As a Forex Trader, especially as a beginner, it is important you know how to identify a successful Forex trader. Why?
This is because the internet is filled with hundreds of self-claimed successful forex traders, who are looking to collect money from beginners, in exchange for one or two trading materials.
These forex traders only display their luxurious fast cars and their flashy clothes. All these are in an attempt to convince Forex traders to buy their courses or subscribe to their “VIP signals”.
They do not show the losses they make while trading in the forex market. This is a problem, especially for beginning forex traders who need successful mentors to guide them.
In this article, we will show you how to spot successful forex traders easily. But first, you need to know who a successful trader is.
Who Is A Successful Forex Trader?
Success is the accomplishing or achieving of a goal or result hoped for. The main aim of forex trading is to make profits. Other goals can include understanding how the forex market works, developing a better trading strategy, and other individual goals.
Based on the general goals of forex traders we can give a clear definition of a successful forex trader.
A successful Forex trader is a trader who has been able to consistently make a net profit from the Forex market by developing a well-refined Forex Trading strategy through a general understanding of how the market works.
We understand some people can be lucky enough to make one huge win. That is technically success as they have made profits. However, forex trading is not a one-time event. You will continue trading eventually.
With time you will cover up the one-time profit with losses if you do not have a good trading system. Don’t take our word for it, you can try gambling on a demo account and see the results.
Our definition of a successful forex trader might seem to require a lot, but it brings more meaning to the common quote “95% of Forex Traders are Unsuccessful”
Now that we have been able to give you the definition of a successful forex trader, let us get to the main topic of the day. How to identify a successful Forex trader.
How to Identify Successful Forex Traders?
To identify a successful forex trader, there are clear signs to watch out for. They include
- Successful forex traders do not need your money
- They don’t get excited over winning trades
- They show both their wins and their losses
- Successful traders have a set trading plan
- They Stick to their Trading Strategy
- Successful Forex traders don’t display emotions when trading
- They spend less time on the charts
We’ll now explain them below:
#1. Successful Forex Traders Do Not Need Your Money
Successful forex traders do not need your money. Well, they definitely want it, we all do, but they do not need it.
Successful forex traders already have money they make from the forex market. A successful Forex Trader will prefer to focus on the Forex market and his/her trading system than to go about selling VIP Signals, secret strategies, and premium membership.
All these are extra work and it will be difficult to focus on trading while actively selling signals and other materials.
A truly successful trader already makes enough money from the markets. Say they need more capital to trade, they already have prop trading firms that offer them way more capital than they can get from selling signals.
They just need to pass a challenge. The challenge is probably the reason why most of these Forex gurus don’t patronize these prop trading firms.
What does this mean? Traders you see always going on about their VIP signals or paid membership groups are most likely trying to make profits from you. Not the market.
We have seen traders who open “forex academies” after three months of trading.
Now we aren’t saying that any trader who sells signals or paid courses is a scam or is unsuccessful. Instead, you should watch out for traders who don’t let you breathe, showing you their secret magic courses.
Now to the next way to easily spot a successful forex trader:
#2. They Don’t Get Excited Over Winning Trades
A trader who always flaunts his winning trade is most likely not a successful forex trader. Why? Because that is a clear sign that it is a rare occasion for him.
Okay, let us use a simple example to explain. Everyone gets excited when they succeed. But it gets normal after some time. For example, we see artists begin to disrespect awards when they win them continuously.
Or how Messi fans no longer get excited when he wins a Ballon d’Or.
Successful forex traders don’t get excited over winning trades because it has become a normal routine for them.
Flaunting wins or getting excited over wins also shows that a trader has no control over his emotions. When you are advised to “trade without emotions”, you understand it as “you shouldn’t feel bad when you lose”. But it goes both ways.
Feeling too excited when you win still signals that you have little control over your emotions.
Instead of showing all their wins, here is what a successful forex trader is most likely going to do:
#3. They Show Both Their Wins and Their Losses
Losing trades is a part of forex trading. This is because there is no strategy that is 100% sure in forex.
Every successful trader understands this as they have gone through the process of losing continuously. They know that the journey of every forex trader is littered with losses, disappointment, self-doubt, and setbacks.
These losses serve as an opportunity to improve one’s trading style. Hence, successful traders will not be ashamed to show their losses.
Do you know any forex mentor online or offline who shows both his wins and his losses? Well, that trader might just be one of the few successful ones out there.
#4. Successful Forex traders Have A Set Trading Plan
As a forex trader, to become successful you need to have a laid-out plan. The same goes for every other discipline in life. “He who fails to plan is planning to fail”.
So, this is how to identify successful forex traders. They usually have dos and don’ts.
For example, that trader who doesn’t open more than a certain amount of trades in a day. Or does not trade during certain periods. It could also be that he doesn’t trade certain forex pairs even if they are major pairs.
Now it seems that such a trader has placed a lot of burden on his shoulders, but that’s not the case. These restrictions help to prevent extremities when trading.
For example, a trading plan will prevent overtrading, revenge trading, little or no risk management, and other factors that cause losses and losing streaks in forex.
So, when you see a trader burden himself with such rules, understand that he does that based on experience. He has probably studied his trading style and he understands that those extremities cause losses.
He is most likely a successful forex trader.
#5. They Stick to their Trading Strategy
It is not enough to have a trading strategy; can you stick to it? Successful Forex traders have developed their trading strategy and will stick to it.
You can’t have a plan and do otherwise and expect success based on that plan.
Do you have any friend or mentor who uses price action today, next he is using indicators or various other strategies?
He may seem to be an expert because what shows expertise better than handling various tools at once? But this is far from the truth.
In Forex trading, you will perform better as a master of one trade instead of as a Jack of all trades. So stop being wowed when you see traders using so many tools to trade.
It may just be a sign of an unsuccessful forex trader. To the next sign:
#6. They Do Not Display Emotions When Trading
As a Forex trader, it is common to hear terms like “Trade Like a robot”. Of course, if we could trade completely without emotions, we would become a far better version of ourselves. But unfortunately, it is not possible.
However, we can control our emotions to a certain degree. Enough for them not to be visible on our faces. A trader who visibly gets frustrated, angry, sad, or even happy because of a trade clearly has no control over his emotions.
Successful traders, no matter the situation will remain calm while trading. Whether it be during news releases, busy forex trading sessions, or during periods of high momentum and volatility.
They try to stay calm and critically observe the situation. They ensure they don’t take any action outside their trading plan.
Aside from that, successful forex traders have a lot of experience from trading in the forex market. Hence, anything they see in the market while trading is not new.
Losses? 1000 pips profit? A 100-pip candle? They have seen it before and will most likely not be moved by it. Honestly, to trade like a robot, you must have experience.
Only after several losses and wins can you become numb to the pains and stress of the forex market.
Finally, on our list of how to identify successful forex traders:
#7. They Spend Less Time on The Charts
It’s good to spend quality time studying charts. To become a successful forex trader, you should regularly study the charts and backtest to improve your trading strategy. Especially when the market is closed or during Asian sessions with little activity.
Spending lots of time on the charts while actively trading can be bad for traders.
The longer time you spend on charts, the more opportunities you see, and hence, the more trades you enter.
Most of these trades may seem so sure even though they do not fit your trading strategy. I mean “AUD/USD must hit that resistance. It just has to I can feel it”
Successful traders understand this temptation and will avoid it. They may not need to actively avoid it because they don’t need to spend much time on charts.
This is because, after years of trading the same plan over and over again, they understand their strategies well. They can know the times they are most likely to see good trading opportunities.
Hence, they don’t need to spend countless hours constantly staring at the charts.
They perform their analysis; wait for the price to reach their point of interest and place their trades if all the entry conditions have been met.
Do you have that friend who is always staring at the charts? Well, now you know why he or she is not a successful forex trader.
All these listed above, are some of the most prominent traits of truly successful forex traders.
Frequently Asked Questions About How to Identify Successful Forex Traders
What Questions Should I Ask A Forex Trader?
These are the right questions to ask a Forex trader:
How long have you been trading Forex? What strategy do you use to trade the market? How should I analyze the market? At what time should I place my trades? How much should I risk per trade? How much profit can I make trading Forex?
What Is the Secret of Successful Forex Traders?
To be a successful forex trader you need to be disciplined and consistent in practicing to improve yourself. Also, you need to learn to cope with the uncertainty of the Forex market.
What Problems Are Faced by Forex Traders?
Some Problems faced by Forex traders include high volatility, wide spreads, lack of capital, and lack of proper guidance.
What Every Forex Trader Should Know?
Every Forex Trader should understand Risk Management as it helps traders last longer on the Forex market. Without properly managing risks, a trader cannot succeed in the forex market.
Is It Hard to Be Successful in Forex?
Yes. Forex trading is difficult and the discipline and skills required to be profitable in forex are high. One can argue that with half of this discipline, you will be successful in any other field of life.
A Conclusion on How to Identify Successful Forex Traders
There are many more ways to easily identify successful forex traders. We have listed some which we learned due to our experience trading in the Forex market. If you have more you think should be added, feel free to contact us.
We would also like to point out that this article is here to guide you in your forex trading career as you will come across a lot of people claiming to have the secret of the forex market. It should help you recognize and avoid the schemes of those unsuccessful forex traders claiming to be successful.
References
Success Definition – Cambridge Dictionary
Controlling your emotions –Psych Central
Is There a 100% Winning Strategy in Forex? – Traders Union
Trading Psychology: How to Trade Without Emotions
Should I have a trading plan? Why? Read & Decide – AvaTrade