One of the most under rated Forex trading tips given is to be patient but if you learn to be patient not only will you make bigger profits with your trading strategy, you will reduce stress and spend less time on you trading. Let's look at why patience is key trait most currency traders have.
Emotions and Greed
humans are emotional and money brings out the worst trait when trading currencies which is greed. Most traders come to trading with real concept of what actually moves the price of currency pairs and they just see big moves each day and want to trade them but this is a huge mistake.
While there are big moves each day, there not all offering high odds trading signals but traders don't think about this and just trade them. Forex trading is the only occupation you can come into and trade with a 50 - 50% chance of being right. After all, prices can only go up or down and if you pick the right direction, you will win - right?
This is totally wrong because - you have to place a stop loss and have money management in place to protect your equity, so you can be right about the long term direction of the trend but get stopped out, by the volatility of price movement.
Many traders treat trading currencies in the same way as playing at a casino - they think its exciting and fun to trade often and think the more trading signals they execute the bigger their potential profits are going to be but this assumption is wrong and leads me on to the next point.
Working Hard to Force Profits is a Mistake
Many traders have trading strategies which take them hours per day to implement and their falling not only for the myth, there are high odds trade set ups each day, there also believing that a character trait which helps you make money in "normal" society, will also help make more money when trading currency markets and this is a good work ethic.
In most jobs the more effort you put in the more you will get out of it in terms of the salary or bonus you make but in the Forex markets, trading to much and making to much effort leads to losses. This is down to the fact that profitable high odds trades don't present themselves all the time. Traders believe they do and this is because there is a huge industry based around trading frequently and making money which leads me on to the myth that Forex scalping and day trading is a great way to make big profits.
The Day Trading Myth
Why do most traders scalp or day trade when all volatility within the day session is random? the answer is there is a huge myth built up by brokers that, this method makes money but all it does is make money for the broker. The myth is also reinforced, by the huge number of junk trading robots and expert advisors, who sell back tested track records based on greed.
The Longer the Time Frame the Better the Odds
If you look at nearly all the most successful Forex traders of all time - you will see, they follow long term trends and try and catch trends in the market which last for weeks or longer. By doing this they have the patience to wait for the high odds trade set ups and only trade when the odds are heavily in their favour. They work less hours and make more money with their trading signals.
Simple Systems Beat Complex Ones
There are another group of traders who are not greedy but clever and there view is that by having a clever trading system they will make bigger Forex trading profits but again this is not true - simple trading systems have a better chance of making money than complex ones.
If you have to many inputs in a trading system, it will break down in real time trading. This is proved by the fact the same number of traders always lose and its the majority - around 90%. If complex and clever systems really worked, with all the technology we have today compared to 50 years ago, more traders would win and they don't so keep your system simple and robust and you will enjoy Forex trading success
Don't Do What the Majority Do
The majority of traders have trading strategies and systems which trade to much. They spend to much time on their trading, scalp and day trade and lose - don't make the same mistake. Be patient and wait for the best trades, use a simple trading system and you will make more profits, in less time and with less effort.
In the animal kingdom, a animal that stalks its prey is patient and it will not move in for the kill until the odds are at their best and its the same in Forex trading - you need to be patient with your trading strategy and wait for high odds chart set ups and only when the odds are heavily in your favour should you trade them.
Many traders have unrealistic views on how much money they can make trading and want to get rich over night but when trading currencies it's the patient trader who wins long term and this trader knows patience is the key to success - all he needs is a simple trading strategy, based on long term trend following which is simple and robust and he knows, he will enjoy currency trading success. You will have often heard the phrase "patience is a virtue" and in Forex trading it's very true - learn to be patient and you will make long term currency trading profits.