How Did The Wealthy Forex Traders Become So Successful?

Posted on October 13, 2008
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by James Woolley
Not many forex traders manage to achieve full financial independence through trading the forex markets but a small minority of people do actually manage to make money from this occupation. In fact some people have become millionaires through forex trading, so how did they achieve this feat and what qualities do they possess?

Well I think the major quality that many top forex traders possess is discipline. They will have a set trading system in place that they rigidly stick to every single trading day and they will never deviate from this system. This takes a lot of doing and is indeed the downfall of so many aspiring forex traders. It’s all to easy to lose your discipline and make rash trading decisions after a few consecutive losing trades, but the successful professional trader will not do this because they will have full confidence in their preferred trading system in the long run.

This brings me on to my next point which is the actual trading system itself. Obviously if you are going to be successful you need to have your own profitable trading system in place. This is a major obstacle in itself because it can take many years to come up with a system that generates consistent profits.

However it should be said that you should not be wasting your time chasing that one outstanding forex system that has a 90-100% win ratio and will set you up for life. This holy grail system simply doesn’t exist, and in fact you can still make excellent profits and a comfortable full-time living trading a system with a much lower win/loss ratio.

The key is to use strict money management rules first of all so you should only be risking 2-3% of your bank on any one trade. Secondly you should employ stop losses and target prices that maximise your profits. For example using a stop loss of 50 points and a target price of 100 points, for instance, is often a better option that using a straight 50 point stop loss and target price because it means you need a fewer number of winners to losers in order for a system to generate profits.

Top professional traders will tweak their stop losses and will often find a way of letting their trades run for as long as possible in order to maximise their profits. This is crucial because even the most basic of systems can potentially be made profitable by cutting the losing trades early and letting the winners run.

So the overall point is that if you want to become a profitable forex trader yourself, you should find a solid trading system first of all and then optimise this system by doing a lot of backtesting and optimising the stop losses and target prices in order to maximise your gains. As long as you are disciplined and stick rigidly to this system then there’s no reason why you can’t join the small group of wealthy forex traders.

Click here to read a review of Forex Candlesticks Made Easy and to read more about forex trading including the exact 4 hour trading strategy that James Woolley uses to trade the markets.

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