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3 Things You Didn’t Know About Successful Forex Traders in 2023

mohamed_nour433

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1) They Don’t “Lose”
Man making trading losses
Before the emails start pouring in, let me explain…

No Forex trader is without losses. But there’s a distinct difference between how the beginning trader loses and how the best Forex traders lose.

What’s the difference?

Mindset.

Most starting out in the Forex market view a loss as a bad thing. It’s a way of signaling that they did something wrong.

And doing something wrong is bad. At least that’s what we’ve come to believe over the course of our lives.

However, the successful trader doesn’t view a loss as a “bad” thing.

It’s also not something the market did to you. The Forex market doesn’t know where you entered or where your stop-loss order is located.

Unlike you, the market is always neutral. So when you lose, it’s a matter of reflecting on what you could have done better.

Don’t get me wrong, nobody likes to see a trade go against them. I don’t care if you’ve been trading for one month or ten years, it’s always more enjoyable to make money than to lose it.

That being said, just because a trade doesn’t go your way doesn’t mean you should take it personally. Thinking this way will only dig you a deeper hole.

The successful Forex trader has the mindset that a loss is simply feedback.

It’s the market’s way of disproving a trade setup. That’s the only thing the Forex market has the ability to do because it doesn’t know anything about you or where you entered the market, nor does it care.

Losses can be a powerful way to learn. Just remember that even a trade that ends up as a loss can be the right decision.

How is that possible, you ask?

If you’ve defined your edge, and the setup met all of your criteria to enter the market, then you did all you can do. The rest is up to the market, and some days the market just doesn’t play along.

Next time you have a loss, take it as constructive feedback. Analyze the situation to see how you can improve the next time. Keep in mind, though, that even an A+ setup doesn’t always work out.

I’ve had many trade setups that didn’t work out that I would gladly take every single week.

That’s because I know that my edge will win over time and put money in my account. In fact, a good exercise after a losing trade is to ask yourself, “would I take this same setup again next week if it presented itself?”

You should always be able to answer this question with a resounding “yes”.

If you answer with a “no”, you need to take a step back, determine where things went wrong and correct it for the next trade.

Start seeing trading losses as business investments rather than upsetting events. Each loss is an investment in your trading business and ultimately your trading education.

The money you put at risk on any given trade, whether it’s $5 or $500, is an investment with the best Forex coach in the world—the market. Keep an open mind and it’ll show you everything you need to know.

2) Successful Traders Use Price Action
Price action trading with candlestick chart
Every successful Forex trader I’ve met uses price action in some way, shape or form.

This doesn’t mean they’re using price action in the same way I use it, but they are using some form of price action as part of their trading strategy.

Whether a trader is using raw price action or simply using it to identify key levels in the market, price action plays a major role in any strategy.

That’s because it serves as a representation of the psychology within a market. It gives us some insight into the minds of other traders.

Having some idea of where buy and sell orders are located in the market is critical to becoming the best Forex trader you can be. It can strengthen any trading strategy by providing areas to watch for potential entries as well as profit targets.

Trading Forex without using some form of price action is like trying to drive a car with one eye closed. It can be done, but I wouldn’t recommend it.

So even if you are developing a strategy based on indicators, it would behoove you to learn about price action. If nothing else, it will provide a solid foundation from which you can design and develop other strategies.

3) They Have a Defined Trading Edge
Man getting a competitive advantage
I see a lot of talk on the internet about the need for a trader to develop an edge and define it. And, if I’m honest, most of what I’ve read out there is pretty alarming.

It’s little wonder why so many traders struggle to understand what an edge is and how they can develop one of their own.

So what exactly is a trading edge and why is it important?

An edge is everything about the way you trade that can help put the odds in your favor.

It’s a combination of the time frame you trade, the price action strategies you use, the key levels you’ve identified, your risk to reward ratio, and other factors. It even includes your pre- and post-trading routine.

How do you handle losses? What do you do when you win? These are all things that make up your trading edge.

Think about it like this…

What allowed Brazil to win so many World Cups in soccer (football to most of the world)?

Was it the passing? Maybe the shooting?

It was everything. Brazil had the “total package”, as they say. It was their passing, shooting, dribbling, movement of the ball, set plays and everything in between that gave them an edge over other teams.

Your trading is no different.

Although there are dozens of factors that make up your edge, you don’t have to master all of them at once. Nor do you have to master all of them to start putting the odds in your favor.

It’s better to master one set of factors and then slowly expand to others to further define your edge. Not only is this a natural progression, it’s the preferred way to learn.

Have you heard the saying, “jack of all trades, master of none”?

If you try to master too many of these factors at once, you’re setting yourself up to become good (not great) at a lot of things. That isn’t what we want.

Instead, master one thing at a time. For example, become an expert at identifying key levels. Then expand your skill set by learning how to determine trend strength. After that, set your focus on learning about pin bars.

Those three things are all you need to witness a rise in your profit curve. Continue to expand your skill set in this manner and soon you will have a trading edge of your own.

The key is to only tackle one or two factors (at most) at a time. Using a slow and steady approach will get you on the road to becoming a successful Forex trader in no time.
 

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