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Friday, October 10, 2008

The Secrets of Top 5% Forex Traders

By Joel Gardner

There are basically two category of forex traders. There are the elite traders which forms the top 5% of the cream and there are the average Joe which form the rest of the pack. So what set these two groups apart? Well there are several key differences which the elite traders and the average traders have. Thus if you wish to be successful like those in the top 5% category, you have to learn to find out what are the main strengths. In this article we will show you a few secrets of the top 5 % forex traders have in common.

1. Forex is their labor of love

One of the factors which sets apart a good trader from the average trader is their dedication to their work. When a person is passionate, they will make efforts to know more about what they are doing. Another benefit coming because of passion is that they will recall better the information that they learned. This is also why sometimes the top 5 % forex traders can act quickly to circumstances based on the information they recall. Thus if you wish to be a good trader, you must first of all feel passion for Forex.

2. They manage their emotions

The best traders in the Forex market have an unique quality of being able to divorce their emotions from their trading. They don't not follow the market sentiments nor allows the market to dictate their emotions and influence their decision making process. Warren Buffet once said, if you cannot stand and watch your investment holdings depreciate by 50% without flinching, then you should not be in the stock market. What Warren Buffet said is very correct. If emotions are allowed to influence or judgment, then our investment decision will not be objective.

3. Knowing how to manage risk.

Keep in mind that this doesn't mean they always limit their risks as much as possible. On the contrary, the most successful traders risk thousands on certain trades because they know what they stand to gain.

A lot of the times, what stops a trader from trading is not just lack of investment capital. It is also the willingness to want to take risk on a trade. This is where the leader of the pack differ from the rest of the pack. Therefore if you wish to excel in forex trading, you will need to take calculated risk.

4. They keep trying

In everything that we do, we must be persistence to pursue it. However in the forex market, you will require a little more persistence. This is because you are dealing with real money and every effort that you make is costing you money. In most other case, even if your persistency do not pay off, you will lose just some time for your efforts. Having said so, you mustn't let the time that you failed to discourage you. Rather you should take stock of the situation, learn from it and move on and keep trying.

Of course not everyone have all the traits to be where the top 5% traders are today. But we have to remember that everyone work to get to where they are. The successful ones certainly wasn't born to be a top trader. Somewhere along they learn to be better than the rest and that how they differentiate themselves from everyone.


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