexible enough to cope with technological advances and read intensively.
In the ever-changing Forex environment, the trader must be flexible. If the market throws something unexpected at you, the trader should be able to analyze it and take action quickly. Success in the Forex market demands a continuous learning process through which traders come to understand the volatility of the market and, in return, gain the experience necessary to make a profit.
Good decision making skills.
A successful trader must possess excellent decision-making skills. Once he realizes that your trade will be closed at a loss, he immediately exits. Successful trading is primarily based on good decision making and is highly related to the relevance of the currently collected data. Successful traders are also independent in their decision making.
The main difference between the professional Forex trader and the beginner is that the former knows exactly what he is looking for and when to enter the market.
Successful Forex brokers who get recognition abide by each of these rules. They work hard to be successful and even harder to stay ahead and remain profitable. They know that the market will reject those who break these rules in favor of money because trading is a practice of passion, not greed.
The successful trader
George Soros gained international recognition when he overthrew the Bank of England on September 16, 1992, a day that goes down in history as “Black Wednesday.” He was given the nickname “the man who broke the Bank of England” because Britain was forced to abandon the Exchange Rate Mechanism intended to fix the exchange rate of the pound to the German mark.
Soros risked $10 billion and generated $1 billion in profit in a single day.
“The money I made on this particular transaction is estimated to be around a billion dollars. We just use the forward market: you borrow sterling and sell the sterling you’ve borrowed. And then you buy the sterling back when the loan expires. (Soros, 1992)
George Soros was also accused of sparking the Asian financial crisis by shorting the Thai baht and Malaysian riggit in 1997. Thailand proactively spent nearly $7 billion to protect the baht against speculators, eventually asking the International Monetary Fund for help. International. In The Crisis of Global Capitalism: Open Society Endangered, Soros (1998) responded: “Prime Minister Mahatir of Malaysia accused me of causing the crisis, a totally baseless accusation… We were not sellers of the currency during or several months before” . the crisis; rather…we were buying rings to profit from our earlier speculation.”
Soros made more than $790 million in this trade. “The important thing is not whether you are right or wrong, but how much money you earn when you are right and how much you lose when you are wrong,” she sums up.
The third most high-profile move Soros made came in 2012, when he acknowledged the possibility that the yen could fall after the damage to Japan’s economy during the devastating 2011 tsunami. Sure enough, the yen did weaken, and when it did, in order to boost the economic situation, many speculators opened USD/JPY positions betting that the value of the dollar would rise against the yen. In this case, Soros won $1.4 billion.
The main technique of Soros and other top-tier traders is to spot upcoming vulnerabilities in a country and then go after the coin before it crashes. A currency pays best when its rate is fixed relative to other currencies, such as the pound and the Thai baht.
Vulnerable countries try to buy their currency when it sells, as people can turn around and sell the currency themselves. These countries do so in an effort to artificially support the fixed rate. However, this artificial balance is very sensitive, and when countries can no longer fight the forces of the market, the balance collapses. This is exactly what happened in the Soros cases.
As Soros demonstrates, a threat to others can become a great opportunity for traders who are alert and ready to act. Soros is an example of a good soldier who used his disciplined mindset, analytical approach and all of his trading commandments to become a successful forex trader. He masterfully and calmly conducted himself in the forex war market and demonstrated a combination of patience and discipline to identify the perfect time to execute his trades. Clearly, the qualities of a skilled soldier can also become the qualities of a great forex trader.