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Wednesday, April 30, 2014

The Blatant Realities of Trading – Part 1

“You’re battling your fear, your greed, your hope. All those human emotions are your challenge.”

Forex trading is as rewarding as it’s challenging. For those who’ve mastered the art of trading, it’s an unlimited ATM machine. However, certain conditions must be met before the ATM machine can be unlocked. According to one writer, you don’t need to build your muscle at a gym or go for a fancy university degree in order to face the challenge successfully.

What do you think successful people do in other areas of human endeavors? They give all it takes to achieve their goals, and they don’t give up in the face of failures, hopelessness, hurdles and disappointments.  They believe in themselves and their dreams even when others jeer at them and think they’re bound to fail.

They also take responsibilities for any breakthrough or flops along the way – they don’t blame others for their flops. These kind of people just keep on working towards their goals, irrespective of the hindrances along the way. Can you see that these facts can be applied to trading?

Traders who want to achieve success must admit that they need to stop their negative orders from being open, especially at a predetermined exit; whether or not the market would ever reach their entry levels again. One who honors their stops may sometimes look like a fool, but one needs to admit that one doesn’t know the future and close negative orders when it’s clear that things aren’t going in one’s favor.

It doesn’t matter if the market reverses and starts going in your direction after you cut your loss. Those ‘wise’ speculators who often fail to honor their stops may look smart sometimes, but it’s guaranteed that their career would be short-lived.

Regardless the outcome of your last orders, whether positive or negative, you must admit that you need to place new orders when your entry criteria are met, without being 100% sure whether the outcome of the new orders would be positive or negative. An order you’re skeptical about may win or lose, while the one you’re confident about may win or lose. What matters most here is that you open new orders flawlessly according to your plan, regardless of the results. You must make new orders to make more money or attempt to recover some recent loss, no matter what the outcome would be. In the long run, positive expectancy will bring the odds to your favor.

Conclusion: What it takes to be a successful trader is easier said than done. But doing it is what would indicate what your eventual fate in the markets will be. This is the disparity between success and failure. The principles that bring lasting trading success are easy to preach but very difficult to follow, and that’s why a very small percentage attain lasting success in the markets. The lasting success is within your reach only if you could develop a mindset that accepts the realities of trading and bring your trading approaches in harmony with them. Your key to success lies in your ability to do what most other people find difficult to do. The 2nd part in this series would reveal the exact trading approaches that can improve your experience.

The quote at the beginning of this article is from Peter Brandt. Another quote from him ends this article.

“Consistent performance isn’t necessarily based on the dollars you make, but on the things you need to do to perform – repeating and repeating what you think are your best practices. The goal is to be a consistent performer and then let the money take care of itself.”



Eye-opening trading lessons: Lessons from Expert Traders

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