How Successful Traders Reduce Gambling Tendencies when Trading

Gambling tendencies describe the habit of treating forex as a game of chance (relying more on luck or how you feel) rather than sound analysis and strategy.

It usually results in failure and stagnation.

Let’s discuss what profitable traders do to minimize it and achieve more success:

1. They focus on a few market niche

Some pro traders are of the opinion that trading many currency pairs simultaneously can be overwhelming, leading to confusion and increased gambling tendencies.

They recommend that you concentrate on just one or two markets (especially if you’re a beginner). This would allow you gain a deeper understanding of market dynamics (factors that influence price movements), gain confidence and make more informed decisions based on your technical/fundamental analysis.

Also, it would help you develop a suitable and productive strategy for your chosen asset class.

2. Study and backtest periodically to understand the market better, and update or authenticate their strategy

Professional speculators do not jump into trades because they have a hunch, “a feeling” or because their friends are doing so.

They prepare and know which trade to enter, where to enter, when and why. These guys test and verify every theory and strategy before implementation.

A successful trader may spend hours examining a chart to spot high probability entries, identify trends and patterns before engaging a live market.

He is never in a hurry. He backtests and authenticates every signal.

3. Set clear long-term goals, risk management rules and follow through

Pro traders are patient with the process of growth. They build their profit slowly and steadily.

They are open-minded, and think in probabilities. These individuals know the market will not always favour them, so they realistically plan for the good and the bad.

They know exactly what they want before entering any trade; how much they want to win and willing to lose. (And they stick to the plan).

This approach sustains and protects them from unexpected drawdowns and blowouts.

4. View loss as a part of the game, and keep records

Successful traders track and examine their past trading performance. This helps them identify their strengths and weaknesses.

They embrace the fact that they can’t be profitable everyday, but at the same time use some lost trades to spot and fix issues in their trading strategy.

Every mistake made is an opportunity to improve.

They don’t stop learning.

In conclusion, pro traders do not approach trading as a get-rich-quick venture, but as a business. Just like to build any sustainable business, they invest time and effort into developing a solid foundation.