To succeed in the crazy 24/5 world of forex, traders require an innate set of particular psychological skills. Today, the trading experts over at Learn to Trade are looking closer at the lessons the business world can take from the day-to-day activities of the forex trader,
demonstrating the skills transferable from the trading room floor to wider business practices.
Composure is vital
Composure is a fundamental skill for any profitable trader. On the forex market, trades can be influenced by a plethora of external factors. From geopolitical tensions to economic instability, there are various causes of sudden and unpredictable currency valuations – as such, big wins are just as common as large losses.
As a result, the ability to remain composed is key. It can be far too tempting to immediately try to recoup your losses by placing reactionary trades, risking further capital and furthering your chances of additional losses. Contrastingly, remaining emotionally neutral will enable you to stay logical and strategic in your decision-making, ensuring reason isn’t abandoned in times of desperation.
Business owners should also look to emulate this mentality wherever possible. Like it or not, losses are a natural part of business, and knowing how and when to accept them will ensure you stay on track with best business practices moving forward.
Greed can work against you
Business and money go hand in hand, but, while a natural hunger for capital can be a great motivator, it can also work against your best interests.
Once more, the ability to isolate yourself from emotional reasoning is key. A profitable day on the forex market, for example, can leave you feeling overly confident in your own ability, inevitably setting you up to fail as a result. Business owners should be wary of falling into similar traps, straying into unfamiliar territory in pursuit of greater profit to the detriment of their business plan and subsequent stability.
Know when to step away
As evident from the aforementioned points, perhaps the most important psychological skill businesses can look to emulate from the profitable forex trader is self-discipline.
The self-disciplined forex trader knows when to step away from the market. As a 24/5 ‘open all hours’ trading platform, the temptation to keep checking in on market movement and indicators is often strong. Understanding the importance of mental relief, the self-disciplined forex trader refuses to check in on trades outside of allocated time slots, prioritising important family and personal time.
Business owners should look to implement a similar mentality wherever possible. Try and keep your business to business hours, resisting the temptation to load up your emails or check in on website traffic to ensure you’re not forgetting about life’s most important aspects.
There’s a lot the business world can learn from the mind of a forex trader, and implementing these characteristics into your daily business practice will strengthen the likelihood of your venture’s profitability.
John James is a content writer for Learn To Trade, the foreign exchange education and learning specialists – offering a range of training courses to help people understand the currency trading market, as well as its opportunities and risks.