Patience and Persistence Trading Allies, or Worst Enemies

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Patience and Persistence: Trading Allies, or Worst Enemies

Becoming a successful trader will require both patience and persistence. In unsuccessful traders these traits are exhibited, but are focused in the wrong direction. When these traits, which can be learned, are applied in the right way, your odds of becoming a better trader dramatically improve.

How Unsuccessful Traders Use Patience and Persistence

If struggling, you may be using these aspects of yourself in the wrong way. Struggling traders typically have no patience in waiting for trades to come them, rather they chase prices, buy new highs and new lows, and basically end up with poor prices that reduce the amount of time the trade spends in the money.

This is done persistently, until the account dries up. Looking for an easy way to make money many traders stop thinking for themselves and blindly trust someone selling them something–a persistent theme throughout life. This is done over and over again, for years sometimes, until the trader finally realizes it is them that needs to start putting in the effort. There is no real work being done because with this method there is always have someone else to blame. Only once full responsibility is taken, is effort likely to pay off in trading.

There is also no patience when it comes to testing a strategy (and testing one’s own ability to implement that strategy) in a demo account. Instead a few hundred dollars is placed in account usually right away, before any testing is completed. This lack of patience usually results in a busted account.

Many traders are patient with losses though, for individual trades and in letting their account run dry. Losses are allowed to run (not applicable to European binary options), and traders will spend years losing money, telling themselves that their patience and persistence will pay off.

This is not true. If you persistently do the wrong thing, and don’t change, you will continue to get the same results you have been.

How Successful Traders Utilize Patience and Persistence

Patience is used to wait for great entries and exits. Trades are not impulsive or based on the emotion of the moment. Patient traders have studied charts and realize that prices move in see-saw patterns, so if you miss a trade there will be another one; prices aren’t chased.

A plan for trading is followed, a method which is implemented for every single trade (see: Anatomy of a Trading Decision and Creating a Trading Plan for guidelines). This is done persistently. No wavering. If the market doesn’t provide the exact trade setup outlined in the trading plan, then the trade isn’t taken. This takes patience.

At the beginning most traders begin with a small account. It is recommended that traders don’t risk more than 1% to 2% of their capital on a single trade. That way a string of losses, especially as a new unproven trader, won’t significantly draw down the account. This takes patience.

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If you start with a $500 and account, and are placing $5 trades and winning, then with patience that account will grow. But you must stick with what is working. This is where persistence pays off. If you are making money with a small account, over time that account will get larger and eventually produce an income. Become impatient, deviate from your plan or risk more than you should, and your persistence won’t pay off—you’ll lose it all.

Notice the Shift

Successful traders utilize these traits in very different ways than unsuccessful ones. Unsuccessful traders have endless patience for losing trades and losing money, successful traders are patient on waiting for high probability trade setups.

Successful and unsuccessful traders are both persistent in applying their approach to the markets, except successful traders only become persistent if their method if it is working. Patience and persistence are required to come up with a working method, yet unsuccessful traders don’t really work to find or implement a working method. Instead they trade off tips, others opinions, and bounce from unproven strategy to unproven strategy.

Patience and persistence are used by the successful trader to grow an account slowly, following a solid plan. A persistent lack of patience drives the unsuccessful trader to make random trades, risk too much and not bother creating a plan, resulting in a drained account.

Successful traders realize that persistence is only beneficial if working off a model which is likely to eventually show positive performance and improvement. If a method is random, based on emotional and impulsive decisions, there is no way to know if performance will improve. This sort of random method should be abandoned; save your money and do something else with it.

Be persistent in finding your method and writing it down, patient with the market for good trade setups, and persistent in following your plan.

Key Forex Trading Strategies to Maximize Your Profit in 2020

Advertising disclosure: All opinions expressed are our own. We may receive compensation for some of our partner brands in this article. However, we only promote brands we trust. Here’s how we make money.

If you are new to the forex trading world, you may think that it is just like any other type of trading. And in a way, it is true. There are some rules that apply to both forex and other types of trading, but there are also some important differences.

So, what are the best tips for forex trading and how to actually implement them? By reading this article, you will take the first (and possibly the most important) step on your way to becoming successful in the realm of forex trading.

Do Your Research on Time

Just like with any other market, if you have money to invest, you won’t face too much opposition from forex either. And that’s the catch. Indeed, getting into forex is relatively easy, but making a substantial profit – not so much.

This means that you have to research the market carefully, paying attention to a number of details such as the most effective trading strategies, the best forex trading platforms , and so on. Some of this information you can read in this article.

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Choose Your Broker Wisely…

A good sports team usually has an expert coach. That’s how it goes in forex too – for successful trading, you need to have a reputable forex broker.

It is your broker’s duty to ensure a fair, safe, secure, and transparent online trading environment. It goes without saying that you should only consider hiring a broker who is licensed and regulated by a reputable regulatory authority like the SEC, NFA, FCA, etc.

Finally, it is important that you select a forex broker who aligns with your personality, trading capabilities, as well as trading style.

… And Your Strategy Too

Speaking of your features as a trader, you need to discover what works for you in terms of the strategies you are using. Not all strategies will work for everyone, and the sooner you realize this, the better.

Here are some of the most common forex trading strategies to consider:

A very popular strategy, scalping is a short-term tactic that involves a high number of trades with a small profit from each.

This one works better for someone who is an old hand at forex trading. Here, the best technical charting time periods are 15 minutes and 1 hour, and you profit from intraday moves.

Swing trading extends over a few days and it allows you to establish and then close out trading positions based on the momentum of the underlying currency pairs.

It’s pretty obvious how this one works. You trade around the time of key news events such as a major economic data release.

Finally, trend trading requires technical analysis in order to identify trend direction and determine the suitable entry points. Here, traders normally take overnight positions.

Use a Practice Account

Forex trading platforms usually come with a practice account (also called a simulated or demo account), which allows you to practice by placing hypothetical trades without a funded account.

Practicing like this can be very useful and help you learn how to use order-entry techniques, saving you money and stress once you start trading with real money.

Start Small

Once you have got the hang of forex trading basics, you can start investing for real. But practicing with fake money and trading with real money is not the same. That is why you need to be careful and start small.

There are a number of factors that can make an impact on your trading, and you can’t really know them all before spending some time on the real market. For example, your trading plan can prove to be completely wrong in practice even though it worked great in theory.

In addition, emotions could give you too much ‘fuel’ and you may end up investing too much money at once just because you let your emotions cloud your reason.

Speaking of which…

Emotions Are Your Enemy

Even if you know and have used various forex trading strategies for a long time, there comes a time when your emotions overtake you and you start making irrational decisions. When angry, stressed, or even overconfident, traders usually face huge losses.

So although it may sound too harsh, in forex trading, emotions are your worst enemy. And instead of succumbing to greed, stress, and anger you should try to:

– maintain a stable and clear mind

– keep awareness of the uncertainties

– focus on facts rather than feelings

Manage Risk

Business involves risks, period. As a forex trader, you need to be aware of those risks and all potential outcomes. If you fail to practice this approach, you may end up with losses that will prevent you from getting back to the forex market.

Therefore, even though it is a cliché, you should never invest more than you are willing to lose.

Also, if you are a newbie, don’t trade with leverage because this can result in great losses. In forex, leverage is a highly advanced and risky trading strategy. It comes from a smaller investment which is used for bigger trades in foreign currency.

Don’t Forget the Taxes

Even though forex trading and cryptocurrency trading are different, both cryptocurrency tax mistakes and forex tax mistakes are quite common. Regardless of your field, you need to be aware of tax regulations in order to trade legally.

Forex trading activities imply earning money, so you need to understand the associated tax regulations. It is best to consult with a qualified and experienced accountant or tax specialist that can help you keep abreast and avoid any surprises that can cost you too much money.

Take Your Time

In the beginning, you will probably feel more ‘productive’ making a larger number of smaller investments, and that is completely fine. As the matter of fact, some of the more experienced traders do this on a regular basis.

However, sometimes your best move is to sit and wait. It sounds too simple, but it is true. Some of the most successful forex traders make only a few big trades a year. This strategy is called a long-term hold strategy and it normally provides higher returns as opposed to active trading.

That is why sometimes you need to invest and take your time, patiently waiting for your profit. And this leads us to the next point.

Patience and Persistence Are Your Friends

As a beginner, you probably think that you will start making a lot of money right from the start. Well, sorry to disappoint you, but that is what most beginners dream of.

Making a profit through forex trading takes time, money, and work. On your way to becoming a successful forex trader, you will face a number of challenges, but it is crucial to stay grounded and persistent.

You can’t get rich overnight. So, practice patience and persistence, and you will get where you want to. However, it will probably take longer than you think.

You Live, You Learn

Lastly, it is very important to realize that forex is an ever-evolving market. And this means that you need to keep up with all the new changes that happen on a daily basis.

Moreover, although failures can sometimes teach you valuable lessons, you shouldn’t allow yourself to learn only from your defeats. Instead, try to educate yourself through:

Final Thoughts – It’s a Business

If you have experience running a business, then you know that individual, short-term wins and losses are not crucial to your long-term business success. In that respect, forex is the same.

If you want to work your way up the forex trading ladder, it is important to constantly remind yourself that there will be both good and bad days. Therefore, you should try to avoid getting emotionally attached to your gains and losses. Especially losses.

There is no overnight success in business, and forex is no different. There will be a lot of expenses, losses, risk, taxes, uncertainty, etc. But if you follow the strategies we listed, rest assured that you will find a place in the forex sun.

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5 Must-Have Traits of Professional Traders

Why do some traders achieve success while others flail? Well, professional traders exhibit a number of traits proven absolutely essential to excel in trading. While it’s true that the right trade can be life-changing, almost any experienced trader will tell you lucrative trades don’t come from luck but rather skill and strategy. That being said, here are five personality traits known to optimize trading performance.

Discipline

There’s a popular mantra in trading that goes, “Plan the trade, and trade the plan.” The market is full of temptation, and only the most disciplined traders are equipped to avoid falling under its spell. Traders can be tricked by their intuition, often resulting in simple but costly — mistakes. Disciplined traders stick to their plan, improving their shot at success by doing so. To be clear, discipline doesn’t mean you should use just one trading technique over and over again. It means knowing when, how, and where to employ the strategy you want to use, making sure to follow it accordingly.

Patience

Traders have to know how to wait for the right signal to enter the market. Those who grow impatient end up recklessly jumping into bad trades, leading to serious losses. If the opportunity to trade doesn’t present itself, it’s probably better to switch to another task, like brushing up on techniques or writing a trading journal entry.

Perseverance

The harsh truth about trading is that not every trade is going to go your way. What makes or breaks a trader is how they react to losses. Traders who learn from their mistakes are able to make better decisions down the road, while those who give up miss the chance to catch a great trade.

Flexibility

Have multiple strategies in your trading arsenal. Just because a certain strategy worked one day doesn’t mean it’s guaranteed to work again the next day. Given that trading heavily depends on market conditions, being able to adapt to market changes is a helpful, if not crucial, skill. Don’t be afraid to try something different, as long as you have tested it beforehand. But remember that while it is important to remain flexible it can be equally detrimental when taken to the extreme. Juggling strategies and trying something new every time you trade will deplete your account in no time.

Modesty

It’s been said before, and it will be said time and time again: greed is the trader’s worst enemy. When a trader has a series of successful trades, they can fall into the trap of overconfidence and begin to feel invincible. Instead of closing the trade and walking away with profits, they continue to trade, stopping only when the losses have become too much to bear. Staying modest helps traders enhance their strategies in the long term.

Learning technical analysis and studying the market can only take you so far. Taking time to hone these personality traits is just as important. Every so often, check back to this list of characteristics and identify the ones you need to work on. Whether you are an experienced trader or a novice, there is always room for improvement.

NOTE: This article is not an investment advice. Any references to historical price movements or levels is informational and based on external analysis and we do not warranty that any such movements or levels are likely to reoccur in the future.
In accordance with European Securities and Markets Authority’s (ESMA) requirements, binary and digital options trading is only available to clients categorized as professional clients.

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