One of the most popular investment instruments at present is trading Forex. In the financial market, the key figure is the trader, which affects such economic indicators as price, demand, supply. The profession of trader is becoming more and more prestigious and popular every year, it is due to the fabulous size of income, which is received by highly professional experts. Some 10-20 years ago you could only dream about that, and today anyone can try their hand in this field. Many novices ask themselves the question: how to become a successful Forex trader and what qualities should you possess? Let`s try to find out together.

What is a Trader?

A trader is a participant in exchange trading. In the narrow sense, it is a speculator, who constantly monitors the market situation and often places trades. In the broad sense, anyone who has invested in an exchange asset and can sell it later.

A trader can be a professional or amateur (private). The difference between them is that the professional has a license, which allows him to make trades directly through the exchange, and the amateur to trade needs a third party - a broker. A professional trader can work for himself or conduct commercial activities, serving clients. By law, a private trader cannot trade for someone else and has to pay interest to an intermediary.

Trader's job is to carry out trading operations, the purpose of which is to generate income. The successful Forex trader sells or buys securities, currencies, bonds, and shares. The trader needs to analyze the incoming information very carefully, as well as to be able to react in time to the changes. Also, discipline is one of the important factors of the success of operations on buying and selling.

Types of Successful Traders

There are several ways to classify traders as per:

1. Strategy chosen.
2. Trading psychology

Types of traders by the style of trading:

1. Scalpers

To become a scalper, you need a lightning-fast reaction, perseverance, and concentration, as well as a lot of free time and nerves. 
Features: the choice of the most liquid instruments, you need the most volatile pairs, giving a great opportunity to open trades; trading is carried out mainly during the overlap of the sessions in the hottest hours of the market.

2. Daytraders 

 Good for those who have free time to analyze and monitor trades, but do not want to monitor open positions every minute. 
Features: the need to periodically monitor open positions; keeping an eye on economic statistics 

3. Long-term traders

For this type of trading, you need to create great patience and calmness. Absolute advantage - time. You don't need to look at the chart all the time and consider local news.
Features: large stop orders to replant the price movement against the trade, which also implies a significant amount of deposit; minimum time spent on trading; focused on profit/loss of several hundred thousand points.

Types of traders according to trading psychology:

• Intuitive.

Makes decisions following his intuition, self-assessing the situation, and not guided by someone else's opinion.

• Intelligent

Uses fundamental/technical analysis when making a decision, can assess the situation and draw the right conclusion.

• Instinctive

Follows his instincts. 

10 Beginner's Steps to Become a Successful Forex Trader

• Treat trading as a business. 

Trading as a hobby will cost you a lot: treating it superficially, you will not get the necessary knowledge and experience. It's strange to think of trading as a job. There is no such thing as a regular salary: a trader can work all week for 10 hours and on Friday he will be with nothing. So, approach trading as a business. As with any business, trading involves costs, losses, taxes, uncertainty, and risk, and these factors must be taken into account. In Forex successful traders are really good at planning which is equally true for both business and trading. If your goal is to get firmly established in the industry, make every effort and time to study and develop strategic plans.  

•  Always use a trading plan 

 A trading plan is a set of rules that defines entry, exit, and money management criteria. A good plan is often based on experience or market observations and is developed through research and exhaustive testing. Developing a profitable plan takes a lot of time and effort, and its main advantage is consistency. It is more difficult, even for successful traders in Forex, to follow the plan than to develop it. It is necessary to fulfill all conditions without making excuses, without guessing or otherwise deviating from the rules, which were so carefully created. If you participate in trades, which, although profitable, but do not fit into your plan - it is bad trading. Often in unsuccessful trades emotions are to blame: fear, greed, impatience, self-confidence, etc. In other cases, the failures are due to "pilot error". Following the plan is not as easy as it seems, and many traders need a lot of effort to develop the necessary skills. Having developed a certain trading system, you need to deviate from it only in extreme cases. You need to constantly analyze the results of your own system, make adjustments, and constantly improve it. Haphazard trading is a direct way to the loss of invested funds.

• Don't risk your money if you're not ready to lose it 

Although traders expect to be able to make money (after all, that's what trading is meant for), it's important to understand that success is not guaranteed. If you are not ready to lose your hard-earned money, look for another way to multiply it, for example, a deposit in a bank. Losing money is always hard, but the worst thing is if it happens at the very beginning of the journey. You shouldn't use money that has been put aside for other purposes: the education of your children, mortgage, or everyday expenses. First of all, it is generally a terrible idea that can lead to catastrophic financial losses. Secondly, when you use money that you can never lose, you are under terrible stress. Such pressure leads to bad decisions and ultimately to losses. Before you trade, it is important to honestly admit to yourself that this is "extra" money for you. If you don't have any extra money, keep saving until you have it. 

• Use technology 

Online trading has been around for a long time, but the tools that are available to modern traders are constantly being improved and developed. Among the more powerful technologies are automated trading, innovative tools for market research and testing trading systems based on historical data. Mobile trading applications allow you to analyze trading conditions, place orders, and manage positions using a smartphone or tablet. Together, it gives the trader an incredible level of flexibility. 

• Develop a trading plan based on personal observations 

The driving force behind developing a trading plan should be your research, not emotions or speculation. There is currently so much information in the public domain that it is difficult to resist and not take advantage of other people's research. This may come sideways for several reasons. First, any technique, no matter how praised it may be, can be disadvantageous. Secondly, even if it worked for someone else, it doesn't necessarily work for everyone. There are different trading styles and different resistance to risk, which means that one trading plan cannot suit everyone. Finally, you must fully understand the logic behind your plan. Otherwise, you will lose confidence in it, and this can lead to your invisible deviation from the rules. 

• Develop an exit strategy 

Before you open a position, you should understand how you will close it. This should be set out in your plan for both successful and unsuccessful trades. Among successful traders in Forex, there is an opinion that money is made at the exit. This means that regardless of when a position is opened, it is the exit that determines whether it is profitable or not. Although we often think about the exit in terms of profit targets in dollars or loss limits, there are other methods to determine the moment. A trading plan can imply an exit if a certain moment or event is reached, for example, closing a trade after a certain barrier is overcome, or after a specified time or at the end of a trading day. The exit signal can be a certain type of market activity or technical analysis data. For example, you can set Stop Loss and reverse trading if a technical indicator gives a corresponding signal. Regardless of the approach, it is important to always have an exit strategy before starting trading. This can be a key factor in the success of not only the transaction, but also the business as a whole. 

• Assess risk and protect capital 

Most traders succeed by managing risk and protecting their trading capital. High levels of risk should also be avoided in specific trades. The industry's accepted risk standard is no more than 2% per transaction. Traders with small accounts often feel this limits their profits and as a result, take much greater risks. And to lose all the money, it will take several losing trades in a row. One of the ways to manage risks and protect capital is to use a Stop Loss order. It limits the risk for each trade. We all would like to stay profitable at all times, but it is impossible. As loss making trades are inevitable, it makes sense to estimate how big the losses can be. If the trade moves in the wrong direction, the trade is closed and the trader moves to another trade. Insufficient capitalization - in other words, lack of money - may be the main reason why many traders fail. There are several other reasons behind it. First, to make money, you need money. Imagine that a trader earns 30% of the profit a year. This may be enough if there are about 200 thousand dollars in the account. However, 30% of the profit from an account of $5000 is not enough to pay the bills. With insufficient capital, it is also impossible to resist the inevitable strikes. 

• Be able to stop in time

There are two main reasons to stop trading. First, it is an ineffective plan, in the course of which the trader suffers more losses than expected. Markets change, interest, and volume in individual trading instruments change, and trading plans simply cannot meet expectations. Perhaps, it is time to take a step back and re-evaluate the plan while remaining businesslike and non-partisan throughout the process. An ineffective trading plan is not necessarily the end of the world, but this problem must be solved. The second reason to stop trading is the ineffectiveness of the trader. Factors such as emotions, external stress, illness can affect here. A trader can develop a good trading plan, but not be able to implement it properly. To correct the situation, it is necessary to recognize any personal problems and deal with them. For example, if a trader cannot cope with emotions, he can apply an automated strategy. 

• Accept losses - and learn from them 

Although most traders are focused on success, trading is mostly about losing. In reality, successful Forex traders mainly evaluate not their possible profit, but how much they can afford to lose. There are always losses, and despite claims that some trading plans or systems are 100% profitable, in reality, many successful plans only make a profit in 40% of cases. The formula for success is to earn more on every winning trade than to lose on every losing trade. This is what makes traders profitable. Successful traders in Forex should not only be prepared for losses but also learn from them. To do this, you can start a trading diary. It will help you get important feedback and detailed information about individual trades, which you will not find in reports. As a rule, the diary contains the date, time, price, market direction, reasons for losses, as well as individual trading notes. You can keep such a diary to assess the overall effectiveness of your trading plan. 

• Look at trading soberly 

You should stay focused daily and not forget the big picture. A losing trade (or an entire day) should not be taken as a surprise. It is only a part of trading. But one profitable trade (or day) is also not a reason to celebrate, but only a step towards long-term profit. Since trading is a business, the total profit is important. Every trading day is just another day, no matter how it ends. As soon as the trader admits that both profit and loss are only part of the business, it'll be easier for him to deal with his emotions

Bonus Tip: The Importance of Forex Education

The discussion of Forex trading is very popular and in demand. Trading in the foreign exchange market is a very risky but also very profitable business. Every day thousands of people want to get fast money, open accounts, and as a rule lose. Before you start trading, you need to be trained in Forex and it must be effective.

Forex education is a long process that requires a lot of effort and time. It is necessary to learn to trust yourself, to overcome the feeling of fear, to have a sound mind and sober judgment. The desire for quick money should not take precedence over reason. Those obsessed with the idea most often fail.

What is Forex training for? Its purpose is to form a correct view of trading. In order to become a successful trader, you need to have certain knowledge and learn to analyze the market, that can be done in a few ways:

1. Fundamental analysis - assessment of economic indicators and their importance in a particular situation, helps to understand the market mood.

2. Technical analysis - mathematical analysis based on statistical data of quotes and price forecasting.

It helps to learn to understand the trading signals of the market, to navigate the indicators, and to follow the trends resulting from the most important events in the world.
Forex trading for beginners cannot be successful without high-quality training and learning the basics of trading.

Having studied the theory, open a demo account, which is no different from the real one, except the possibility of making a real profit. With its help, you can test trading systems, learn how to successfully trade Forex, train your exposure. It is better to use the account size for training as you can really open for trading. Trading with real money disciplines the trader and makes him more careful.

The Forex market gives not only great opportunities but also no fewer risks. Remember that the key to successful trading in the foreign exchange market is the constant training of Forex, work on yourself, and learn to control yourself only in your own practice.