This article looks at the essential personality traits of a forex news trader. It also looks at ways of developing discipline when trading on the forex market.
There are various factors which must be considered when entering the foreign exchange market. One is the technical analysis to be undertaken; another is the amount of terminology that must be learned. However, one factor which is potentially more important is that of personality characteristics. The foreign exchange market is a highly volatile and demanding environment which must be taken lightly. Only individuals with certain personality traits will be successful as forex traders. It is important you determine whether you are one of these individuals before trading.
In order to become an effective forex news trader, you must have a degree of discipline and commitment. This is important as foreign exchange trading requires a great deal of trading analysis to develop a trading plan. To have a suitable, sound and effective trading system, you must develop two or three trading strategies according to your trading style. These strategies must be tested several times to ensure they are effective when trading on the forex live market.
2. Personal responsibility
The most important personality trait of successful traders is the ability to take responsibility for their actions. This means that you will take responsibility for all losses when it is not the market or forex broker’s fault. When using this approach you will learn directly from your trading mistakes and can improve your trading strategy accordingly. Those who do not learn personal responsibility will experience emotional trading and further losses.
3. Mental state and emotional control
One of the greatest determinants of foreign exchange trading success is the trader’s mind set. Effective traders are those who are able to follow guidelines and maintain emotional control. These individuals will find themselves trading in a disciplined manner reducing the number of losses. However, the emotional trader will experience emotional trading. Emotional trading of any sort can lead to further detrimental losses and mental ill health.
In order to overcome emotional barriers, it is recommended that traders remove themselves from forex trading when feeling a surge of emotion. The forex market is a highly stressful one and by experiencing more anxiety one is susceptible to psychological difficulties. These breaks can vary between minutes to weeks dependent on the level of psychological distress.
4. Forex news top-down discipline
Trading on the foreign exchange market involves a degree of discipline and determination to be profitable. By attaining a top-down level of discipline, you will also acquire commitment and determination. There are various tasks you must complete if you are to be a disciplined trader.
- Establish trading goals. Successful trading begins with the identification of trading goals. If you are aware of a specific target, you will be more determined and disciplined in order to meet it. However, the target must be realistic and attainable.
- Establish action steps for the different goals. Action steps refer to the deconstruction of a trading process. They are the steps you will take to achieve your trading goals. By having this process laid out you will clarify the pathway to your realistic goals.