Bob was sitting in a recliner overlooking the beautiful azure blue waters of the Mediterranean Sea from his hotel room veranda. The sky was a deep turquoise with a few billowy white cumulus clouds floating by as a huge golden sun drenched the ocean side with bright, warm rays. “All is well” he thought to himself. He watched as his wife played in the sand with their three children.
Everything did seem to be perfect until a few moments later the laptop that was perched on his legs flashed a screen of red candles just before he got stopped out. He had opened a Forex trade on the EUR/USD to go long and it had failed. This was the third time today! Then Bob cursed and all but threw his computer off his thighs. What a few moments ago was a great feeling of comfort and contentedness had now turned to emotional turnmoil. He felt disgusted, dejected, angry and frustrated. His stress levels had definitly peaked in those few moments and he knew why. He had gone on vacation with his family to get away from stress and enjoy some much deserved down time; but Bob had made the mistake of taking his computer to trade. You might be thinking as Bob did that doing some trading in an idyllic setting would be wonderful fun. I mean what could be better than calculating supply and demand zones while soaking up some rays on a white sandy beach? Actually, everything could go wrong.
When trading it is critical to maintain a focus on what-matters-most. Also, it is important to trade with a routine to ensure that you have consistent behavior as you trade. Consistent behavior helps you to stay on purpose and on task in order to decrease mistakes. You know… preparation, analysis, planning, execution and debriefing afterwards as you aim to explicitly follow all of your rules while maitaining both mechanical and internal data strategies. However, routines are not enough. It is also crucial that you are trading in an evironment that is deliberately designed to support your ability to maintain your focus and your emotional stability. You see, trading is difficult to begin with, so you want to provide yourself with every edge available. When you go out of your normal trading environment you are decreasing your edge. It is not only important to have consistency in what you do, it is important to have consistency in your environment. Your trading office not only has what you need and want for your trading, it also has been reinforced with the familiar which has become part of your trading habit. As you focus on building your skills in each and every trade and forming good habits, doing it in the same environment supports this habit formation.
Speaking of skill building, let’s briefly review the equation for it. P + ER + FL + H = Skill Building. P stands for protocol. A protocol is a series of sequentially ordered steps toward an aim or goal. Protocols include strategies, procedures, set-ups and rules which have to do with both mechanical data (everything that has to do with the mechanics of the trade – news, indicators, entries, targets, exits, etc.) and internal data (thoughts, emotions and behaviors). Added to your protocols are effective routines, the ER where you are prioritizing what you need to do to follow-through with the protocols. The routines are a way to get that behavioral consistency referenced in the above. Add to that your FL feedback loop where you are measuring, verifying and documenting whether or not the protocols and routines are providing you with the hit rate anticipated. Trading always provides as does life, feedback, but it only works if you pay attention and track it. As you document what’s working and not you will begin to identify patterns that aren’t working in order to address them. Then you add the H habituation; that is, doing the same thing over and over again until you have created a pattern (habit) that works for you. If you follow this formula you will continue to build your skill levels. Skill Building is one of the few things that you’ll want to always do.
Now, getting back to why you don’t want to take your trading on vacation, even though it may seem like fun and you just don’t want to take a break. Vacations are opportunities to take that well deserved down time. Stress levels have risen to the boiling point and taking time to de-stress is not only supportive to your trading it is crucial for your health. Additionally, when you take yourself out of your normal trading environment you immediately begin to increase your susceptibility to distraction, and the more distracted you are the more you are setting yourself up for doing something that is not in your best interest. If this is the case you are compromising your ability to skill build. In other words, even though you are at a nice hotel on the beach, if you are trading the stress levels are likely to rise and your focus deteriorate as did Bob’s. You must aim to always maintain your A-Game while in the trader trenches as you continue to hone your skills.
So, only trade in your deliberately designed trading environment. When you go on vacation, go on “vacation” and leave the trading computer at the trading office.
Online Trading Academy offers online and on-location courses to help you to master your mental game. Ask your OTA representative for more information. Also, get my book, “From Pain to Profit: Secrets of the Peak Performance Trader.”
Note: All information on this page is subject to change. The use of this website constitutes acceptance of our user agreement. Please read our privacy policy and legal disclaimer. Opinions expressed at FXstreet.com are those of the individual authors and do not necessarily represent the opinion of FXstreet.com or its management. Risk Disclosure: Trading foreign exchange on margin carries a high level of risk, and may not be suitable for all investors. The high degree of leverage can work against you as well as for you. Before deciding to invest in foreign exchange you should carefully consider your investment objectives, level of experience, and risk appetite. The possibility exists that you could sustain a loss of some or all of your initial investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with foreign exchange trading, and seek advice from an independent financial advisor if you have any doubts.
Editors’ Picks
EUR/USD trades weak below 1.0800 amid Good Friday lull, ahead of US PCE
EUR/USD continues its downward trend for the fourth consecutive day, driven by a stronger US Dollar influenced by the hawkish market sentiment surrounding the Federal Reserve and expectations of prolonged higher interest rates.
GBP/USD: The first downside target is seen at the 1.2600–1.2605 zone
GBP/USD trades on a weaker note around 1.2620 during the early European session on Friday. The decline of Pound Sterling is backed by the growing speculation that the Bank of England will begin the rate-cut cycle this year.
Gold ends Q1 2024 at record highs, what’s next?
Gold is sitting at an all-time high of $2,236, lacking a trading impetus amid holiday-thinned conditions on Good Friday. Most major world markets, including the United States are closed in observance of Holy Friday, leaving volatility around Gold price highly subdued.
Ripple's move above this key level could trigger nearly 50% rally for XRP
Ripple price has overcome a critical resistance level and flipped into a support floor on the weekly time frame. This development happened while XRP tightly consolidated for roughly 250 days.
US core PCE inflation set to ease in February on month as Federal Reserve rate cut bets for June mount
The core Personal Consumption Expenditures Price Index is set to rise 0.3% MoM and 2.8% YoY in February. The revised Summary of Projections showed that policymakers upwardly revised end-2024 core PCE forecast to 2.6% from 2.4%.
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