The success of the trader depends on whether he is ready to become successful or not. You should always remember that there is no instant way to succeed in this world. There is no shortcut for freedom. Everything requires struggle and sacrifice; one should become absorbed in what he's doing both physically and mentally. Being a successful trader is not an easy thing, but you can achieve it. Making profit is the way to trader's success, and strong determination is the key.
There are some important things on the Forex market which every trader should get to know. Let's take a more detailed look on them.
1. Don't panic and don't open orders without calculation!
The primary goal of any trader is making a profit and increasing wealth by using the price movements. Such famous traders as George Soros, Goldman Sachs, JP Morgan, and his allies are those who make the price to move on the Forex market. Let's call them the Market Makers (MM). The MM has a significant capital that can drive the Forex market; they can even shake the economic stability of some countries if they wish to do that. The retail trader with limited capital capabilities is like small fish versus sharks.
During times of panic, it's important to be aware that your trades may be automatically closed through a stop loss order or, in even more extreme cases, through a stop out order.
When the MM open short positions, the price starts to move up smoothly and gradually and after a while, a sharp up movement takes place which then begins to weaken slowly. This process is known as "out of steam." It means that the MM stop buying because they think the price is too high. This causes a side-way movement of the price, and the flat takes place on the market. From that moment the MM will wait for important economic news which will be a momentum for them to improve their position (to continue opening new buy orders, to begin sell orders or not to do anything).
When the news is released, the market will start moving fast and chaotic; the prices will go up and down quickly. This is a "shake out" caused by the MM. Often, the retail trader is trapped by this situation and starts to open transactions carelessly. He is afraid to "miss his train." Because of the panic, the orders of the trader may be closed by stop loss or even worse by stopping out.
2. It is impossible to know anything for sure on Forex
There are no methods of financial analysis which can predict the price movements with 100% accuracy. It happens because the Forex market is moved by human psychology. The desire to get profit, fear of loss, panic, and other feelings or emotions influence the Forex market movement. The proverb says: "Depth of sea can be seen, but who knows the hearts of people?". The same is with the Forex market.
Nevertheless, Forex has a memory. The price movements repeat from time to time, and it helps traders to understand the Forex market and to create some tools for trading analysis. Thus such popular methods and instruments of technical analysis as Elliott Wave analysis, Gartley pattern analysis, candlestick pattern analysis, analysis of WD Gann, various expert advisors and indicators were founded.
3. Have a humility and think over before making decisions
As it has been already mentioned, the market is very unpredictable. This means that the trading process requires some humility. A trader should respect the "will" of the market. He should have humility to manage the situation when the market is moving against the analysis and trading strategy.
A trader with his strategy on the Forex market is like an adventurer who stays alone with GPS device in the forest. But at a specific moment, his GPS turns off, and he goes in the wrong direction. When the adventurer gets lost, he tries to remember his way, realizes his mistakes and makes decisions which help him to reach the goal. The same is while trading if you have humility to stop for a while and to think over all the mistakes which were made you will reach your trading goals.
4. Be patient while trading
Humility helps to keep calm in any situation. Professional traders are those who have the patience to wait until the conditions on the Forex market correspond to their trading strategy, and they have an opportunity to make a profit. Patience is required from the moment the order is opened and till it is closed. But it is especially important in the middle of a transaction when trader needs to watch the price movement which can go any direction and stay calm in order not to close the order too early or too late.
Nial Fuller, a professional trader, said that the most appropriate animal to describe himself as a professional trader is an ALLIGATOR. Crocodiles exist in this world for millions of years. Alligator does not spend their time on small prey. It saves energy for the big prey, staying patient and waiting for a long time. But as soon as the prey is in the range lunge, alligator does not hesitate to grab it. Of course, alligator's hunting is not always successful. But this animal has the patience to continue doing its job and finally reach the desired goal.
Discipline helps trader to stay cold-minded and to open and close each order without hesitation and fear.
5. Discipline yourself and have a trading plan which should not be broken
One of the ways to manage uncertainty on the Forex market is to discipline yourself. When it is impossible to predict the market movement professional traders protect their accounts with self-discipline. They create the trading plan which they don't break no matter what the situation on the market is.
Discipline helps the trader to stay cold-minded and to open and close each order without hesitation and fear. He believes in the profitability of his trading strategy. And even when the market moves against it, the trader remains calm and respects the will of the market. This situation is not a surprise for the trader because he has already thought over the worst scenario which can happen while trading.
6. Remember that Forex market is neutral
The Forex market is neutral. Only traders give special meaning to every movement of the price. They interpret the conditions which occur on the Forex market due to the experience and knowledge they've got. But in fact, the real Forex market is neutral!
For a newbie Forex charts are nothing more than colored beams moving up and down. When a trader gets some experience, these movements become signals with special meaning which he can use in his trading strategy. If a trader forgets about the uncertainty of such signals and become confident about their meaning, he may become trapped with his confidence in case market moves against his plans.
But understanding and accepting the fact that the Forex market is neutral the pro trader will become free from the blockades of his confidence. He will act according to his strategies and plans, but he will also remember about the possibility of undesirable results of his trading.