Whether you are an experienced forex trader or just a beginner, I am sure you have already come across some generalizations about trading.
But be warned! Some of them may have some truth but these three are nothing but legends.
Here are three of them:
1. “Try a lot and you will soon succeed.”
We probably blame Disney for having this fairytale mentality, believing that whoever watches the market 24/7, takes the most trades, and gives up their entire social life, will be rewarded with a happy ending.
Sorry to burst your bubble, but the forex market doesn’t give cat litter about your efforts.
You don’t have to press the trigger on every setup you see or watch the charts all day to make a living trading forex. Traders should also have a life, you know.
In order to be consistently profitable in forex trading, you need to hone your abilities and develop your skills.
This means working on the things you can control, so stop relying on good karma to reward you with points!
2. “As long as I have the discipline, I am safe.”
Don’t get me wrong, discipline is definitely essential to success in forex trading but there are still factors that can cause your trades to stumble and turn into losses.
You may not have taken the time to practice with a demo first or back-test your forex strategies before going live. Or your trades may be affected by black swan events or other unfortunate market movements that a trader cannot really prepare for.
Either way, it is still possible for traders to get disciplined and lose their trades or even their accounts. It’s all part of the game!
3. The trader’s number one enemy is his emotions.
Traders have been told time and time again to watch their emotions.
Being vulnerable to your emotions can have negative repercussions in trading, as it can skew your focus and decision making.
But think about it for a second. When do you feel very stressed? Is it during those times when you trade badly?
If you answered “Yes!” For the second question, you are an ordinary person.
Emotional stress is a natural consequence of poor trading performance. This happens when traders fail to manage risk properly or when they trade without any objective advantage in the markets.
What then results is a vicious cycle where negative emotions can damage trading performance.
Always remember that trading is a field of performance, where success is the result of a combination of talents and skills. And as with discipline, controlling your emotions is a critical but not the only ingredient to success.
Mastering trading psychology simply determines how consistent you are with the application of your talents and skills, but it cannot replace those factors.