Professional forex trading and professional sports may seem like they are worlds apart, but there are lots of similarities that forex traders can learn from if they pay attention. To start with, while every forex trader has the goal of becoming a profitable professional, the unfortunate fact is that most don’t succeed. Similarly, for every major-league player, there are hundreds – or even thousands – of university and high school athletes who don’t make the grade. What sets apart elite traders and world-class athletes from the rest?
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.
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
EUR/USD holds firm above 1.1900 as US NFP looms
EUR/USD holds its upbeat momentum above 1.1900 in the European trading hours on Wednesday, helped by a broadly weaker US Dollar. Markets could turn cautious later in the day as the delayed US employment report for January will takes center stage.
GBP/USD remains above nine-day EMA near 1.3650
GBP/USD recovers its recent losses from the previous session, trading around 1.3680 during the European hours on Wednesday. The technical analysis of the daily chart indicates a sustained bullish bias, as the pair trades within an ascending channel pattern.
USD/JPY remains heavy around 153.00 on firmer Japanese Yen
USD/JPY is sustaining its three-day rout at around 153.00 in the European session on Wednesday, awaiting the closely-watched US NFP report. Rising bets on Fed rate cuts keep the US Dollar depressed. In contrast, expectations that PM Takaichi's policies will boost the economy and allow the BoJ to stick to its hawkish stance bolster the Japanese Yen, weighing on the pair amid intervention fears.
Editors’ Picks
EUR/USD holds firm above 1.1900 as US NFP looms
EUR/USD holds its upbeat momentum above 1.1900 in the European trading hours on Wednesday, helped by a broadly weaker US Dollar. Markets could turn cautious later in the day as the delayed US employment report for January will takes center stage.
USD/JPY remains heavy around 153.00 on firmer Japanese Yen
USD/JPY is sustaining its three-day rout at around 153.00 in the European session on Wednesday, awaiting the closely-watched US NFP report. Rising bets on Fed rate cuts keep the US Dollar depressed. In contrast, expectations that PM Takaichi's policies will boost the economy and allow the BoJ to stick to its hawkish stance bolster the Japanese Yen, weighing on the pair amid intervention fears.
Gold sticks to gains near $5,050 as focus shifts to US NFP
Gold holds moderate gains near the $5,050 level in the European session on Wednesday, reversing a part of the previous day's modest losses amid dovish US Federal Reserve-inspired US Dollar weakness. This, in turn, is seen as a key factor acting as a tailwind for the non-yielding yellow metal ahead of the critical US NFP release.
US Nonfarm Payrolls expected to show modest job gains in January
The United States Bureau of Labor Statistics will release the delayed Nonfarm Payrolls data for January on Wednesday at 13:30 GMT. Investors expect NFP to rise by 70K following the 50K increase recorded in December.
S&P 500 at 7,000 is a valuation test, not a liquidity problem
The rebound from last week’s drawdown never quite shook the sense that it was being supported by borrowed conviction. The S&P 500 once again tested near the 7,000 level (6,986 as the high watermark) and failed, despite a macro backdrop that would normally be interpreted as supportive of risk.
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