All right, I’m going to go ahead and tell you the one skill you need to become a successful forex trader pretty much right up front (precisely one paragraph from now), but please read the rest of the article anyway. You just might pick up some extra valuable information.
Beyond being able to do basic math to the extent that you at least know whether you’re making or losing money, there are a number of skills that are helpful in becoming a consistently winning trader.
Being able to quickly assess and act on market information is one of them.
The best trading opportunities, the chances to enter a market at the most favorable, low-risk price, usually appear for only a brief period of time. You need to recognize them as soon as possible in order to take maximum advantage of trading opportunities.
The One Essential Skill – Persistence
But what’s the one most essential skill to being a successful trader? – Persistence.
I am of the opinion that virtually anyone of average intelligence can learn to become not just a successful, but a hugely profitable forex trader. I think that forex trading can be the road to riches for just about anyone. But that doesn’t mean that becoming a winning forex trader is easy. It takes time, study, and effort.
One of the key ingredients to trading success is simply becoming familiar with how the markets tend to move, learning things like the fact that the currency pair Gbp/Usd is notorious for doing a quick spike in the opposite direction, knocking tons of traders out of the market, right before it makes a big move.
When Gbp/Usd bottomed out in early January of 2017, it did so after gapping down 200 pips lower on a Monday open – by the end of the next trading day, Tuesday, it was 400 pips higher. But you only learn things such as the price movement tendencies of specific currency pairs by spending a lot of time watching the markets trade.
Learning How To Use a Trading Strategy
It also takes time to learn how to best use a trading strategy, regardless of what that trading strategy is.
I stumbled across the primary trading strategy that I use day to day now several years ago, courtesy of another trader who was kind enough to share it with me.
At that point in time, he had already spent a couple of years refining the strategy so that it performed better – more reliably, with greater profits and more minimal losses.
I recognized it as being a solid trading strategy right away, but I spent the next two to three years refining it myself.
And that’s the way learning to trade really well works.
Very few trading strategies are perfect right off the shelf, so to speak. It takes time and persistence to make a trading strategy better, to optimize its performance so that it matches up as best as possible with your own particular trading style.
A Story Of Persistence
Let me share with you a bit of my own history as a trader as a way of hopefully showing you the value of persistence.
I first became enamored with trading in my mid-twenties when I took a job as a broker at a commodity futures trading firm.
At the time, I knew next to nothing about investing. I learned about the various commodity markets, as well as the basics of both technical and fundamental analysis. But the main thing I came away from that job with, after watching clients who made money and clients who lost money, was the firm conviction that one could make a living from trading.
I’ll never forget the wisdom that one client who regularly made money trading shared with me. He was an older gentleman who nearly always had a wry grin on his face. Anyway, he looked across my desk at me one morning and informed me, “Let me tell you something, son:
It’s a lot easier to make money by sending your money to work every morning than by going to work yourself every morning. Money can make money easier than you can make money.”
Anyway, although I was nowhere near knowing how to be a successful trader when I left that job to help out my dad with his new business, I was firmly convinced that I could learn how to trade profitably.
My goal from that day forward was to one day get to the point where I made my living from trading.
Now, do you want to know how long it took me to even remotely approach attaining that goal?
Well, here’s the discouraging or encouraging truth, depending on how you look at it:
It was about another five years before I got to the point where I was even a moderately decent trader.
Let me add the disclaimer that it was several years before I could devote much attention to trading again, so it wasn’t like that was five straight years of working at trading.
During that five year period, there was probably only a total of about two years when I was actively working at mastering the craft of trading. So don’t go thinking that it will necessarily take you five years or more to succeed at this trading business. Just know that it will take some time.
I don’t know of anyone, not even the most successful traders in history, who were excellent traders right away when they first started out. Even the great Jesse Livermore lost his first bankroll in a matter of months and had to borrow money to start all over again.
I know a number of very good forex traders – but I don’t know even one who didn’t blow out their account a time or two on the road to becoming a very good trader.
At any rate, I wasn’t the least bit discouraged by the fact that it took me some time to start being consistently profitable at trading.
Because I knew that, no matter how long it took, once I mastered the craft of trading, I would have the keys to Fort Knox in my hands. From that point on, all I would need to generate money every day was a computer screen, a broker, and an open market.
Even after I got pretty good at commodity trading, I had another learning period to go through when I switched over to primarily trading the forex market.
I was attracted to forex by the huge amount of leverage available – the ability to make a lot of money with just a relatively small amount of money. But every financial market is different – trading stocks isn’t like trading commodities, and trading commodities isn’t like trading forex. (By the way, I’m still not a great stock trader.)
It took me another couple of years to learn the forex market, to get comfortable trading it, and to find trading strategies that worked well in it.
You Can Do This !
Anyway, all modesty aside, I am now a very, very good forex trader.
But between starting out in forex trading and getting to the point where I can honestly say that, I blew out more trading accounts than I can count (or certainly more than I want to remember anyway). Nonetheless, I am now a successful trader.
So the lesson I hope that you take away from this is that you CAN become a successful forex trader. And whether it takes you a few months or a few years to master forex, it’s worth the time and effort and investment in learning – because once you do master it, you have a relatively easy way to make money that doesn’t depend on anyone else.
You don’t have to worry about getting fired or laid off from work, you don’t have to convince someone else to buy something – all you have to do is put your trading skills to work.
I have more than once described forex trading to people as “a licence to print money”. That may be a slight exaggeration, but not by much.
Virtually every trading day, the forex markets present you with good opportunities to rack up cash in your account. I’m much happier – and making much more money – trading on my own than I was working as a broker trying to convince other people to trade.
You, too, can be a successful forex trader, and about all it really takes is firmly resolving to work at it until you are. Set yourself to learning about the markets, learning trading strategies, and then working at using those strategies until you master the craft of trading.
Whatever time, money, and effort you have to put into learning to become a winning forex trader, just look at as tuition and learning in getting a master’s degree in forex trading. From the point when you “graduate” with your degree in forex, all you have to do is turn on your computer five days a week and put your money to work making more money.