Which experience has a deeper impact on your unconscious?
When you hear the warning "Don't touch the hot stove!"
Or when you actually touch it and feel the excruciating burn?
Once you've burned yourself on a hot stove, you become forever cautious not to repeat it.
In trading, we observe a similar phenomenon. Oh yes, a significant loss in the markets that catches you off guard can be incredibly painful. It has the potential to paralyse your future trading endeavours and bring them to a screeching halt.
Depending on its severity, such a loss can significantly affect your finances, take an immense emotional toll, and even disrupt your family.
This is precisely what happened to the elite traders interviewed in "Market Wizards." We'll delve into their stories in a moment. But first...
When you suffer a devastating loss, you might think to yourself:
"You need deep pockets to endure such hits" and/or.
"Wow! It takes real guts to withstand those blows to your account." and/or.
You may know some other stories too. Agree?
And so you continue to follow the markets, craving the joy of trading. However, you find yourself merely scratching around the edges - never going into the field - due to the paralysing effect of that painful experience.
But it's not about 'guts' at all, not even close
Did you know the best traders, including the absolute elite showcased in the "Market Wizard" series, are fearful?
When asked to explain how he had such a big percentage of winning trades, market wizard Mark Weinstein replied:
"Because I have a real fear of markets... which has forced me to hone my timing with great precision... I also don't lose much on my trades, because I wait for the exact moment."
It often takes experiencing traumatic loss to truly understand - at a deep unconscious level - the dangers of trading.
Before that, all you think about is how much money you can make, right?
In contrast, professional traders prioritise one thing above all else: how to avoid getting hurt.
And this isn't just about using stop-loss orders. Stop-loss orders only determine the amount you lose. They won't prevent you from experiencing repeated losses until you find yourself staring at a depleted account, accompanied by frustration and pain. Correct?
Instead, I'm referring to trading in a way that safeguards you. It requires specialised knowledge. And it also involves repetition to build trust in its reliability and efficacy. Make sense?
You regularly use a stove. It's just you don't touch the hot plate.
Similarly, when you've endured pain and trauma in trading, and you possess the right expertise and trust in that expertise, you naturally believe that sticking to what protects you is crucial because deviating from it will lead to more pain.
There's a way to trade that doesn't take guts or heroics. It's how the best traders operate. But the catalyst for tapping into this approach is enduring trauma and pain.
If you adopt the right approach:
Then you can trade without needing 'guts' to initiate a trade while still maintaining a genuine fear of deviating from what's safe.
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Forex and derivatives trading is a highly competitive and often extremely fast-paced environment. It only rewards individuals who attain the required level of skill and expertise to compete. Past performance is not indicative of future results. There is a substantial risk of loss to unskilled and inexperienced players. The high degree of leverage can work against you as well as for you. Before deciding to trade any such leveraged products 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 trading on margin, and seek advice from an independent
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