10 Tips to Get You Mentally Prepared for Forex Trading Success

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This article, will list 10 points (at a random order as they are all simultaneously essential) that you seriously should take into consideration if you are willing to commit as a trader. We probably all heard that one of the concepts regarding Forex Trading is 10% knowledge and 90% Psychology. When we say Psychology, it is not only about the emotional part associated with trading that comes from our reactions before adversity or a series of losing trades - it is also about a necessary Mental Preparation that must be fully understood and interpreted as the main basis for someone to be able to become a successful trader, which stretches way beyond the emotional patterns.

1 - Acknowledge that you must acquire your skills with Professionals: The Forex Market is a real market, full of professionals eager to make money. Finding a winning formula through trial and error, is not going to happen. Forex is just like Formula 1: experienced professional drivers/traders learned from the best and have been perfecting their skills for ages. If you think that reading a few books and some opinion articles you will get to know how to drive as they do, you won't even get to race as you'll fail the qualifying round… Being a dedicated self taught person will not be enough to succeed at the Forex Market: you need to learn the skills first, and the best way to do it is to follow the 'path walkers'- the Professionals who can teach you and share everything there is to know about Forex Trading.

2 - Do not create false expectations: The Forex Market is not a winning lottery ticket just waiting to be cashed in. If you are thinking that a few trades are going to make you rich, guess again. Why? Because even if you are blessed with luck and the alignment of the planets, after getting a few winners, sooner or later, the losers are going to catch up and before you know it, your trading account is going to get increasingly smaller because you do not have nor a strategy neither a trading plan, and you are simply not prepared to watch your capital disappearing. As a matter a fact, if you are not truly ready, before that scenario, you'll probably try to get back at the Market in order to claim your money back, which is one of the most common Trading mistakes. Always keep in mind that a bank deposit will only get you about 3% interest per year (with any luck), so if by the end of the year your trading result is at 12%, know that this is a great outcome that very few are able to provide.

3 - Patience is a virtue: Waiting patiently for proper Market conditions is an art form. It is a skill owned by a few and compared to a Sniper: he studies the opponent, plans his actions, he's placed strategically and executes as scheduled when all the parameters are met. Trading is not different: statistics will tell you that those who trade 'all the time' in every time frame will get to a spiral of losing trades that will bust their accounts at any given moment. On the contrary, those who trade bigger time frames, they take their time analyzing the Forex Market, placing their orders in a quiet orderly manner and only when it meets their rules, therefore accepting whatever result from it, regardless of its positive or negative outcome. At the Forex Market, it is essential that you know your Trading Plan and your strategies that you must follow with military discipline and without straying even an inch… No matter how long it takes.

4 - Don't gamble, Invest: Do not ever let your feelings run your trades - not even when your trades are running smoothly. Forex is a financial market, not a game and that is why gamblers, who are looking for fast money and adrenaline, are meant for failure when comparing to professional traders.

5 - Be disciplined and act accordingly: Don't play with it, don't gamble, be serious about it, don't act like a loser and don't be overconfident! Be committed to yourself and your trading success and make sure that you are willing to own the necessary discipline that will get you to your goal. This discipline will also make you invest in your training with professionals, leading you in your thorough and objective market analysis, in your waiting for the perfect moment, in the acceptance of all your emotionless defeats and victories - which will get you to your final goal: Consistent Profits!

6 - Only trade the money you don't need: One of the best ways to decrease the amount of emotion involved is to trade using money you don't need for paying your mortgage or other expenses. If you need the money that you are using to trade with, it's better not to trade at all. Why? Because there will be the case when you need to make that specific amount on that specific date which will force you to place or manage a trade in a different way, in a time where the market was 'telling' you to stay out or to take the profits, only to find your trading account in an abnormal position of overexposure and even at the risk of watching your positive trades turn into negative.

7- Know that each trade is not related to the next: Many times, especially after a few winners and because you get overconfident, you start looking at the Market from a carelessness point of view, which turns out to be a colossal mistake as it will get you to place trades against the price direction or simply before no signals at all. On the contrary, after a series of losing trades, fear gets in your way by stopping you from placing orders even if the Market is showing clear signals for trading. What you must realize is that, whenever these two scenarios take place, emotion can never superimpose reason and logic.

8 - Invest on the Daily Time Frame: Quality and not Quantity The Daily Time Frame presents us with a global analysis of the current Market behavior. By placing your orders at the End of the Day you are automatically reducing the chances of Overtrading. Aim for Quality Trading, not Quantity Trading.

9 - Don't fall in love with your trades: Don't let your trades run forever just because that winning series is making you feel like Superman. i.e. don't let pride and the need to be right stop you from closing a losing trade with increasing signals against your position. Remember: the Market doesn't care about what you are doing nor thinking, so pay your respects!

10- Have a Trading Checklist and a Trading Journal: This may even sound secondary, but two of the most powerful tools for a trader are his/her Checklist with the Strategies and the Trading Journal. The 1st document is where you keep your entry (and exit) parameters that must coexist every time you place an order after market analysis; The 2nd one is where you register all your trades, why you took them, and what you've done right and wrong. This kind of record will allow you to keep track of your behavior, mistakes, strengths and weaknesses, and your whole evolution as a trader. These are extremely helpful tools that you will help you along the way.

Most people that start trading the Forex Market have no clue about the 10 points we mentioned in this article, thus they don't use them (due to lack of knowledge and skills in this area of expertise) which will, sooner or later, lead their trading account to 0 and afterwards blaming the broker, or the news that were always against them, or that 'infallible' inside tip that they decided to follow which didn't work, etc… Therefore never admitting that the main issue was actually their lack of mental preparation that should be created and implemented until it becomes a habit as natural as breading.

Happy Trading.

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