Even though there may be a grey area between them, the forex trading market consists of two categories of traders i.e. the expert trader and the amateur trader. The amateur trader tends to make constant mistakes in FX trading and treats the entire process as a form of gambling while the expert trader is all about precision and objectivity.
Despite the fact that it takes a considerable amount of effort to go from being amateurish at forex trading to being an expert, it is possible with the right kind of attitude.
If you have completed your forex training, know all the basics of forex trading, and are now looking to kick on and become an expert in the industry then you should know that for this to happen you will have to pick up all the habits common amongst expert forex traders.
Treat Forex Trading like a Business
When you invest your capital into a company, you conduct due diligence into what risks the company is going to face and establish ways and means to cope with those risks.
Forex trading is no different, which is why you should treat it like a business as well. This means assessing risks and rewards before opening your positions in the market.
Marry Forex Trading and Money Management
Most expert forex traders make sure that they incorporate money management techniques into their strategies. Money management, in fact, is the most preferred way of protecting positions against the risks in the market. A typical example of a money management technique is to never let the value of your trades go higher than 5 percent of your total account equity.
Incorporate Risk Reward Strategies
Another difference between expert and amateur forex traders is that experts always make sure to focus on risk reward strategies while trading on the market. Risk reward strategies, essentially, allow you to minimise risks in your forex trading positions.
With the right risk reward strategies, you would be ensuring short term as well as long terms profits. Furthermore, using such strategies would also allow you to reduce the stress that the foreign exchange can create in you,
Formulate and Follow a Forex Trading Plan
Amateur forex traders would find FX trading to be tremendously exciting. They would feel elation when they make huge gains and depression when they incur losses.
On the other hand, expert forex traders are completely free from such emotions because they know how they can affect the outcome of their trading efforts.
These traders tend to avoid these emotions by using well defined forex trading plans. They know that their actions would remain the same whether they win or lose.
Being Patient in the Market
Because expert forex traders are not hampered by their emotions, they are extremely patient and precise in the market. This is something that amateur traders can never achieve in FX trading and their trades are often random and based on their emotional reactions to their performance.
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