While native ability plays a big part, real success is also a state of mind. If you have ever seen a basketball player miss that final throw to win the game or watched a golfer choke when they are in the lead with a few holes to play, you will know just how important state of mind is. One of the biggest problems both athletes and traders face is overthinking things when the pressure is on. Traders need to focus on becoming experts with their chosen trading strategies, without trying to second-guess themselves when real money is at stake. This of course is going to result in both wins and losses, but traders are more likely to be successful if they can stay in the zone – in much the same way as a professional athlete does when they are on their game.
Another key similarity is that most successful athletes are specialists. While the occasional talented individual is able to play multiple sports at the highest levels, the vast majority only focus on one. They put all their efforts into mastering the sports they have chosen, rather than becoming distracted by other things. Similarly, forex traders need to practice their chosen trading style and avoid becoming distracted by other ones. There is no such thing as a single successful trading strategy – there are a number of different ways to win in the forex market, but continually switching from one to another is a recipe for disaster.
Professional athletes also focus on the long term. While they try their hardest to win each game, their real goal is to be part of the championship-winning team at the end of the season. They recognize that they are not going to be perfect and will lose from time to time, but they do not let individual failures – or victories – get in the way of where they want to go. If they were to be discouraged by losing, they would be unable to put in the ongoing effort needed to get to the top of their sport. At the same time, if they let winning go to their heads, they will become complacent and take unjustified risks – which can be catastrophic.
Similarly, forex traders need to keep their focus on what it takes to be profitable at the end of the year, rather than getting caught up in the profits or losses that they make in any given day. It takes a lot of mental energy to be profitable in the long term, and there is no use wasting that precious resource on short-term successes or failures – in fact, doing this will change a trader’s trading patterns for the worse.
Editors’ Picks
USD/JPY holds positive ground around 151.50 following Japanese CPI data
The USD/JPY pair holds positive ground for the second consecutive day near 151.45 on Friday during the early Asian trading hours. The cautious approach from the Bank of Japan to keep monetary conditions accommodative exerts some selling pressure on the Japanese Yen.
AUD/USD depreciates on risk aversion amid a stronger US Dollar
AUD/USD extends its losses for the second successive session on Friday. However, market activity is expected to be subdued due to light trading on Good Friday. Meanwhile, the US Dollar strengthens as recent data indicates annualized economic expansion in the United States, driven by consumer spending.
Gold price finishes Thursday’s session set to reach new all-time highs
Gold price rallied during the North American session on Thursday and hit a new all-time high of $2,225 in the mid-North American session. Precious metal prices are trending higher even though US Treasury yields are advancing, underpinning the Greenback.
Top 3 Price Prediction BTC, ETH, XRP: Retail watches from the sidelines with a bias for shorts
Bitcoin is showing strength as markets head into the Easter holidays. As it rises, altcoins are following suit, with Ethereum and Ripple posting almost similar gains. Meanwhile, there remains an unfilled CME Gap, with a lot of liquidity also resting above and below BTC price.
Bears have been standing before a steamroller so far this year
Despite a pushback on rate cuts from Christopher Waller, and what was supposed to be cautious trading sentiment ahead of critical US inflation data released later on Friday, the S&P 500 rose on Thursday, marking its best first-quarter performance in five years.
RECOMMENDED LESSONS
Making money in forex is easy if you know how the bankers trade!
Discover how to make money in forex is easy if you know how the bankers trade!
5 Forex News Events You Need To Know
In the fast moving world of currency markets, it is extremely important for new traders to know the list of important forex news...
Top 10 Chart Patterns Every Trader Should Know
Chart patterns are one of the most effective trading tools for a trader. They are pure price-action, and form on the basis of underlying buying and...
7 Ways to Avoid Forex Scams
The forex industry is recently seeing more and more scams. Here are 7 ways to avoid losing your money in such scams: Forex scams are becoming frequent. Michael Greenberg reports on luxurious expenses, including a submarine bought from the money taken from forex traders. Here’s another report of a forex fraud. So, how can we avoid falling in such forex scams?
What Are the 10 Fatal Mistakes Traders Make
Trading is exciting. Trading is hard. Trading is extremely hard. Some say that it takes more than 10,000 hours to master. Others believe that trading is the way to quick riches. They might be both wrong. What is important to know that no matter how experienced you are, mistakes will be part of the trading process.