Three Qualities that Every Successful Forex Trader Must Possess

by Andrew McGuinness     Dec 15, 2017

As the Forex market continues to expand and attract new traders with the prospect of "risk-free" investments and "easy money," the market has been flooded with traders looking to get rich quick instead of focusing on growing their money over time. While there's no doubt that there's plenty of money available for the taking on the foreign exchange market, a successful Forex trader first needs to develop these three qualities in order to see more successful and fruitful trades.

Discipline. By far, the most important quality that a Forex trader must possess is discipline. One of the biggest rookie mistakes that new Forex traders make is trading purely based on their own instincts and emotions. For example, when Brexit occurred and the value of the British pound was speculated to crash, the actual decrease was much lower than expected because so many beginner investors chose to dive in immediately without looking or thinking about the consequences of the market fully. This type of impulsive and emotion-driven trading is guaranteed to cause investors to lose money; though it might be tempting when watching currency match pairs rise and fall to dive straight in and begin investing immediately, the smartest Forex investors take the time to do their research and track the market before throwing themselves headfirst into their first trade.

Accountability. What do governments, banks, investment funds, and individual traders have in common in the Forex Exchange Market? The ones who make the most money (or avoid losing their investments) are the ones who trade with a plan and remain accountable for their actions. No matter if it's a strict set of predetermined market movements or the recommendation of a group of investment experts, every smart Forex investor has rules and guidelines for how and when to exchange and trade currencies. What holds these investors to their trading plan and stops them from diving into a trade on blind impulse is accountability, which can present a problem for individual traders; while governments have citizens that can vote their leaders out of office should they fail and investment funds have stockholders to please, individual traders have only themselves to remain accountable to. If you're going to be a smart Forex Trader, you need to develop a set of rules that regulates how and when you will decide on the best trades to make- and hold yourself internally accountable for your failure to follow the rules should you slip up.

Superior money management. Smart Foreign Exchange investment doesn't end when the trader is finished exchanging currencies for the day- the best traders are able to carefully manage their money and save so they are able to jump on a hot currency when the time is right. If you're the type of person who is impulsive with his or her money, doesn't have a household budget, or has a tendency to spend their savings on items with depreciating values (like new cars or luxury clothing) instead of investments, you should get your money management skills in order before you think about entering the Forex market. This will give you greater control over your outstanding balances and allow you to take advantage of quick changes in the Forex arena- which are relatively rare, but allow for the biggest risk-reward paradigms in the currency-exchange market.

While the prospect of "easy money" is one that attracts many Forex Traders, the ones who stick around and make it big possess the above three qualities to ensure that they are able to sustain their growth and make the right market moves. Before you begin your investment, reassess your personality and decide if you possess the right qualities to help you succeed on the foreign markets- and if you don't, formulate a plan of action to help yourself grow.

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