The two most important character traits to succeed in forex trading: Discipline and patience | London Business News | Londonlovesbusiness.com

The forex market is such a complex and a vast space, where traders deal with massive volumes of information every day in an effort to make profitable trades. Some of the information propagated across media and training webinars include identifying a good forex broker and having a sound trading strategy accompanied by stop loss for every trade executed.

Unfortunately, rarely is trading psychology, patience and discipline, allocated enough time when training new traders because many do not recognise its importance in their trading career. But since the financial market is a double-edged sword, it justly slams any trader who is either indisciplined or impatient. This explains why over 90% of forex traders fail to manoeuvre successfully in the market despite having both a good strategy and forex broker.

Before we dive into the details here, we recommend reading this report of the top U.K. forex brokers by The Tokenist, and signing up for one that meets your criteria. As we walk through the steps to becoming a successful FX trader, you’ll want to have your account open in a separate tab to follow along.

In this article, we will learn the importance of two virtues, patience and discipline regarding the execution of trades. The information in this article helps nullify the idea of forex being a get-rich-quick scheme adopted by many traders.

How essential is patience when trading?

First, developing the right strategy and skills takes time. But the act of waiting for the excellent trading opportunities to pop up, entering and exiting trades requires a lot of patience. Therefore, it helps traders eliminate FOMO (fear of missing out), an emotional turmoil experienced by traders when they haven’t taken a trade.

Although everyone wants to increase their gains, maximise any potential price movement and volatility, being calm is vital to avoid overtrading. Patience assumes the role of keeping you at peace until the appearance of the right trading opportunity.

Second, despite the strategy or the broker adopted, losses are part of the trading arena, and traders should handle them appropriately. We all agree that a sequence of losses can drain confidence and ultimately quitting the trading hassles. But this should not be the case for any trader who wishes to thrive in the market. Instead, patience helps one to learn from their mistakes instead of sweeping them under the carpet. Patiently, a trader distinguishes what worked from what didn’t, regain trading momentum and get back into the game.

Forex trading involves two vital facets: research and making decisions. Understanding the working of the market takes time to know the best currencies to trade and which setups to take. This process helps a trader develop a plan and stick to it despite unexpected market movements which would sway the impatient traders to make spontaneous decisions.

Understanding technical and fundamental analysis helps a trader make informed decisions and remain calm instead of exiting trades early or missing out on excellent opportunities because of an emotional rollercoaster.

Why should you be a disciplined trader?

To succeed in the trading business, every trader should develop a sound strategy taking care of risk-reward ratio. Indiscipline and impatience manifest in overleveraging and changing of strategies with each trader. A disciplined trader takes note of risks versus rewards, account balance, trading sessions and market fundamentals.

This level of discipline can be developed in demo accounts used to test strategies without losing real money. By so doing, one develops a risk management lifestyle, governing the stop-loss and take-profit for every trade. Disciplined traders also overcome greedy emotions characterised by using huge lot sizes.

As we said earlier, losses and backfiring of trades are normal when trading. No matter the causes of a drawdown in a trader, disciplined traders keep a journal which helps them track and learn from past traders; hence, improving their strategies. The best definition of discipline is doing what is expected and anticipating improvement. Therefore, staying focused is the character of any successful trader, no matter the failures encountered on the way.

Although patience and discipline are essential, success in forex comes about through learning and experience reaped over time. Apart from having a good strategy and the right trading psychology, having the right broker such as Etoro and Oanda, is essential due to its tolerable spreads. Check out this link to learn more about brokers.

The above information does not constitute any form of advice or recommendation by London Loves Business and is not intended to be relied upon by users in making (or refraining from making) any investment decisions. Appropriate independent advice should be obtained before making any such decision.