Which Traits Make a Successful Funded Trader?
Every funded trader has a different strategy for risk management, timelines, and approaches. That said, all successful traders have some specific characteristics in common.
At The Funded Trader (TFT), we looked at statistics taken from our vast pool of successful traders and picked out some key traits associated with the top achievers. These traders received $10,000 or more in monthly payouts and conducted over 9,000 trades. Beginners in forex trading can use this data to inform their trading style. In particular, exactly what it takes to be the best.
So, let’s find out more about these winning traits and how they can make you the next successful funded trader!
1. Determine the Most Profitable Trading Style
Your first step along the path to funded trader success entails recognizing which trading style suits you best. According to our data, 27% of TFT members prefer scalp trading, where they hold trades for more than 5 minutes. Around 5% are swing traders, who hold trades for more than 8 hours.
Intraday trading, on the other hand, has proven to be the most successful style so far. It is used by 68% of our funded traders. But what exactly does this type of trading involve?
Simply put, intraday trading is just another name for day trading. It means buying and selling currencies on the same trading day. In TFT’s case, our intraday traders usually trade for less than 8 hours.
Benefits of Intraday Trading
Lower Risk
Intraday traders close their positions on the same day, which means they are not exposed to overnight risks. Their profitability remains unaffected by market events and movements that happen during this period. In contrast to swing trading or scalping, it doesn’t expose the trader to execution slippage, gaps, or swap fees.
Quick Profits
Intraday traders capitalize on short-term price movements, which can result in quick profits. In fact, this strategy is known to yield substantial returns—provided you’re consistent and able to make decisions on the fly. In addition, you’ll need to invest time in studying and analyzing charts and patterns.
Hands-on Learning Experience
Intraday trading has a slightly lower risk because traders close their positions early. This way, they aren’t exposed to major market fluctuations. Therefore, it’s a good approach for a new funded trader looking to gain hands-on experience. You can get started with a relatively small amount of capital and use leverage to increase your buying power.
2. Find the Most Profitable Trading Sessions
The FX market is open 24 hours a day on weekdays. That’s because the forex market follows business hours in four different parts of the world—Sydney, Tokyo, London, and New York. These are called trading sessions.
However, this doesn’t mean you’re free to trade at any given time of the day. That’s a tactic that could backfire and quickly deplete your reserves. The secret to avoiding this fate is to identify the trading session that works best for you. Ideally, the session should follow the currency pair that you choose.
So, which trading session do traders find the most profitable? Among our funded trader group, 56% follow the US session, 20% opt for the Asian session, and 24% prefer the London session. Most traders tend to favor either the New York or London sessions, specifically because there’s an overlap between the North American sessions and those in Europe.
Trading Hours of Operation
New York
The NY market trading session starts at 8:00 a.m. EST and ends at 5:00 p.m. EST. It’s one of the largest forex markets in the world and is watched closely by traders. This is because almost all traders pair their currencies against the US dollar. Any movement on the New York Stock Exchange has a cascading effect on the dollar. This includes company mergers, acquisitions, and even political sentiment. With every market shift, the dollar gains or loses value instantly.
Tokyo
The Asian market is always the first to see the effects of market fluctuations. The Tokyo trading session starts at 7:00 p.m. EST and ends at 4 a.m. EST. This session receives the bulk of Asian trading, surpassing Hong Kong and Singapore. The most traded pairs during this session are USD/JPY and GBP/JPY.
Sydney
Sydney’s forex market is open from 4:00 p.m. EST to 2:00 a.m. EST. Although it’s not the biggest market, there’s a lot of initial action when it opens on Sunday afternoon (EST time). Numerous individual traders and financial institutions try to regroup at this time after a brief weekend pause.
London
The London market is open between 3 a.m. EST and noon. It dominates the currency markets of the world, accounting for 43% of the world’s global trade volume. This is because the London trading session overlaps with the Asian and American sessions. The session tends to be characterized by high levels of liquidity—it also sees the most volatility due to the large number of transactions taking place.
The Best and Worst Times to Trade
The best and worst times to trade forex depend on several factors, such as the currency pair you choose, market volatility, and your trading style. However, you can follow some general guidelines to understand which session would work best for you as a funded trader.
Trade During the Overlap of Major Sessions
The most active forex trading hours occur during the overlap of the European/US trading sessions and the Asia/Europe sessions. The market has the highest liquidity during these hours, which presents more trading opportunities.
Avoid Trading the News
Economic news updates, such as interest rate decisions, GDP reports, and employment data, cause significant volatility in the market. As such, it’s difficult to predict price movements during this time.
Consider Your Personal Schedule and Trading Style
Ultimately, the optimal time to trade forex is when you are best able to focus on the market and trade with a clear mind. Some traders prefer the most active and volatile sessions, while others choose to trade during the quieter hours of the day.
Overall, there is no single "best" time to trade forex. Market conditions can vary widely. Pick a trading session that matches your strategy and trading goals.
3. Know When to Stop Trading Before Withdrawal
Another noteworthy trait of a successful funded trader is knowing when to stop trading before a withdrawal. TFT trader statistics indicate that 36% of traders did not trade for 15–30 days before making a withdrawal, while 12% traded until the final day they were still eligible to withdraw. Further, 29% stopped trading for 5–10 days prior to making a withdrawal, and 24% didn’t trade for 10–15 days before withdrawing.
That said, how does a withdrawal affect your trading? Let’s find out.
How Will a Withdrawal Affect your Trading?
Before taking out your money, think for a moment about how the withdrawal will affect your upcoming trade. Will you have enough money to trade if an attractive opportunity appears? In addition, will you be able to continue trading through a rough patch?
In other words, you should withdraw according to your risk tolerance, knowing that it won’t affect your abilities as a funded trader. Another important question to ask yourself is how much you allow yourself to draw down on your losing days.
4. Decide the Number of Trades to Take in a 30-Day Period
Consider how many trades you should make in a 30-day period. Among TFT’s successful traders, 44% make fewer than 15 trades, and 56% make more than 15 trades. It’s generally advisable to make at least one trade per day or every other day.
Determining the ideal number of trades to make over a set timeframe is a very subjective decision. As a new funded trader, you might be confused about how many you should take in a day. The simplest answer is that you need to develop a suitable trading strategy—and stick with it.
Why Strategy Matters
When you formulate a strategy, you’re not only setting your budget but also creating a detailed and comprehensive plan of attack. One that will guide you to trading success.
Because day traders have to trade on a daily basis, their trading frequency varies. Let’s say there’s a trend that could result in a lot of trades. In that case, you might need to trade much more than once a day. Then, on other days, trading might be minimal.
Overall, trading frequency differs from person to person due to a number of variables that influence trading volume. You shouldn’t under-trade—or overtrade either. Under-trading is when you trade less than what your strategy is optimized for, and overtrading is when you trade more than your plan permits.
Become a Successful Funded Trader Today
Trading is a lot like science. You have to constantly test and experiment to develop the strategy that works best for you. The two biggest factors that make a trader successful are patience and persistence. Every trader, even the successful ones, makes mistakes. What sets them apart is the fact that they persistently stick with their strategies over the long term.
True success requires you to constantly learn and adapt. Here, the Funded Trader can provide you with all the resources you need—including access to a community that will help you polish your trading skills.
To become a successful funded trader, join The Funded Trader today.
