The most important things you need to do in order to be a good Forex trader
In this weekly video:
00:25 – An overview of being a good trader
01:11 – The right attitude and mindset
02:15 – Work out what works for you
03:03 – Patience is key to success
03:45 – Understanding position sizing and reward:risk
04:38 – Be slow, steady and consistent
05:30 – Don’t listen to most of the information online
06:14 – Keep things basic
07:40 – Contact me if you’d like to take your trading further
I'm going to discuss the most important aspects that makes a successful Forex trader. Really important information, listen up, here we go.
Hey traders, Andrew Mitchem here. The owner of the Forex Trading Coach with video and podcast number 300.
An overview of being a good trader
I thought for the 300th episode, we'd take basically an overview of the most important things that in my opinion you need to have developed in order to become a good trader, to become a successful trader. In no particular order, but really when you think about it, if you're going to be a Forex trader, you've got to enjoy it. There's no point in doing something if you don't enjoy it. Don't just think oh, I've seen this thing online and it's easy money. I can make passive income, I can give up my job because I hate my job. Whatever it is, a lot of people have some very weird and quirky reasons for getting into trading, but the most important thing I think at the very beginning is you have to enjoy it. You've got to have a bit of a passion to want to do it, to get a bit of a buzz out of doing it. Those types of things, so that's really important up front.
The right attitude and mindset
Then you've got to have the right mindset and the right attitude towards it. Now a lot of people come into trading and they blame people, they blame the market, they blame the broker, they blame their coach, they blame everybody but themselves. You can't do that. You can't sort of start throwing hands up in the air and throwing your toys out of the cot if after the first month of trading it's not working for you because the reality is if you have that kind of mental approach, that thought process, then the likelihood is it's not going to work for you, doesn't matter how long you do it. You've got to have that sort of understanding that you're in this as an investment, you're going to get yourself educated, you're going to take your time, do it slowly, and if you do it that way, then things … You've got a far better chance of making it work for you. That whole mental aspect and approach is really, really important. You can't be like too fiery and just throw everything, blame everybody if things don't go right. It's your problem. Harsh but true.
Next thing is you've got to work at what works for you. Now it might seem a bit obvious to say that but it's got to be …
Work out what works for you
You have to develop a way of trading that actually suits you, suits your personality, suits other commitments that you have, suits how much or how little you want to trade. Those types of things. Do you want to be a scalper? Well, no harm in being a scalper. I don't personally do it because it doesn't suit me but you can still trade my strategy on five minute charts if you really wanted to, but you've got to work at what works for you in terms of the type of trader that you are. You've got to understand that if you're looking for certain patents, you've got to be consistent with them. If you're looking for strength and weakness, you've got to be consistent with that trading approach. It's really important to get all of that together.
Patience is a big one. We've talked about that recently on these videos and podcasts. Patience is a massive, massive key to being successful. I'll give you a great example.
Patience is key to success Patience is key to success
A client of mine posted on our forum site just this morning an amazing trade on the 12 hour charts. They saw the trade, it was the first one they've taken for the week on that pair, and they waited for it, they saw the set up, they took the set up, they made a 3:1 reward:risk out of that trade, but they waited towards the end of the week to get to that stage because earlier in the week on that pair, on that timeframe, nothing else was showing. Patience is a big key. There's many examples about patience and how being patient helps you.
Understanding position sizing and reward:risk
Understanding position sizing, understanding reward:risk, those types of things very, very important understanding that really in my opinion you shouldn't look at making pips. Forget pips, they don't really matter. You can't go down to the shop and buy something in pips. You've got to understand that where you put your stop losses, where you put your profit targets. Try to get reward:risk that's in your favour, maybe a 2:1, a 3:1, whatever it might be depending on your approach and strategy. You've got to understand how to use a certain level of support resistance levels, pivot points, round numbers to help you with your stop loss. Let's say protecting your stop loss. Don't just say, “Hey, I'm going to put a 20 pip stop loss.” Well, what does 20 pips mean and 20 pips on something like the Pound/New Zealand is very, very different to 20 pips on the Euro or Swiss Franc, so understanding different pairs, how they move, that type of thing, is very, very important also.
Be slow, steady and consistent
Be slow, steady, and consistent. Well, I think that's a really important key. As I mentioned earlier, if you're the sort of person that flies off the handle because a couple trades go wrong and you start blaming everybody else. It's probably not going to work for you. You've got to be slow, you've got to … I've had people in the past go, “Hey Andrew, I took your course three weeks ago and it's not working for me. My trades aren't working.” It's like, “Well, three weeks, come on! Give it some chance.” At three weeks you should be still learning strategy, following what the person is doing, attending webinars, those type of things. Don't expect miracles basically within a minute of just trading a new system. It's not going to happen. Slow, steady gains, consistency, understand a system is far more important and then long term, you're away. Once you understand how it works, you're away but take your time up front. Really important to do that.
Don’t listen to most of the information online
Don't listen to most of the other info out there. Now I think that's another big key. Trying to avoid most of those sort of forum sites or sort of buying those $97 robots, those type of things. Most people, even family members, family and friends, a lot of people will tell you that in gambling you don't know what you're doing and you lose your money, you lose your house. Ignore those people. If trading is something you want to do, get to understand how it works. Get yourself educated. Get support on your side and basically ignore the masses out there that will tell you it's no good. A lot of those people either aren't educated themselves or they're people who have tried it and done something stupid to blowing their accounts, etc.
Moving on from there, don't complicate it. Trading shouldn't need to be complicated. You don't need to make it complicated.
Keep things basic
It's not that complicated once you have a system and a structure that you understand, so really important to come back to those basics and get all of that right and it comes back to the very first point of enjoying it. It's great too if you're able to make money from trading and absolutely love it, but you've got to enjoy it, you've got to get a bit of a buzz from it and really look forward to doing it. Most people with a normal job they absolutely love Fridays and they hate Mondays.
For me, it's the opposite. I absolutely love it when the market opens because it means that I can get back doing the thing I love again, trading again. Weekends, yeah sure, everybody loves weekends, but I can't trade. If that's you, then trading is for you. If you love the Monday mornings and the market opens, then that tells you you've got the trading bug, which is great. But don't forget, of course, you can still use the weekends for doing your research and looking at like your weekly charts [inaudible 00:07:05] your upcoming daily charts for the beginning of the new week, so you can still do research and back testing and analysing your results and things like that, but you've got to have the enjoyment of trading.
I hope that helps. Really proud to have got to video and podcast number 300. Thanks for watching, thanks for listening, thanks for supporting me, and really pleased with all the comments and feedback that I get week after week, and so pleased that all my information is out there helping you.
Contact me if you’d like to take your trading further
If you do want help, you know where to find me. We've been at the Forex Trading Coach for nearly ten years, a huge achievement. Helped thousands and thousands of Forex traders just like yourself throughout the world. If you'd like to join us then we'll be glad to have you and to help you becoming successful. This is Andrew Mitchem from the Forex Trading Coach. I'll see you this time next week.