How to Get Funded : The Power of Positive Habits for Forex Traders

Paulina Jozwiak
Sep 18, 2023
4 min read

We've often heard the mantra : "It's all about the mindset." But in the intricate world of forex trading, it's more than just having the right attitude. It's about the habits we cultivate and the systems we put in place to drive those habits.

Who Should Read This?

While habits shape every one of us, this piece particularly resonates with those traders who are:

Serious about reaching their trading goals
Keen on on pushing themselves outside of their comfort zone
Are looking to get funded & receive regular payouts / manage personal capital
Eager to build systems supporting their trading aspirations

Habits: The Pillars of Trading Success

Think of habits as the compound interest of self-improvement (inspire by James Clear). Tiny, repeated actions, whether positive or negative, can snowball into significant outcomes. For traders, skipping a routine market analysis or neglecting to their trading plan might seem insignificant in the moment. But compounded over time, these oversights can spell disaster & lack of consistency in positive results.

Luckily, we can steer these habits using the 4 laws of behaviour change:

1. Make it Obvious: Visibility is Key

In the realm of forex trading, being prepared and alert is crucial. To ensure that essential aspects of your trading routine are front and center:

Example: If you're using a specific trading platform or software, place its shortcut on your desktop or pin it to your taskbar. Likewise, if you rely on certain news sites for currency updates, have them bookmarked in an easily accessible folder on your browser.

Tip: Sticky notes can be a trader’s best friend. If there's a specific strategy or reminder you want to focus on for the week, jot it down on a sticky note and place it on your monitor. This constant visual reminder will keep you anchored to your trading strategy.

2. Make it Attractive: Link Rewards and Pleasures

Making a habit attractive is all about the power of association. If you can link a task to something you find pleasurable, you're more likely to stick to it.

Example: If you love a particular type of coffee or tea, make it a ritual to prepare your favourite cup right before you start your trading day. This creates a positive association, making the trading activity itself something to look forward to.

Tip: Engage in a bit of gamification. Set targets, and for every target achieved, give yourself a small treat, be it taking a break, having a snack, or anything else that boosts your mood.

3. Make it Easy: Simplification is the Gateway to Consistency

In trading, the simpler the process, the easier it becomes to follow it consistently.

Example: Create a checklist of things you need to do before executing a trade. This might include checking currency news, looking at specific indicators, or ensuring your trading tools are calibrated. A checklist streamlines your process, ensuring you don't skip crucial steps.

Tip: Use digital tools that can help simplify tasks. Many trading platforms offer features like preset strategies, alerts, or automated trade execution based on set parameters.

4. Make it Immediately Satisfying: Instant Gratification Enhances Continuity

It’s human nature to crave immediate rewards. Incorporating immediate gratification into your trading habits can be a game changer.

Example: After a successful trading day, where despite of the results you stuck to your trading plan, take a moment to bask in that success. This could be as simple as standing up, stretching, and taking a few deep breaths, acknowledging your accomplishments, or scoring yourself from 1 to 10 explaining why it was a succesful trading session.

Tip: Create a reward system for yourself. It doesn't always have to be monetary. For instance, after a week of consistent trading (regardless of the outcome), treat yourself to something you love, be it a movie, a meal, or a day off.

By weaving these strategies into your daily trading routine, you’re ensuring that the habits you form aren't just beneficial, but also sustainable. The goal is not just to trade, but to become a successful trader. And these habits can help shape that identity.

The Kaizen Way: The Magic of 1% Improvements

Derived from the Japanese culture, 'Kaizen' stands for continuous improvement. It's about making tiny, 1% positive changes daily. In the context of trading, it's not about overnight success but gradual refinements that yield significant long-term results.

For instance, reading just one more article, analyzing one more chart pattern, or testing one more strategy daily can drastically improve your trading acumen over a year. When these small increments compound, they can lead to unparalleled mastery in trading.

The Role of Systems in Trading

While goals serve as a beacon, systems are the vehicle that gets you there. Focusing solely on outcomes, like achieving a specific profit margin, can lead to undue stress and short-sightedness. It's the daily systems, the processes, that ensure consistency and growth in trading.

Take inspiration from sports: while the aim is to win, players must focus on the game itself rather than constantly checking the scoreboard. Similarly, traders should immerse themselves in refining their strategies and routines, trusting that the results will follow.

Incorporating Identity Based Habits

Remember, the journey to becoming a successful trader isn't just about outcomes but about forming an identity. It's not about executing a profitable trade but becoming a trader who consistently makes informed decisions.

Old narratives like "I’m terrible with numbers" or "I always make hasty trading decisions" can be debilitating. But by aligning habits with the identity of a proficient trader, you can rewrite your story.

In forex trading, while understanding market dynamics is essential, cultivating positive habits and systems often spells the difference between success and failure. Embrace the Kaizen way, focus on daily improvements, and remember: you don’t rise to the level of your goals; you fall to the level of your systems. Happy trading!