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To Be In The Top 5% Of Traders, Do What The Bottom 95% Won’t
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To Be In The Top 5% Of Traders, Do What The Bottom 95% Won’t
I was having a conversation recently with an old friend of mine and we were talking about money and wealth and why some people obtain it and others (most) do not. My friend asked me “What do you think is the main reason why only a small percentage of people end up wealthy in this world？” Whilst that is a somewhat loaded question that could take a while to answer, the main answer is simply that MOST people are just not mentally prepared to do what it takes, consistently, to become wealthy. And its the same exact way in trading.To get more news about Trading Tips, you can visit wikifx.com official website.
Most traders end up losing, just like most people end up staying middle to low-class, economically speaking. The reasons why are very, very, very similar for the most part. When you exclude variables that really arent fair, like being born in an economically depressed part of the world or being born with a severe physical or mental handicap, the primary reasons why 95% of people fail at things like trading and business and wealth-creation, are pretty much the same across the board.
Stay in Trades Longer
The top 5% of traders, I guarantee you, are staying in trades much longer than you are. Use time to your advantage in the markets. Dont be anxious to close trades too early. Let them ride and give yourself a chance to catch a big move in the market that will net you some serious profits; this is partially how the top 5% of traders got to where they are.
Place Your Stops Properly and Intelligently (not greedily)
Properly placing your stop losses is truly one of the key factors that can or break you as a trader. Certainly, the top 5% of traders have mastered the art and skill of stop loss placement and you will have to as well. Perhaps the most helpful piece of advice I can give you on this matter is to use a wider stop loss than what you think you should. Most of the time, traders have the right idea of market direction or they pick a good entry signal, but their stop is too tight and it gets hit just from the natural daily price fluctuations that happen. They key is to place your stop outside of these daily price ranges and beyond nearby key levels.
Trade With Clean Charts and Focus On the End of Day Data
Traders who are making consistent money, over a period of years (not just a few lucky months), know that in order to see the most accurate view of the market, they need to focus on clean end-of-day charts. That means, they are focusing on higher time frame charts, mainly the daily time frame and they are primarily using THAT time frame‘s price action data to make their trading decisions. You will be very hard-pressed to find any long-term successful traders who solely look at the short time frames and scalp them. Scalping or day trading is a fool’s game that not only makes the entire process much more difficult, time-consuming and stressful for you, but lowers your odds of long-term consistent trading success.
Utilize a Clear Arsenal of Trading Strategies
Professional traders know exactly what they are looking for in the markets. They have a defined set of setups, of trading strategies, and they wait patiently for things to line up just right for their entry signal to form. You must have a CLEAR arsenal of trading strategies to succeed, you cannot just “wing it” and think youll “figure it out”. All you will “figure out” is that you were wrong and you lost money.
You need to make a trading plan that includes print outs of the best setups that you‘re looking for. So, if you’re trading my price action strategies, you would have a print out of the pin bar signal and its variations, for example, amongst other price action signals. You will want to have a checklist of sorts, that you go through everyday before analyzing the charts and before taking a trade.
Apply Sound Risk / Reward Per Trade
The top 5% of traders got to that position because they understand risk reward. They understand the math behind risk reward and also how to practically make it work by placing their stops and targets properly.
Part of risk / reward is actually realizing the risk / reward and you do that by letting the trades play out without your constantly interfering with them (like the bottom 95% do). When you learn to set and forget your trades, you will start seeing your trading performance improve slowly but surely. -
Forex trading can be easy if you learn. Never underestimate the power of knowledge.
Yes, I learned forex trading with this guide and there are so many good guides out there.