It’s a Leap of Faith

There is one thing anyone who trades the forex market will come to realize at some point in their trading career is that at any given time the market can and will do anything.

As technical traders we have spent time studying the markets and have grown fond of the lessons price action has taught us. We use events of the past to anticipate high probability actions of the future. But the hard and cold reality is that the market is the only one that truly knows what the market is going to do!

In the market there are buyers and sellers. Buyers will move a currency pair higher, while sellers will move a currency pair lower. Since there are human participants in the market we use tools of nature in our technical analysis such as Fibonacci ratios and Elliott Wave analysis. But in the end the profitability of a trader comes down to our basic beliefs.

When the market is moving up there are more forex traders with a belief of the market moving higher then there are traders believing the markets are moving lower.

It is that simple!

To keep trading profitably we must exhibit solid trading beliefs in ourselves and in our forex trading systems. Here are 3 traits we must incorporate into our currency training belief systems to have consistent success.

1. We must pre-define the risk before entering any trade. We must be able to quantify the “what if I am wrong” question. It is always the trader that is wrong and never the market itself.

2. Listen to the market. It will answer your question. Don’t ignore what the market is telling you. Solid traders will cut there loses with hesitation or reservation when the market goes against them.

3. Good forex traders have a systematic and organized system for taking profits. When entering a trade a successful forex trader will access the risk in a trade, enter a trade on a systematic risk-reward ratio and exit (without hesitation or reservation) when a profit target is achieved.

Expect the unexpected! Knowing the risk and reward and taking the trades that the market gives you is the best, most consistent way to succeed in the forex market. Trading the forex market is a marathon and not a sprint. You will hit some homeruns, but only if you apply a consistent and systematic approach to your trading.

We all must believe in something. Believe that the market is always correct and when you are wrong the market is not branding you as a failure, merely proving you with feedback to make you an even better trader!

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Happy Trading!