There are many forex traders who make huge profits yet many don’t have a college education and many don’t spent all day trading – what separates them from the rest is their mindset. Trading is a combination of method and mindset and this is what this article is all about. The key to trading success is to have confidence in what you are doing and in your method; this leads to discipline and currency trading success.
This brings into focus the concept of a trader's mindset. Mindset is the first component of any trading model when one prepares to become a successful trader. It all starts with one’s mindset. Mindset can be defined as thought patterns. How we respond to events and stimuli that we encounter each day is directly in accordance with our individual mindset. Therefore, if we can set up the appropriate mindset or thought patterns suitable for the activity at which we wish to excel then we have a chance of producing excellence.
When you have achieved the trader's mindset or the optimal state of mind for placing trades you should experience a relaxed calm state. You observe what is happening in the markets without any particular bias as to which direction they should be moving in. You accept both wins and losses with aplomb. You don't blame or feel victimized by the market for losses and instead of getting angry if things don't go your way you take responsibility for your decisions, learn from them and move on.
The most important thing that successful currency traders possess is the ability to separate their emotions from their trading. Any trader can learn to trade, but not many traders get the correct mindset to succeed and this has been the case throughout trading history. The reason for this is that most traders simply cannot accept responsibility for their actions. If you want to become a successful forex trader you have to accept you are totally responsible for what you do and no one else.
Mystical though it may seem the trader's mindset arises from practical steps taken consistently over time. Cultivating the mindset starts with setting realistic expectations and consistently acting on them. You only trade with money you can afford to lose. You should also have a trading plan mapped out about how you will tackle the weeks or months trading and wait patiently for signals to take action and avoid trading unless justified by your trading system.