12 Things That Determine Success In Forex

Most traders spend time learning forex trading strategies and analytical skills, but they forget what is critical to success in being a consistent trader. Most traders forget to study the emotional aspect of trading.
It is true that technical and fundamental analysis skills are aspects of trading that are commonly discussed on financial news channels and trading blogs, and are easier to learn. However, it is emotional skill that determines how successful a trader is.
In fact, most retail forex traders fail at trading, and the reason is not far from a lack of mental discipline and emotional control.

Emotion

Emotions are strong feelings and attachments that you have as a human being. In normal life circumstances, your emotions are a normal way of expressing yourself, but in the world of forex trading, your emotions may do more harm than good.
In this article, we will see why need to control your emotions while trading and the hardest emotions that can hinder your success in trading.

The importance of mastering your emotions as a trader

Experienced traders know that their emotions don’t contribute anything to their trading success, but rather can cause them to make some costly mistakes. So they try everything they can to control their emotions and focus on what’s important, which is executing their strategy properly without fear or help.
You must have a trading strategy that clearly defines the criteria that must be met before you enter or exit a trade. With it, you don’t have to worry about the results before making a trade, and even after the trade, the results won’t bother you, because it has nothing to do with the next trade you are about to take.
Gain does not have to bring joy, nor does loss have to bring sorrow. You can enjoy your profits with family and friends at a later time, there is no point in consoling the feeling of accomplishment when you are in front of your trading screen. Doing so can cause you to make unnecessary mistakes that will affect your profitability.

For example, you may be so happy with the last win that you fail to identify the settings in the next trade, or you place another trade when your trading criteria have not been met. Similarly, after a losing/loss trade, you may worry so much about going wrong again that you miss the next trade setup, and if the setup ends up winning, you’ll start to regret why you never made the trade.
Since the profitability of any strategy depends on taking all the trading arrangements that occur in the market and executing them correctly, eliminating the rules on trading or not correctly will definitely reduce your chances of success. Worse than that, unchecked emotions can lead you to betray your risk management strategy — trading without stop losses — which is the perfect recipe for blowing up your trading account.

Thus, the ability to control your emotions is the first skill you must learn as a forex trader if you want to be successful.
Inability to control emotions that hinder your trading success.

Types of Emotions That Can Prevent Forex Traders’ Success

There are so many emotions that can prevent a forex trader from being successful, and each trader may be dominated by a different set of emotions. Generally, the most difficult emotions that prevent traders from being successful in forex trading are as follows:

1. Fear

Fear is a repressed emotion triggered by a feeling of impending danger, which may be real or imaginary. When a trader is overcome with fear, he tends to based on instinct to hold on to his position for no apparent reason.
In forex trading, fear can manifest in four different ways:
Fear of losing: This can lead the trader to use a tight stop loss or close the trade before even having time to play. Fear of being wrong: It can keep the trader from making the next trade. the position is ready to enter the market in a hurry so as not to miss the opportunity, and he ends up entering the trade when the market is about to reverse. Afraid to let profits turn into losses: take profits too early.
The first step to overcoming any of these fears is to be aware of them and know when you feel them. When you admit feelings of fear, try not to act on fear orders, and instead, follow what your trading plan dictates for the situation.

2. Greed

This excessive desire to make as much money as possible in the shortest possible time. In forex trading, greed manifests as a trading desire to make an unrealistic amount of profit. It keeps a trader in the trade too long, trying to hold the floating minus every last pip.
To overcome greed, you must understand that unrealized profits are profits only on paper. A trade can only be a winner if the profit has been booked. But that doesn’t mean you should take your profits too early (fear of letting profits turn into losses). Instead, you should have a solid trade management plan, i.e. have a profit target for each trade or a profit trailing strategy.

3. Hope

It is a feeling of hope (which in most cases is unrealistic) and a desire for certain things to happen. If fear is the most common emotion Among traders, hope is the deadliest emotion a trader can have when entering the market.
Hope can prevent a trader from closing an unsuccessful/losing trade. Expectations can keep a trader from using stop losses, increasing stop losses while already in a trade, or worse, practicing the martingale strategy — all of these can lead to heavy losses and even trading account break-ins.
If you want to be successful in your trading career, you should know this: in the forex market, hope is for the desperate. No one cares about what your expectations are. You have to trade what you see and not what you expect — have a strategy and follow it through to the end.

4. Too confident

Having confidence in your trading strategy and understanding to what extent your ability to execute it is good when trading, but overconfidence can be very bad for you. too trusting is the feeling of invincibility you get when you are on the winning/profit path.
The euphoria that comes after each win can lead you to start viewing trading as a risk-free adventure, which can lead to poor decision making in subsequent trades — for example, trading larger lot sizes. This often ends in heavy losses.
When you are on a win (profit), you have to know that you can be defeated (a loss), so you have to be more careful. Do not increase your lot size because you are on a winning streak. Instead, follow your trading plan and only increase according to your account balance.

5. Inability to enter the market

The inability to enter the market often indicates that the trader lacks confidence in his strategy and his ability to execute the strategy correctly. It could also be the result of a perfectionist attitude—an inability to analyze.
When a unable to press the buy/sell button for fear that the trade may not end in profit, then the trader will lose the trade, and if the trade moves in the projected direction, he may start chasing the trade and end up losing (a loss).
To avoid this situation, retest your strategy, and if it is profitable, continue to test it on a demo account until you are sure that it is profitable. Then follow closely.

6. Exit the trade prematurely

This happens when a trader has a fear of letting profits turn into losses.
A trader develops this attitude after seeing his profits missed on many occasions, and perhaps also because of greed.
But exiting the trade prematurely is not the solution. On the other hand, it limits a trader’s potential for success in the long term because the risk-reward ratio will conflict with it. The best solution is to have a profit target that is at least double or use trailing stops.

7. Indiscipline

Lack of discipline will often make a trader make careless mistakes when trading. Mistakes can range from placing the wrong lot size or entering the wrong order to forgetting to place a stop loss or missing an important element of the trading rules.
To improve your ability to be disciplined and strictly follow your trading plan, you should keep your trading plan in mind when trading.

8. Lack of commitment

When a trader is not fully committed to his trade, he is less likely to take his trade seriously. He traded only when he felt trading would be fun, but trading was a serious business and not a hobby.

9. Lack of focus

If you don’t fully focus on what’s happening in the market when you trade, your chances of making a big mistake will be high. Trading is a mental task because the brain processes it information at the same time, so there is no room for distraction.
To improve your ability to focus on the market, your trading room should be quiet. It should only have the things you need to trade and nothing else.

10. Impatience

Many traders are naturally impatient in everything they do, and so are traders. But patience is a necessary virtue for any aspiring trader to be successful.
Impatient traders are more likely to jump (enter a trade outside of the trading plan), move the stop loss to breakeven too early and exit, or close the trade prematurely.
The best way to prevent this situation is to strictly follow your trading plan, ensuring that you act only if the trading plan/action criteria are met.

11. Anxiety

This can happen because you are not sure which trades to take and how often to take them and this follows a prolonged period of losing streaks. Anxiety is a state of panic or fear that reduces your ability to think clearly and make good trading decisions.
Most of the time, anxiety breeds erratic trades without a strategy, and the result will be more losses and more panic. To control anxiety during trading, you can try some relaxation techniques, such as deep breathing, yoga, mindfulness exercises, and emotional freedom (EFT) techniques, or you close Metatrader4/5.

12. Regret

Regret is the feeling of disappointment or sadness you get when something doesn’t turn out the way you wanted it to. For example, when you have a big loss and the market immediately reverses or when you refuse to trade and the market turns out to be working as expected.
The implication of this emotion is always thinking about the past and not looking for opportunities in the future. Regret can You lose more trades because you won’t see them. But most importantly, it can make you shift your stop loss at a later time or catch up on a missed trade.

To be a successful trader, you must learn how to always put the past in the past. Learn from your mistakes and move on.

Last words

While your emotions are normal feelings that reveal what’s going on inside you, when left unchecked during trading, they can be your worst enemy. It is best that you understand it and try to be aware of it when trading. Enter the market When the market is ready to give you a profit, of course with full compliance with your trading plan.