Forex motivation
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In fact, this way of thinking can get you in trouble faster than you can say the word. Because at the end of the day, every time you buy or sell there is someone out there doing the exact opposite. And I would agree with half of that thought. Nor does it make it an everyday occurrence among traders.
So to further his point, begin tracking your successes and failures alike. You may be surprised by what you learn. I just wait until there is money lying in the corner, and all I have to do is go over there and pick it up. I do nothing in the meantime. Patience is the key to trading success. Without it, you will quickly find yourself trading subpar setups and losing money left and right.
Not only that, but there is an opportunity cost that comes with overtrading. It takes a clear mind to be able to identify favorable trade setups, and if you are constantly subjecting yourself to the stress and anxiety of losing trades, you will invariably miss the setups you should be taking.
Why trade – what’s your Motivation?
By staying flat and waiting for the most favorable opportunities , you instantly put yourself in a better position to be able to identify and capitalize on inefficiencies in the market. John Keynes, the father of Keynesian economics , famously stated that markets can stay irrational longer than you can stay solvent. He said this shortly after blowing one of his trading accounts early in his career.
Markets are inherently unreasonable. Never try to justify your position internally. Instead, use what is taking place in the market to decide whether your position is still justified.
If most traders would learn to sit on their hands 50 percent of the time, they would make a lot more money. While the answer will vary depending on the time frame you trade as well as your criteria for what you deem to be favorable; a general answer would be, not very often. And between the two, you should always concern yourself with the risk before even thinking about the profit potential from any one setup.
If a trader is motivated by the money, then it is the wrong reason. A truly successful trader has got to be involved and into the trading, the money is the side issue… The principal motivation is not the trappings of success.
236: Take Your Losses Like a Pro Trader | Forex Trader Motivation
Passion is the only thing that will keep you going when the going gets tough. And trust me when I tell you that the road to becoming a consistently profitable trader is undoubtedly tough! One of the most common questions I receive from traders is how much money one can expect to make in a given month. After all, you have to be able to support your lifestyle if you intend to trade for a living.
As Bill states in the quote above, money should be the byproduct of the thing you love, which is the game of trading. Because unless you absolutely love the financial markets, it will be far too easy to give up at the first sign of difficulty. As traders, we are in the business of reacting. By allowing the market to make the first move , we can play defense while at the same time exploiting market inefficiencies.
Everything else is irrelevant. That means your winning trades totaled 9R while your losers totaled 7R. Win or lose, everybody gets what they want from the market. Some people seem to like to lose, so they win by losing money. Take a moment to let this quote soak in because it does take a few reads to comprehend fully.
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What Ed Seykota is saying here is that some traders are there own worst enemy. In fact, I would argue that this is true for most traders. But the same can be said about life in general. Many individuals lack the confidence, drive, ambition, etc. They create bad habits through emotional discords and often become paralyzed by overthinking situations or doubting their abilities.
Where you want to be is always in control, never wishing, always trading, and always, first and foremost protecting your butt. After a while size means nothing. Everything in trading is relative. This is especially the case in the Forex market where a currency is only as strong or weak as indicated by its counterpart. They are both one percent. The dollar amount is irrelevant. There is an important lesson to be learned here, and it has everything to do with position sizing. Having a small account is no excuse for improper position sizing.
As I always say, forget about making money altogether. Instead, focus on the process of becoming a patient and disciplined trader and the profits will follow. So many traders in the Forex market and beyond are obsessed with making money. And I get it. So before taking your next trade, ask yourself — am I doing my 1 job as a trader by protecting my capital or am I only trying to make money?
Clarity of mind is paramount if you intend to become a successful trader. But the problem is, as traders, we exist in a world fueled by the prospect of financial gain, which in and of itself triggers unwanted emotions. Said differently, know the exact level at which you intend to close your position should the market move against you, but do so beforehand. Once you have money at risk, the line between logical and emotional decision making becomes blurred.
But if you define your plan of attack before putting capital at risk, you are less likely to be swayed by your emotions and thus stand a greater chance of profiting while at the same time protecting your money. When you get out, then you can think clearly again. I have one rule when it comes to taking a loss.
Think about the last time you had a lousy day. Chances are you woke up the next morning feeling much better and ready for a fresh start. And the last thing you want to do is attempt to trade while the negativity from a recent loss is still lingering. It might just save you some money. There is the plain fool, who does the wrong thing at all times everywhere, but there is the Wall Street fool, who thinks he must trade all the time.
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I often preach about the importance of having saint-like patience as a trader. The answer will vary from person to person, but to most of the uninitiated market participants, being a trader means putting on trades. But the truth is quite the opposite. Print it or just keep it on your desktop as a daily reminder. The choice is yours. Click the image below and enter your email to get instant access to the trading quotes infographic PDF. Save my name, email, and website in this browser for the next time I comment.
Once you know the guidelines and understand by experience the game, learning from your emotions, trading the markets is like to want to be a person in an ease alert mode or in an aware mode seeing the opportunities. As a trader, your success or failure is dependent upon your ability to control unwanted emotions. I am really surprised that George Soros was long on the Brexit trade. I expected that traders would wait until there was more of a direction before making a trade.