“For some traders, it takes many years of disappointment
before they finally become successful. Only those few who never give up tend to
achieve success.” – Joe Ross
The Blue Pill, the Red Pill
In order to be the best trader you can be, you need the red pill,
not the blue pill. What are the meanings of these? The online encyclopedia,
Wikipedia says: “The red pill and its opposite, the blue pill, are pop culture
symbols representing the choice between the blissful ignorance of illusion
(blue) and embracing the sometimes painful truth of reality (red).” The blue
pill is good for lovers of fantasies, but sadly, fantasies and illusions can’t
take you very far in your trading career. If 2 brothers smile after engaging in
a serious discussion, they’ve probably lied to each other. On the other hand,
if the 2 brothers’ faces look plain after a discussion, then they just told
each other the truth. You’re trading Forex because you want to make profits.
This goal is attainable, not with the blue pill – but the red pill. I don’t
want to dampen your joy of discovering Forex, I simply want to tell you the
reality of trading so that you can achieve your aims with the knowledge of the
realities (as many generals of the markets have done). The red pill would
enable you to approach the markets with the correct mindset. It would make you
tough so that you’d be able to triumphantly scale through all the vicissitudes
you’ll encounter as a trader.
The red pills explained here are the 2 most important
reasons why majority of people quit trading before they can have the chance to
conquer the markets. The World Wide Web is full of the articles and videos
explaining why certain traders lose. The most common reasons are: trading without
stops, too big lot sizes, riding losers and cutting winners, no discipline,
unrealistic expectations, going against the trend, etc. The list could go on.
However I want to tell you that, while these reasons are valid, they pale into
insignificance if compared to the 2 red pills mentioned in this article.
Without taking the red pills in this article, any knowledge of other reasons
for failure can’t bring any difference to your trading career.
In order to equip you with the mindset that would enable you
trade with realistic outlook (which is mandatory for long-term success), I’ll
give you the 2 red pills below.
Red pill number one:
DEVELOP A DEEP LOVE
FOR TRADING
Innumerable individuals have made great profits from funds
managers who’re lovers of the markets. Yes, they think these funds managers are
great, but the funds managers aren’t impeccable – not even the best one. These
funds managers speculate according to their trading beliefs and they get
rewarded eventually.
The more inexperienced traders find it challenging to make
consistent profits in Forex, the more they abhor it. A speculator might stare
at his screen and think the business of speculation is so challenging. They
won’t stay in the career long enough to accumulate the necessary experience
that can make them a master trader. Many loathe the intrinsic probability
(positive expectancy) in trading. Being excessively happy during winning
streaks and being excessively angry during losing streaks aren’t part of habits
of wealthy traders. Those who spread lies about trading don’t help the matter
either. Those who were deceived tend become livid when they discover the truth
themselves. That’s why many people abhor trading and quit before they can
master the art of trading. It’s your deep love for trading that can keep you
going when things are not encouraging.
Do you think market wizards use intricate trading
methodologies? Nope! There are factors that are crucial to long-term success in
the markets, and these factors have very little to do with intricate
speculative methods. The best trader in the world has an unbelievably simply
trading method, but since there is no perfect strategy, there is a need for
strict self-control, courage and determination (and most people don’t have
this). Many people lose their heads in the heat of trading and they forget
about discipline. Is it possible for you to breathe in without breathing out at
all? Is it possible for you to continue eating without any subsequent
defecation? Then why would you think you
can only make many profitable trades without any single losing trades? Good
trading results of many years also include periods of roll-downs and breakeven.
So try to nurture
positive thoughts and feelings about trading. It’s imperative that you love
Forex before you can enjoy the benefits it offers. When I was at school, I
simply discovered that I didn’t understand the subjects I hated. I understood
only the subjects I loved, and my experience isn’t unique. How can you expect
to make money from something you loathe? I love Forex because it has unlimited
potential and opportunities for me. All market wizards and successful traders
are lovers of trading.
Red pill number two:
YOU NEED PROTRACTED
PRACTICE TO BECOME A GURU
Trading isn’t the only challenging (but rewarding) career in
the world. There are many difficult careers that people engage in. For example:
defusing nuclear bombs, bungee jumping, space expedition, military careers,
boxing, biochemistry, microelectronics and so on. These careers require many years
of learning, training and practice before you master them. There is no way
around this. Many people acknowledge that it takes time to master competitive
careers: you read books, attend classes, do exams, and engage in rigorous
practice. Yes, there are professionals that have mastered these aforementioned
careers. But when it comes to trading, people usually expect constant magic
results, because there no industry standards that can guide people’s approach
to trading (as the medical industry standards guide people’s approach to
medicine as a career). Some even think trading doesn’t work because they’re yet
to come across a truly successful trader and verify his track records.
D.R. Barton, Jr. includes this question in one of his past
articles: “If your Friend Jumped Off the Empire State Building, Would You?” I
now ask you, would you? Perseverance and persistence are very important to your
trading success. Would you want to become a qualified
pilot/doctor/lawyer/engineer/programmer in a few days? Then why should trading
be different? Consistent success doesn’t come overnight. It takes time for you
to become a competent trader and then go on to become an expert trader. No
matter what others may tell you, consistent profits in the markets would take
time: it requires experience and prolonged practice on the markets. It takes
years, not months or weeks, before you can become a real trading guru (unless
you’re trained by a talented coach who’s also a successful trader). Certain
experts say it would take 4 or 5 years, while certain experts say it can even
take more than that or less than that. Any novice can make profits by luck
during a winning streak, but it takes years of experience to remain victorious
in favorable and unfavorable market conditions. Luck only works for short-term
success; long-term success requires experience and skills. The only short cuts
are: (1) investing with successful
traders and (2) being mentored by a talented trading coach who also has track
records of profitable traders.
Conclusion: Don’t
believe those negative things people say about Forex, it’s because they hate it
and they don’t know how to become consistently profitable. Don’t be discouraged
by them, for they aren’t trading experts. For you to succeed, you must love
trading and you should know that it would take time to master the art of
trading. The reasons why most won’t eventually become expert traders boil down
to these 2 red pills. If you don’t take the pills, you’ll at last, realize that
they’re indispensable. The pills may be bitter in your mouth, but they’ll be
sweet inside you. You need to take them before you can join the ranks of
successful traders. Financial freedom beckons!
This piece is ended with a quote from Dr. Van. K. Tharp:
“And in my experience, it is only the people who are
really committed who will put in the work necessary to become successful.” – Dr. Van. K. Tharp
Azeez Mustapha
Market Analyst, Trading Signals
Provider and Coach
Eye-opening trading lessons: Lessons from Expert Traders
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