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Characteristics of a successful trader

Characteristics of a successful trader

By: SMITH THOMPSON

It is believed that traders who are successful do have a set of characteristics which are unique, making them to be apart from the crowd. If you can be able to borrow some of the behaviors and utilize them together with other knowledge, then it might just increase your chances of making a trade that is successful. To make it easier, the following are some of the characteristics that you will find with the top 8 forex brokers in South Africa which you need to follow:

Stick to your plan

There is no successful player who will last quite long without a game plan that is well conceived for each of the trade. Currency traders who are successful have a plan which is specific in attacking for each position, that include position size, the entry point, take profit exit, and stop-loss exit.

The successful traders stay quite flexible when it comes to their take profit, at times settling for what is less if they judge that it is what they can take from the market at that particular time, and at times, extending their targets of profits if the development in the market are shifting in their favor. But they don’t seem to move their stop-loss oders from the setting in the original unless it happens to be in their favor of position of profits which are lock in.

Anticipate different outcomes

Trading might be similar to chess where the best players are thinking of the various moves ahead of what their opponents are playing. Successful traders in forex look ahead in the future events, considering how much the market has not or has priced in outcome that is expected, and then construct trading strategies around the possible outcomes. While the outcome of the market is trying in figuring out what it has to make of the events, ensuring to check charts and redraw trend lines, the trader who is forward looking has a game plan which is already available and is read to trade using it.

Stay very flexible

Currency traders who are successful tend to resist being attached emotionally to positions. They recognize that it is not all about being wrong or right but about minimizing losses and making profits. They tend to adapt to incoming information and news and quickly having to abandon a position that is open if the events run counter to it instead of having to wait for the action of price to take them out of the trade. Similarly, they are alert to opportunities which are fresh which might develop in the market and are prepared to react easily. To be prepared, they have to keep sufficient margins which are available for the extra positions.

Be prepared

Currency traders who are successful are always prepared, as much as possible at least in a market which is open 24 hours a day, five days in a week and it is subject to random events from half part of the world. To be able to say on top of the game, successful traders of currency are normally prepared for the following:

  • Data release of upcoming economy in the next one week or two: know the content of the prior report indicate and what is expected in the report which is upcoming.
  • Speaker who is scheduled: find out the person that is going to speak; the finance officials or the central bankers, what they said in the past and what they might be saying this time round.
  • The interest rate of the central bank setting announcement and meeting times; know when they are likely to be scheduled and what the market decision they are expecting.
  • Financial leaders important gathering like the G20 meetings or the Eurozone get together monthly meetings of the finance ministers; you have to get the sense if the currencies are on the agenda and what is the expected action.
  • Liquidity conditions; there is a need to stay aware of the various time periods like end month, holidays and market closing, and the tie of the day like when the European close, daily fixing, option expirations, when the market liquid might be affected.
  • Events which are unexpected: utilize the rate alerts to ensure that you remain on top of the movements of prices outside the ranges which are expected. Follow up with the alerts in checking for news which are significant and to assess the potential trading opportunities.

Keep up to date with the various technical

Even though you might not be pursuing a technical based strategy for trading, successful traders in currencies still are aware of the essential of the technical levels in the pairs of the currency which they are trading. For example, they know the retracement levels of Fibonacci which are important, where a variety of moving average happen to be, important long and short term trend lines, and major lows and highs in the recent times.

Identify the environments of the market

Successful currency traders are able to assess whether the market is able to trend or likely to remain in ranges which are confined. If they think the market is currently trending, they might aim at going with the flow quite often than against the flow. Whenever the short term trend happens to be higher, they happen to be looking for the levels in order to get long at, and the other way round when the direction goes down. Also, they are away that the trends pause and  frequently correct. So they also attempt to take profits actively and minimize the loss at technical points that are key while the larger points begin to unfold.

If the environment is one that favors range trading, currency traders who are successful are able to switch their gears and become contrarians, having to sell near the top of the range when everyone seems to be buying, or to buy near the range bottom when everyone else seems to be selling. Just as important, when they happen to be in the range-trading mode, they define a point which is ultimate when the range gets broken. If that point gets hit, they adapt as per the situation without having any remorse, possibly even having to reverse.

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