emotions are what drives us humans to reach any goal of our desire. But they can also easily become an obstacle. You all learned by now, regardless of level of your trading experience, that emotions are key factor of your Forex experience.
Traders at some point ask themselves this: How do I tame these emotions? To answer this question, let’s first ask ourselves another question: What is your main goal in the Forex market?
Is it making money and becoming rich? Is it a side job? Or pure pleasure of learning something new and passionate?
There is not a wrong answer to this question but your vision and thrust is what will become the underpinning for handling your emotions.
Regardless of your answer, trading psychology is the key foundation for becoming a consistent and successful trader in the financial markets.
Step 1: Work on creating your vision
Where do you see yourself in few years from now? Who do you want to become? How strong and motivating is your vision? These questions are even more powerful then of Why you are trading?.
If you create your image and vision of who you want to become, and work over and over again, day after day, to fulfill your creation, you will become unstoppable!
Motivation is what gets you started, habit is what keeps you going.
Let’s now translate that vision into the world of Forex.
Focus on one method! You can focus on any method that you choose. However, focusing on one method, especially for new traders, is key to setting yourself up for success.
You might know by now whether you like faster and shorter trades or you prefer calmer intra week setups. There are infinitive number of ways and methods to trade the market but most common mistake of rookie traders is that they give up too soon (under one month) … they are known for switching to new method too soon.
This doesn’t mean that you are limited to trade one strategy for the rest of your life. Rather, the point is to master one method first before adding more to your trading plan.
Step 2: Develop your daily routine
Importance of this key step is to build and develop your confidence, discipline, and winning mindset.
Set your trading time, for example from 9 am to 5 pm and don’t check your trades after that. There is no need for checking because you have a SL and TP in place. Never, ever sleep with your mobile phone by your head and check your trade in the middle of the night.
Eat healthy, exercise and shift your focus to other things in life when you are out of your trading time.
By doing all that, you will in time make bulletproof mindset with which you will become much more emotional stable which is a key factor of your goal of becoming a professional Forex trader.
Now that you built your Winning Psychology, you must be aware of another fact about Forex market.
Many people think that there is something special about successful traders, that they possess something what they personally don’t have.
While this can be true in some cases, 99% of the rest of the time it’s absolutely false and misleading. Winning traders have learned to follow a disciplined plan that has given them the conviction to stick to it no matter what the markets or anyone else says or does.
Step 3: Become Process oriented and not Outcome oriented
This step will finish the circle of your vision. With this key step, you will find enjoyment and pleasure by learning and exploring the market and you will avoid frustration when things are momentarily not going your way. So, focus on what you CAN control, rather than on what you can’t.
Fear and greed are what mainly dominate the markets.
Fear has the ability to immobilize many traders. What should be done is to manage your trade accordingly to your pre-trade plan.
Keep in mind that most people want to be right and that they don’t want to admit that they were wrong. So, they exit their position at far worse position. That’s why it’s of outmost importance to never move your SL (unless you are reducing the risk on the setup).
Greed can turn your winning trade into zero profit or even worse, turn finally against you. Therefore, if your trade hasn’t reached your take profit position, always consider where would be your next and smaller profit taking.
Detaching yourself from outcomes and learning to focus on the process… process… process of flawless execution of your daily routine and working on your vision. This will make executing your trading plan and risk management easy.
If you are focusing on money you are missing the point. Money is the end result of flawlessly executing your “edge” or trading strategy over time.
We can’t control what the market is going to do, no matter how certain you might be of a setup… The fact remains that the market can always go into the other direction. So, to focus your trading psychology on winning and losing, being right or wrong, is a recipe for becoming a losing trader.
Winning traders have developed consistency, and they have done that because their trading psychology is about risk management, probability and focusing on the trading process.
So, to summarize: be positive, be adaptive to change, be calm in your losing trades but pleased in your winnings. Focus on your vision, master your technique and never stop believing in yourself!
In my case, I lost numerous accounts in first year of his trading experience. Now I’am living my vision. What has changed?
I changed. I stopped chasing ultimate goal and started enjoying each trading day. The process, the trading day… that started to be my vision – not the goal. It sounds so very simple, but finding your path takes time, at least it was for me.