In fact failure (losing trades) is intrinsic to trading. You cannot trade and never lose. It is impossible to be in the controlling seat and there will always be unpredictability. Learning to read charts and how to trade technically is relatively straight-forward. Learning the psychology to deal with the inevitable losses is what separates the winners from the losers. Perceived failure undermines confidence and a failure of confidence undermines motivation. This can lead down two different paths: one where the desire to trade and succeed as a trader dwindles; the other to renewed determination not to give in.
“Our greatest glory is not in never falling, but in rising every time we fall”. This quote by Confucius is wholly relevant to the mindset a trader must develop if they are to succeed; it cannot be overemphasized.
The issue is primarily to do with how we buy into trading in the first place. More often than not we have read or been told that trading is the easy and fast way to making considerable money. In the mind’s eye of the novice, wealth and trading are synonymous. This of course is naïve because the reality is that the vast majority of novice traders fail. Our expectations are set too high. Inevitably trading is not some stand-alone activity that sits outside the normal laws that apply to success. It takes hard work and perseverance. The rewards are certainly there, but they don’t hang like heavy fruits waiting to be plucked by any passer by.
It is important to grasp the reality of learning to trade and not think of it as a ‘get rich quick’ scheme. That will only lead to disappointment. Knowing that losing trades are a part of the process of being a trader, a natural expense, which we accept and learn from is probably the most important early step to take and one that starts to put us into the mindset of the professional – emotion free trading. This allows us to follow our trading plan and apply our trading strategies with consistency and discipline, and rules out emotional reaction to loss. If a trade is entered only when our rules are met and then managed with discipline we have nothing to fear, even if it loses. There is a lot to be gained from reviewing losing trades, a process that all professionals go through.
It is perfectly possible for any of us to learn the skills required to trade successfully. Our main obstacles are ourselves, i.e., how much do we really want it? How much effort are we really prepared to put in?
To understand more we need to be around the professionals, seeing how they trade the market and learning first hand the importance of price action strategies and self-discipline. By doing so we put ourselves on the road to fearing less and understanding more, ultimately the road to success.
Editors’ Picks
AUD/USD stands firm above 0.6500 with markets bracing for Aussie PPI, US inflation
The Aussie Dollar begins Friday’s Asian session on the right foot against the Greenback after posting gains of 0.33% on Thursday. The AUD/USD advance was sponsored by a United States report showing the economy is growing below estimates while inflation picked up. The pair traded at 0.6518.
EUR/USD faces a minor resistance near at 1.0750
EUR/USD quickly left behind Wednesday’s small downtick and resumed its uptrend north of 1.0700 the figure, always on the back of the persistent sell-off in the US Dollar ahead of key PCE data on Friday.
Gold soars as US economic woes and inflation fears grip investors
Gold prices advanced modestly during Thursday’s North American session, gaining more than 0.5% following the release of crucial economic data from the United States. GDP figures for the first quarter of 2024 missed estimates, increasing speculation that the US Fed could lower borrowing costs.
Bitcoin price continues to get rejected from $65K resistance as SEC delays decision on spot BTC ETF options
Bitcoin (BTC) price has markets in disarray, provoking a broader market crash as it slumped to the $62,000 range on Thursday. Meanwhile, reverberations from spot BTC exchange-traded funds (ETFs) continue to influence the market.
US economy: Slower growth with stronger inflation
The dollar strengthened, and stocks fell after statistical data from the US. The focus was on the preliminary estimate of GDP for the first quarter. Annualised quarterly growth came in at just 1.6%, down from the 2.5% and 3.4% previously forecast.
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.