Myths vs. Truths: 8 Things Successful Forex Traders Want You to Know
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Though trading on the foreign exchange market is getting more and more popular, it is still hard to distinguish myth from reality.
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8 Things Successful Forex Traders Won’t Say
While many forex brokers and traders present forex trading as an exciting and profitable investment endeavour, the truth is that there’s a dark side to forex trading.
With numerous misconceptions and misleading statements circulating online, it’s hard to understand what makes successful traders excel in forex.
Though we at Trading Education believe that forex trading can be a potentially successful business, we want traders to discover the truth about the market.
So, if you also want to learn more about forex trading and the secrets of the big fish, let’s start with eight things that you won’t hear from a successful forex trader:
#1 A successful forex trader will never say “I’m self-taught.”
The very first thing any successful forex trader will share with you is that proper trading education is crucial to success. Because even if you have a genius IQ score, there’s no way you can learn everything about forex by yourself.
Though we agree that successful traders can learn an awful lot about forex trading by practicing, it’s highly unlikely that self-proclaimed traders can master forex trading without any extra help. There’s nothing to be ashamed of! To seek help is human.
Whether you decide to observe other traders or to sign up for a training course, a truly successful forex trader will be willing to use different learning materials and learn from other traders. For forex beginners, it is particularly important to find a course, a mentor, or a social network group.
When it comes to mastering forex trading, let’s not forget that you don’t need a degree to get started. Trading is all about trading skills and emotional intelligence, not diplomas. Even if you are not a theoretical physicist who works with unclear formulas, by establishing healthy trading habits and discipline, you can still become a successful trader.
Oh, and don’t expect your learning journey to be smooth! The path to forex success is often rocky and filled with losses. If anything, learning from your mistakes will make you stronger and more successful in the long run.
#2 A successful forex trader will never say “I never lose.”
The second thing you’ll never hear from a successful trader is that they never lose money. Simply because that’s not possible!
Forex is highly dynamic, so losses are an inevitable and natural part of trading. If you hear someone say they always win, they’re most likely exaggerating their success. Success is not measured in big short-term wins but trading consistency in the long-term.
The true mark of a successful trader is their ability to embrace the market with its ups and downs. Forex is not about winning all the time. Being able to win and lose is part of the forex trading game – something you should accept in order to become a good forex player.
Here we should note that to be able to accept losses, one has to trade only money they can afford to lose.
#3 A successful trader will never say “Risk management is not important.”
While losing money is inevitable in forex, risk management can reduce losses. Thus, a successful trader will never tell other traders that risk management is unimportant.
As with other types of trading, determining how much you can reasonably afford to risk is crucial. If anyone tries to tell you that a risk management strategy is not needed, better ignore their advice.
The forex market can be really unpredictable; so even if you are great at analysing signals and indicators, you’ll never be able to avoid risks. Were you able to predict the ongoing pandemic? Exactly!
Since we can’t predict the market, at least we should be able to decide how much we can risk. Without a risk management strategy we will become irrational and emotional – just like prehistoric people fighting for food. But hey! There’s no place for intense emotions, overtrading, and fear in trading!
#4 A successful trader will never say “I am 90% accurate.”
If a trader tells you they are 90% accurate when predicting short-term movements based on chart readings, simply take that claim with a pinch of salt. As stated above, the market is so dynamic that a success rate of over 90% in the long-term is highly unlikely. While some lucky traders win big, we shouldn’t forget that forex is not gambling.
In fact, 90% of traders lose money and quit, while the most successful traders usually don’t hit a success rate of 70%. You can lie to people, but you can’t argue with numbers.
Lying to yourself and others about your chances can only result in bad investments. A good trader doesn’t expect every deal to be a home run. Great deals do occur from time to time, but the forex market is too big and chaotic for them to be reliable.
Thus, don’t put too much pressure on yourself to succeed 100%. The more you want to make a profit, the less likely to win. There’s no place for greed in forex. A great writer may create masterpieces, a great musician may compose amazing musical pieces, but a great forex trader should simply rely on small victories.
#5 A successful forex trader will never say “You should trade actively every single day.”
If you think that successful forex traders trade frantically, think twice. While day traders do trade with high frequency, there are many situations when taking a break from active market trading is the right move to make.
For example, if there is a sudden political event, the market might take a hit, making it wise to take a break till its volatility settles. Sometimes not doing anything can help you achieve more than any Herculean effort.
That’s right! A successful trader has patience. Making too many irrational choices only increases the chances of committing a mistake. After all, the market is not going anywhere and the only one you are rushing to compete with is You.
And don’t forget that like most things in life, it’s good to take a break to enjoy the fruits of your labours. It can be beneficial not only for your bank balance but for your mental health, too.
Successful traders are also successful individuals who value their free time and loved ones.
#6 A successful trader will never say “My strategy is profitable in all market conditions.”
“My strategy is profitable in all market conditions”? What a joke! This is the sixth statement that you’ll never hear from a successful market trader.
It takes a lot of practice and hours of trial and mistakes to establish a successful strategy. And yet, this strategy cannot be profitable 100%. As expert John Maynard Keynes said, “The market can remain irrational for longer than you or I can remain solvent.”
When it comes to forex trading, there is no such thing as an infallible strategy that can be successful in any market climate. If there were, all traders would be millionaires like Bill Lipschutz by now.
There’s also the fact that the forex market changes constantly, so trading strategies that work well in one situation won’t always translate into another. Some methods may become completely obsolete, while others may gain relevance once the wheels start turning.
Thus, you should always follow the market and never miss out on new developments, news, and shifts. Follow the trends and avoid fighting battles you can’t win.
Take adding to a loser, for instance; an act forced by wishful thinking and emotions! If a trade is going down, why would you add more to it? Continuing to add to a losing trade is not only risky, but also a financial disaster.
When it comes down to it, knowing when to quit is an essential skill in forex trading. Because 100% success is simply not possible!
#7 A successful forex trader will never say “I know everything there is to know about forex.”
Really? No matter what you decide to invest in, there’s no way you know everything about the industry that interests you. Forex trading is no exception!
In forex, there is always more to learn; advances in technologies, economic factors, and so on and on. The industry is constantly exchanging, so don’t be afraid to learn new things!
Even if you are an active learner who can learn forex trading in one month, don’t underestimate the importance of life-long learning. Continuous training will only help you grow your trades and improve your financial mindset.
And don’t forget that your mental mistakes can be your best teacher. The ability to learn from your mistakes, along with a profitable trading strategy, can help you become a successful trader.
#8 A successful forex trader won’t say “Forex trading is exciting.”
The last thing you’ll never hear from a successful forex trader is that forex trading is exciting. Okay, okay, we do agree that trading comes with lots of adrenaline and hopes.
For instance, many beginners start trading forex in hopes of quitting their full-time jobs and making some fast money on the beach. Other traders get excited about fancy gadgets, platforms with advanced charts, and apps with bells and whistles, when all you need to get started is a computing device and internet connection.
Yet, consistent trading can’t be exciting. It’s just work after all! Your trading routine can even get kind of boring.
But that’s okay! Because a successful trader can regulate their emotions and separate their personal life from trading! We don’t need to live on the edge to feel fulfilled, do we?!
- Though forex trading is increasing in popularity, there are still many misconceptions and myths circulating online.
- An honest and successful trader will tell you that winning and losing are two sides of the same coin, so don’t believe in 100% success.
- While there’s no formula to success, expert traders advise investing in trading education and self-control.
Were you surprised by these pieces of trading advice? Would you invest in trading education and dive into the world of forex? Let us know in the comments below.
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