Trading the FX rates market is not a walk in the park, as 95% of traders end up finding out after a few days of trading. So before you venture into this market you must be sure you are ready for it. Here are questions you must ask yourself.
Do you have the ability to lose like a professional FX rates trader?
The home truth about FX rates trading is that you will have losing trades. If you are not ready to accept this fact, then it is better for you avoid funding that live account. If you understand the fact that there will be losing trades, your next focus should be on finding out how you can deal with the inevitable losses when they arise. The key to losing like a professional is to make sure you are not risking more than you should on any trade, while avoiding overtrading as much as you can.
Can you withstand temptation?
Patience when faced with a heavy temptation is one of the things that successful forex trading requires. Forex trading is like have an automatic rifle loaded and having your finger on the trigger, but you are only allowed 5 shots a whole month. Many people will fail at this. So if you are not yet ready to wait patiently until a trade setup arises, instead of jumping into the market indiscriminately, you are not yet ready to succeed in trading. In the example we gave, you are going to be conserving bullets if you do not shoot indiscriminately, but with forex rates trading, you will be conserving your trading capital if you do not go around taking trades without really good reason..
A truly patient trader is one that has the patience to wait for the highest probability setups that match the criteria they have already listed in their forex trading plan. Trading anything outside of this means it is only a matter of time before you get run aground.
Are you able to keep your emotions in check?
This question focuses on whether you are going to remain calm and trade like a professional, or whether you are going to give in to emotional temptation, like a teenager. It may sound far-fetched but the truth is that many traders do not have any emotional control when it comes to trading. They can be likened to drunks in a casino that do not leave until their money runs out, and they get thrown out by security.
One thing you must keep in mind about forex rates trading is that it can be defined as the real test of an individual’s ability to stay patient and in control of their actions even when their money is at risk of being lost. Now, two ways you can ensure you keep your emotions in check is to avoid risking too much on any particular trade, and to make sure you are selective with your trades.
If you are able to answer the above questions honestly, you will be able to know if you can succeed fx rates trading.