By far, forex is the largest trading market in the world. And over the years, more people are entering the market and are starting their forex journey. Since you can trade anytime and anywhere on your smartphone or laptop, the forex market has become more appealing to people.
There are many reasons forex has come this far today. One of which is many people’s success stories sharing. The thing is, there are two sides to the coin for this reason. The first one is it attracted and influenced many people to start forex trading. On the other hand, it also sets unrealistic expectations about trading.
Because many people are trading well in forex, many also started thinking it’s easy to get rich in the market. Many of us fail to understand that expert traders have habits that make them great at what they do. There’s more behind the scenes than the success stories we hear. If you’re curious how they do it, here are seven habits you can build to become a better and wiser forex trader.
1 – Build the habit of having an eagerness to learn
Many think you only need “luck” to trade better in forex. Most don’t realise that consistently learning about the market makes a trader wiser. If you consult a professional trader, this is likely the first advice they’ll give you.
You might wonder, “why is it necessary to build a habit of learning in forex trading?” Because forex is the biggest market in the world, changes and news could happen without warning. You need to remember that the market has a high volatility rate. That means currency prices could fluctuate within a blink of an eye. That’s why being eager to learn about the market will help you stay on top of the game.
2 – Be flexible and open to changes
Once you build the habit of constantly learning and educating yourself about forex, you’ll realise how critical it is to be flexible in the market. I mentioned in my first point that the forex market is volatile. That means many instances will happen when things won’t go as you planned.
There could come a time when you’ll want to quit the market because of its unpredictability. You might even come to a point when your plan is not working, no matter how much you try to improve your strategies. When that happens, it’s time to remind yourself of this second habit. Learning to embrace changes will help you build resilience and better monitor the market for future purposes.
3 – Learn to control and separate your emotions, a.k.a, think logically under pressure
As you start your trading journey, you’ll notice how change is inevitable in the market. At any time of the day, currency rates could fluctuate against your odds. And no matter how much you try to practise the habit of being open to changes, there could come a time when your emotions could overwhelm you.
So as you practise the habit of being flexible, learn to control and separate your emotions from your trading decisions as much as possible. When the market goes against your plans, your emotions could sway you into feeling the pressure of spending more money or making poor decisions. That’s why you must build the habit of thinking logically under pressure.
4 – Assess, refine, and review your trading plan along with the changes in the market
Many forex broker websites say that a good trader always has a trading plan. If you’re trading in forex without plans, this is your sign to make one. A plan will help you get ahead and keep a great head start on your trading goals.
As you make your way in trading, there could come moments when you’ll need to refine your plan for the better. Of course, the primary purpose of your trading plan is to help you stick to your strategies to help you make rational decisions when trading. But as you learn more and witness the changes in the market, you’ll need to assess, refine, and review whether your current plan is still in line with the market’s condition.
5 – Setting a monthly budget for trading
One reason many correlate forex trading with gambling is that many have had an experience of spending more money than they can. Usually, this happens when people don’t have enough knowledge about the market and decide to trade without plans.
But even though you’re knowledgeable and familiar with the market already, there are times when you could feel the temptation to spend more. When changes in the market suddenly happen, you could feel the urge to buy currency pairs at rates you know are not rational. That’s why regardless of the situation, build the habit of setting a monthly budget that you’re willing to lose only.
6 – Learn from your losses and analyse how you can trade better after
Regardless of what other people say, there’s no perfect trading journey. As you buy, trade, and sell your currency pairs, you’ll encounter losses and poor decision-making as you move forward. The good news is, that’s okay.
Sadly, many quit immediately after encountering a massive loss or making a poor trading decision. Instead of learning from mistakes and using their experience to gain better knowledge and strategies in the market, many quit empty-handed. To avoid heading down a similar path, make it a habit to track and learn from your losses. That way, you can analyse how to use those mistakes in your next move.
7 – Knowing when to seek help and advice from professionals is a wise habit to have
Lastly, build the habit of knowing when to seek help and advice. Every professional was once a student with a mentor who helped them become the professional they are today. And asking for help is not a sign of weakness. Instead, it’s a sign that you’re brave enough to recognise your need to improve and move forward.
When you feel like you’re in a rut, and no matter how you learn and use strategies to trade better, you still have losses, maybe it’s time to ask for advice from professional traders. Asking for their suggestions will help you see your position in the market better. Maybe you only need a fresh perspective on how you look at the market’s movement to know when to buy, sell, or trade best.
Building positive habits will lead you to a better and more desirable forex journey.
Whether you’ve been trading for a long time already or are new to the market, it’s never too late to build positive habits. You can start with these seven habits, and soon enough, you’ll have a strategy that works for you and helps you trade better. At the end of the day, it’s all about the small choices you make to become better at trading.
About the author:
Bianca Banda is a writer for FP Markets, one of the best-regulated Global forex brokers with over 40 global industry awards—and counting, making them the trusted trading broker by many.