One of the most important steps towards becoming a successful and profitable forex trader is to understand the strengths and weaknesses that you have, but also consider your unique personality traits and identifying which are not suited for forex trading.
Forex trading involves the right method and the right attitude and mindset to become successful. While many traders blame their method, few think to evaluate their personality traits or their attitude to see where they went wrong.
The following personality traits, habits, and characteristics cause more than 80% of traders to fail. If you recognize any of these traits, it is crucial to take a step back and see how you can improve your trading psychology to see if it makes a difference in your trading says Madelien van der Merwe from Forexrecommend.com
Lack of responsibility
Many forex traders believe that they can earn great profits with minimal effort. This is not the case and is certain to lead to a significant loss. Professional traders will be able to tell you how much effort, dedication, and patience it took to learn what forex trading is, how it works, how to read charts, how to conduct analysis, and so on.
Many traders who cannot take responsibility for their actions will always blame others, the market, the market conditions, news that drive the markets, their broker or anything and anyone else other than themselves.
These forex traders make up for a significant amount of the losing majority in the forex market. They fail to see that they are standing in their way of success, and they subsequently fail to change this.
Believes everything and lacks discipline
When traders start in the forex market, they will be bombarded with information and a lot of false claims. These false claims may also come from sources that are legitimate, but that are scammers.
The rule of thumb is that if it looks too good to be true, it usually is. Many traders buy systems that promise success overnight, believing that it will work.
This also indicates a lack of discipline as these traders believe what they come across first without dedicating themselves to the necessary research. In addition, traders do not apply themselves to their trading plan and keep to it, leading to inevitable failure and significant losses.
One of the first things that beginner traders must ensure they have is commitment and discipline to follow their trading plan no matter what. If the trading plan does not work, traders must evaluate it to find any areas where they have missed something and adapt their plan and test it.
Cannot accept being wrong
It is unlikely that a beginner will experience a winning streak and even professional traders can be wrong in their analysis of the markets. The financial markets are unpredictable, and traders must accept that they have made a mistake.
Instead of blaming something or someone else, traders must go back to their analysis and trading plan to identify where they went wrong, adapt, and move on.
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Traders who are anxious and nervous are unlikely to be successful in trading. Traders need to learn patience in waiting for the right entry and exit opportunities. There is also patience needed in holding positions at times, depending on the trading strategy used.
Anxious and impatient traders are likely to allow their emotions to get the better of them and direct their trades, which could be detrimental.