Becoming a Better Trader

Every forex trader's dream is to be a profitable trader for a long time. However, many people lose most of their fortune in this endless stream of wealth. Why is this? Struggling traders focus on money rather than gradual growth.

The only formula for growth is consistency. The more consistent you are, the better you will be.

Consistency in trading comes from selecting a strategy that suits you and practicing it.

Many traders don't seem to understand that trading is a long-term game. Trying to rush the process will only result in harm both to your finances and your psychological well-being.

Growing as a trader also involves being self-conscious; the ability to identify and eliminate behaviors that can sabotage the progress you want to have. Some of these behaviors are but are not limited to laziness, poor mentality, indecision, etc.

As the well-known quote says, 'failing to plan is planning to fail'. All successful traders have trading plans that help keep them in line. The trading plan entails rules to follow such as maximum allowed losses per day, drawdown per trade, what to do when you're uncertain about a particular trade, and many more. These rules if followed will improve the way you trade and will make your equity curve rise.

These are some common mistakes traders make that impede their growth.

1. Gambling: Are you over-leveraging because you think one trade is a sure winner? If yes, then you are gambling. No trade is 100% certain, a trader's job is to determine what has the higher probability of happening and capitalizing on it under his said rules.
2. Not using stop-loss: A stop-loss is an order that automatically takes you out of your trade when it is going against you. Trading without a stop-loss means you have handed your whole account to the market and this does not end well.
3. Revenge trading: Many traders usually get mad after losing trades. This emotional feeling often leads to them opening up larger trade positions to win back the already lost funds. This has to be one of the worst things that a trader can do because the losses only become bigger and bigger.
4. No risk management: This ensures that losses are in a similar range and is very effective for traders with high risk to reward trades. Traders should risk less than 1% on any single trade and also set a daily loss percentage per day.
5. Trying to guess news outcome: This is similar to gambling. News effects usually have a rapid up and down movement before stability and it's because of the volatility that comes with such news. Guessing market direction before a news release can cause huge losses in your trading account.

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