Successful traders often reflect back on their early days when their bodies would tense and their hands would shake with each trade entered, and then, with their eyes glued to the screen, they would anxiously await the trade result with life or death anticipation.  They remember the unbridled exuberance they felt with a winning trade and the agonizing pain of losses.  They remember the emotional rollercoaster they would ride each day.  And then they marvel at how they managed to become successful in spite of all of that.

What most successful traders will tell you is that the turning point for them was the moment that they were finally able to achieve complete detachment between their emotions and their trading activity.  That moment when they understood that trading is their business profession, and all decisions need to be made with the precision and objectivity of a steely-eyed business owner.  It is that moment when they put all of their faith and confidence into their trading system leaving no room for the influence of emotions or feelings in their decision-making.

It would be great if new traders could just slip into a thick-skinned uniform that would make them invulnerable to the waves of emotions that accompany their early trading activity. Unfortunately, it takes months and years of trial and error, and mind over matter, to develop the essential habits that carry traders to long term success.

But, if they know what they are shooting for, new traders can begin the work of forming the right habits from their very first trade.  Here are some of the habits common to successful traders.

1. Know your trading boundaries: Determine the size of your trading account and make all trading decisions in proportion to the size of your account.
2. Develop a strategy: In the beginning, it might make more sense to buy a strategy and then back test until you completely understand how it works and can establish your own probability set up.
3. Set clear objectives for each trade: Each trade should have its own objective consisting of two exit prices – one based on a target profit and the other based on a maximum loss.  Trades should be entered with appropriate limit and stop loss instructions.
4. Seek comfort with your risk: Know that each trade incurs risk and that you control the amount at risk. Also know that the reward you seek is commensurate with the amount of risk you will assume.
5. Narrow your focus: Once you develop a plan, stick with it for at least two weeks. Journal your trades and conduct an objective analysis at the end of the period.
6. Set realistic goals: Successful traders set daily, weekly and monthly targets. They all become benchmarks for measuring their progress towards an annual goal.  Targets need to be realistic and based on incremental growth.  For new traders, high expectations can be your downfall.  Work towards consistency and breakeven so you can avoid being one of the 90% of traders who fail in their first year.

Whereas this is a very short list that traders should follow, we also have a full online trading tutorial called “Investing 101” that all new traders should read before attempting to trade online. Also here are a couple of articles from outside authors that out line the basics of successful traders and the 9 tricks of the successful traders as it relates to Forex.

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