Five trading habits must adopt if you want to succeed as a Forex trader

“The key to victory was creating the right routines.” - Charles Duhigg, The Power Of Habits

If you were to search for what distinguishes high-performers from everybody else, you would most definitely find a list of habits, those things that are repeated every single day until they become automatic.

The powerful thing with habits is that, once they are put in place, they stick. In fact, it requires much less effort to act on an habit than to act out of willpower.

What’s amazing is that you can rely on your habits to slowly bring yourself closer to your goals day-by-day.

In trading, habits create consistency. The trader with the most positive habits in place doesn’t struggle to get back on track when things don’t go well. That trader relies on his habits to move forward and remain on the right track.

One could say that habits are like the barriers on the side of the road. Of course, they can break, but in most cases, they keep the cars moving in the right direction.

Since habits are so important and since I had to work so hard to establish the right habits in my own trading, I wanted to share with you my top 5. Those are the habits that will ensure you control yourself and stay centered in your trades. Those are also the habits that will help you figure out what you need to work on.

Habit #1: Mentally Preparing Yourself

Successful Forex traders are able to take the trades the market offers them because they are prepared.

Being mentally prepared involves several aspects, but one thing is sure, you must know mentally what your perfect trade setup looks like.

In fact, the only way to take the perfect trade when it presents itself is to have a mental image of it. To do this, you must invest some time watching the chart, backtesting, and most importantly trying to understand the circumstances that make a great trade setup from an average one.

Habit #2: Asking Yourself A Very Simple Question

Most inexperienced Forex traders get caught up in entering trades based on emotions. When they feel stressed, angry, afraid, etc. they let the emotion guide their decision making process.

However, I saw a huge decrease in the number of bad trades I entered after I started taking some time to re-focus myself upon entering a trade. That was done by asking myself a very simple question as I’m starting to set up my trade order:

“Upon reviewing my trades, will I truly be proud of myself for entering that trade?”

You should be proud of entering all the trades that respect your plan because, in the end, you did the right thing.

If you get a doubt signaling that you won’t be proud of yourself for whatever reason, better stay away from entering the trade you’re looking at.

Habit #3: Planning & Review

Of course you can take thousands of trades and gain trading experience, but if you’re not reviewing, you won’t progress.

As a result, you must take some time daily or weekly to go over what you’ve done. That only takes 30 mins but it’s very easy to skip.

Then, you’ll want to classify your trades as follow:

Good winning trade
Good losing trade
Bad winning trade
Bad losing trade

Quick definition: a bad trade is any trade that doesn’t respect your initial trading plan. A good trade is any trade that fully respects your plan.

Classifying your trades in this manner will allow you to evaluate how you’ve performed and, most importantly, what you need to fix.

Habit #4: Recognize When You Need To Stop

No, I’m not talking about stopping to trade after a series of losses here, although that can be useful too.

I’m talking about the amount of time you spend in front of your computer. You need to reduce it. Why?

There’s something called the 70/20 principle in trading:

According to Mark Boucher, the #1 money manager ranked by “Nelson’s World’s Best Money Managers”, about 70% of the moves in a given market occur 20% of the time.

That means you don’t need to trade all the time to make money. That would even be counter-productive.

What you need to do is find the 20% of the times you can trade at which the market you are trading offers the best opportunities (i.e. the London open on some pairs). Then, you want to focus on trading at that time.

I personally know traders making their living trading only 1 hour a day. They’ve taken the 70/20 principle to an extreme but it works.

And if you think that this principle doesn’t apply to swing trading, you’re wrong! Swing traders do not need to watch the chart all day either. As a matter of fact, the crucial 20% consists of specific candle close.

Once you’ve implemented that principle, spend the rest of your time in familly, with your spouse, or doing something you love (perhaps reading the great articles on FxStreet).

Habit #5: Surrounding Yourself With Other Traders

We’re getting to the habit that made the biggest difference in my trading career. If you could implement only ONE thing from this article, implement that one.

Simply said, if your #1 goal is to trade Forex like a professional, you should make an effort to surround yourself with other successful/full-time Forex traders periodically.

For instance, every month, I organize an in-person event in which traders meet up to chat (usually in the evening). We invite people in the group to present a small workshop on a trading-related topic that interest them.

The goal of those events is simply to bring people together. It helps us, as traders, to get momentum back when things aren’t going as expected in the market. It’s also a great way to expand our horizon as traders. In the beginning, talking to fellow traders is what got me to change my way of thinking.

This is invaluable, and I bet there are full-time traders in your city. A good place to search for those types of groups is www.meetup.com. Select your city, type in ”trading” and go through the results.

If you find a good group, make it a habit to add value (i.e. contribute, don’t only take) and meet up with those people periodically.

Let me know how that goes!

What are you going to act on?

In this article, I’ve given you 5 simple habits you can implement today. Those things are easy to do. But don’t forget! They are also easy not to do, meaning you must make an effort.

To recap:

Mentally prepare yourself prior to every trading day
Ask yourself “Upon reviewing my trades, will I truly be proud of myself for entering that trade?” before entering any trade.
Plan, review, and classify your trades frequently.
Don’t spend all your days looking at charts and entering trades
Surrounds yourself with traders who have achieved what you want to achieve.

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Trading currencies (or any other financial market) involves substantial risk. There is an important potential for losses that traders must be aware of. Your trading results may vary. Although I, Etienne Crete, truly want you to succeed in trading, it is impossible to guarantee that any advice or training provided on DesireToTRADE will result in gains. In addition, losses are possible. It is highly recommended that you do not trade with money that you cannot afford to lose. All content on this website is for informational purposes only.