Forex Trading - The Trader's Mindset

If you want to become a Forex Trader, choose one of these mindsets.

The Independent trader or the Dependent trader

Which type of trader you are will dramatically affect the potential money you can make in the markets. In fact, it could well determine what the rest of your life will look like, whether it is how long you work for someone else, when and where you vacation, or where and how you live.

You may think that's an exaggeration, but the reality is those who take initiative can positively affect the outcome of their lives (and their trading) as opposed to those who let others determine the course of their lives for them.

It is important to note that anything requiring little to no effort will produce limited, temporary or no results. Conversely, anything requiring you to think and act for yourself will produce lasting and permanent results.

Trading, whether Forex, stocks, or other markets, especially proves this true. Returning to the two types of traders, they illustrate very common mindsets -- which one represents you?

The Dependent trader is looking for the easy way, wants to make a quick buck, or strike it rich -- but never wants to put any effort into the process of accomplishing such things (if such things even exist, and it should be argued that they do not).

Dependent traders will follow the crowd, trade based on hot tips, seek out automated 'millionaire-making' trading programs, listen to all the news experts and blindly place 'can't lose' trades (which do lose), all with no plan, no thought and no understanding of what they're doing.

Naturally they'll become frustrated with their losses and failures and do the only thing they can think to do: they give up.

Dependent traders are the trading equivalent of lottery ticket buyers; they know full well the odds stacked against them, but they believe anybody can get lucky, so why not them?

Needless to say, Dependent traders exert little control over their lives and have little chance for financial success.

On the other end of the spectrum is the Independent trader. This trader wants to have control over their financial future and has learned (or will learn) how the markets work, which approaches to trading the markets really work, and how to empower themselves to trade without relying on others for advice or tips or news.

An Independent trader understands and believes that only they can maximize their odds for success and only they can achieve their financial and life dreams. They will seek out and learn from others, educate themselves, learn from failure and strive to accomplish greater things.

It should be noted, however, that everyone has a little bit of the Dependent trader in them at some point. The difference being, the person on track to become Independent may take up with a mentor or lean on a reliable education source at the outset - but as their knowledge grows, the Independent trader will begin to apply what they've learned completely on their own.

The Dependent trader never will.

Three simple steps to becoming an Independent Trader:

Step One: Create and execute a trading plan. Whether you want to day trade or trade at the end of hte day, or once a week -- decide what fits BEST in your daily schedule and then determine what sources form #2 and #3 below best align with your plan. Don't try to apply day trading methodologies to end of day trading and vice versa, as you'll likely discover they don't and won't work.

Step Two: Seek out 2-3 reputable education sources. We will provide some to you - but the goal is to identify one that you can understand and trust. Learn everything you can from those sources. Then, learn to apply it on your own.

Step Three: Learn from and test out multiple methods for trading. You are unlikely to succeed wihtout some basis in trading methodologies, especially when utilizing technical or fundamental indicators.

The steps above will require time and money investment.You should consider them your trading education costs -- it is far better to invest in yourself than to lose money too easily in the market.

by Eugene Ng -

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