Why Your Optimism Could be The Downfall To Your Trading Success
If you’re anything like me you will spend time outside of trading visualizing your trading success. You will envision yourself at your trading work-space and picture all the great trades you will take that fit within your trading plan, you will picture your equity curve making steady growth overtime. You will go through your pre-session routine to prepare yourself for trading, you most likely start your trading session with eager anticipation, excited about the potential opportunities the trading day will bring.
You are optimistic, you know the potential rewards that trading can offer from the comfort of your own home. You have researched, back tested and seen all the amazing trades that are possible. This leads to having a bullish mindset and a sense of entitlement to what appears to be easy profits.
Unfortunately, the market will not always match your enthusiasm and deliver you the trading conditions you thrive in. Some days just weren’t made for trading, some days it’s just hard work and every move you make proves to be wrong.
The reality is that trading the markets is slow and steady grind with many ups and downs. The price action will never be exactly the same day-today. Price action will go flat for days or weeks. Your edge during those times will not play out as often. Unexpected news events will come out and whip you out of a position, natural disasters will turn price in an instant.
Prepare for everything
While it is important to have a positive mindset and outlook about your trading business, to become a consistently successful trader you need to be prepared for all possible outcomes not just the positive ones. You need to mentally rehearse for the times when the market is not moving in sync with your trading system and have a plan about what you will do. If you build strong mental foundation for when times are tough then when these situations unfold you will have the ability to understand what is happening and take actions that will protect your capital and allow you to thrive when conditions swing back in your favor.
[Tweet “To be prepared is half the victory. – Miguel de Cervantes “]
Actions to take
- Incorporate into your trading plan what you will do when there is slow market conditions (maybe stop trading or reduce number of trades you can take)
- Visualize yourself making strong powerful decisions when things are not going to plan or conditions are not in your favor
- Picture what you will do when unexpected events happen that cause big price movements
- Visualise yourself making decisions during all types of different market conditions. Find examples of these in the charts and save the images to a folder so you can look over them frequently
To have a balanced mindset you need to have a core understanding and respect that price will do what it wants to do and sometimes that means difficult market conditions. You will have to grind it out, it wont be easy, sometimes this will go on for weeks. Expect this to happen from time to time and enjoy the process and challenge of protecting your capital.
How do you deal with different market conditions, share your thoughts in the comments below.
Pingback: Here’s a post I found interesting from one of the few blogs I read. | fxoutlier
Wow! :P.. I follow your instruction.. I am newbie in forex.Thnaks for share nice article 🙂
Thank you Nazmul, glad you liked it and welcome to the world of Forex 🙂