Trading is not a simple thing, anyone who has ever tried to be regularly profitable in Forex must know that. Even if it might not be obvious at first glance, a trader must have several important skills that are crucial for long-term success. In today's article, we will try to describe the most important ones.
Discipline
You cannot be successful without a disciplined approach. Discipline is important not only in trading, but also in other activities, in any job, or sports as long as you want to be successful. If a trader is not able to follow his rules and be disciplined enough, he will probably not be successful in the long run. You can have a sophisticated strategy, a mastered technical analysis, and a good trading plan, but if you can't follow them in real trading, then all the initial effort becomes quite useless. In short, a disciplined trader has a much better chance of achieving long-term returns than a trader without discipline.
Control of emotions
Taming the influence of emotions in trading is one of the biggest challenges to overcome for any trader. The reason why the majority of inexperienced traders fail to make it is that they frequently let their emotions take over their decisions. Everyone has experience with it, at the end of the day, we're all just humans. In any case, emotions, whether it is fear of loss or euphoria at a profitable trade, often lead to mistakes that sooner or later end up in account resetting. Letting go of emotions is a trading skill that every trader should strive to learn.
Consistency
There is no doubt that consistency is another important trading skill that every trader must master. That's why we've covered this topic several times recently and made a new consistency score indicator available to our traders within the Metrix app. While large swings in performance are not a problem for many traders, especially when they are able to make high profits, quick gains are no guarantee of long-term success. A consistent trader may not make big profits immediately, but in the long run, it is certainly better to make average returns on a regular basis.
Trading plan
A good plan is the basis for success in many activities, not just trading. It is true that sometimes traders succeed without planning their actions, but this is rather an exception. Before a trader starts trading seriously, he should know what he is getting into, identify his goals, find out what approach suits him, be able to identify his strengths and weaknesses and learn from them, and master the basics of technical analysis and risk management. Without a proper trading plan, a trader may find out many things when it is too late, or it may cost much more time to achieve long-term success.
Patience
Forex trading is often seen as an easy way to make a good deal of money very quickly and easily. However, this assumption is far from reality. We are always trying to explain to our traders that trading Forex is not a sprint, but a long-distance run, and therefore patience is one of the most important trading skills for successful traders. The sooner a trader realizes this, the easier it will be to avoid the big disappointment of not getting the results he had imagined from the beginning.
Hard work
No work, no cake. That's what our parents taught us from a young age, and it's still true today. Someone may get lucky and inherit or win money in the lottery, but we can't count on that. Without dedicating your time to trading Forex (of course, it depends on the options, strategy, etc.), you cannot expect to become a successful trader making regular profits. If you want knowledge you have to learn, if you want to be successful in your job (or any other activity) you have to work hard. So why shouldn't this apply to Forex trading as well?
Risk Management
One of the most important trading skills of them all. A trader who does not understand the importance of risk management and fails to set rules that he or she will then follow cannot succeed in forex. Making trades that are not predetermined in size and may or may not work out and not considering at whether the gains are greater than the losses can never work in the long run. FTMO Traders are well aware that without clear risk management rules, they would not be able to pass the Evaluation Process. And we are glad that our rules regarding maximum losses are a motivation for them to trade seriously.
Robust strategy
The term robust strategy may sound very sophisticated, but that doesn't mean that a college degree is required to develop a trading strategy. Most experienced traders will tell you that a strategy doesn't have to be complicated. A trader shouldn't complicate his or her life when creating one with a multitude of rules that can ultimately backfire. The bottom line is that the strategy should suit the trader himself and his trading style. This is why it is also important that the trader takes real care when setting up a strategy and does not try to copy strategies from other traders.
Backtesting
Another important success factor related to trading strategy is backtesting. Without testing your strategy before opening a live account or going through the Evaluation Process, you cannot count on long-term profits. Every strategy can work for a certain period of time and in certain market conditions, but only proper backtesting will verify long-term success. This then leads to the trader being able to rely on his strategy, being mentally at ease, and not prone to making reckless trades and unnecessary mistakes.
Trading Journal
Keeping a trading journal is one of the most underrated activities of a trader. It may seem at first glance that a trading journal is all about statistics, but this is not true. A good trading journal should also include the trader's thought processes that go through his mind when opening and closing trades. These emotions can then help you better understand the mistakes you make when executing trades and subsequently help you get rid of them.
Motivation and determination
Perhaps for every forex trader, the primary motivation is the money earned. This in itself is not a bad thing, but a series of losses can often lead to a trader losing motivation and, in the worst case, giving up trading for good. Thus, money should not be your main motivation, but rather a tool to help you achieve your main goals in life. The main motivation in trading should be what trading brings to you, what it has taught you, or how it changed your life for the better.
Something different may be important for every trader, but in general, the trading skills described today should be part of the basic equipment of every successful trader. They can work independently, but ideally, a successful trader can master them all. Do you belong to this group of traders?
