If you can't keep your emotions in check when trading, you will lose money. Lots of it. Pipsychology was created to help minimze this from happening to you. The most significant action that you can do to improve trading profits is to work on yourself. Really knowing yourself and how you think can give you an edge that others in the market don't have. My goal is to share practical advice to improving your mental side of trading without boring you to death. Hopefully you can develop the mental edge you need to become the best trader you can be.
Get A Life, Why Don't You
Trading foreign currencies isn’t the easiest business to get involved in, especially for beginners or those with limited trading experience. Your most successful traders undoubtedly have several years combined experience in the Forex and other financial markets. Expert traders and those traders that make a living trading the Forex often advocate that beginners take a methodology similar to students beginning an advanced degree program at any one of the different types of professional schools (e.g. vocational, college or university, graduate school).
My time served in the arena of higher education has confirmed that moving ahead in such a program requires some level of commitment to reading, studying, and maybe even attending a study session related to the given field. To move to the top of that class, however, requires even greater discipline and more time committed to learning the course curriculum. I gained this “knowledge” strictly by not doing than by doing. I left the “doing” up to the “smart” kids in class; I won’t lie. At that time, the level of educational excellence at which those kids were working was higher than what I was willing to work for. And as you can image, the results at year end were justified. The smart kids were still smart kids, and I was, well, not. And I hated them for it. Funny how that works, huh?
Was I right to hate the “smarties”? Sure, why not! They got the good grades! They had the good hair.! They studied hard and long. They gave up evenings and weekends of partying and fun for… the library. They actually read the homework assignments. I mean, what’s not to hate?. They probably attended Harvard or Princeton, and then went on to create a social networking site, which they sold to the highest bidder for billions, only to... let me stop my ranting.
Like school, learning to trade currencies is very similar in the type of commitment required to be successful. The best and the brightest of the Forex world have put in the time and effort, gaining invaluable skill, and becoming seasoned traders. Going into school, medical and law students know what’s required to succeed in the program, so limiting their social lives to better focus on developing their skills becomes a necessity. All efforts are centered on learning about their field, often at the sacrifice of hanging out with peers or living the “normal” life. The life balance is tipped dramatically in favor of work over play.
But is this balance the only way to become a successful Forex trader (or pediatrician, or nuclear engineer, or angio-radiologic technologist), one who is at the top of their game? Would you be mad at me if I said “Yes, it’s the ONLY way!”? One school of thought thinks so.. My thought is that it depends on the level of happiness in your life you want to retain during your educational journey.
Forex trading can be time consuming when you factor in the beginner’s learning curve, strategy creation, demo trading, learning to read, back testing, figuring out how to use your mouse and the list goes on. The more time you spend learning Forex, the more you are exposed to the workings of the Forex market. With time you start to build a good skill set for trading, and your experience grows with every trade. But with time spent learning and trading Forex, time is taken away from something else – your family, your friends, your other job, your toe nails, your dog, your lawn, your social life. My answer – to each his (or her) own. There’s no right or wrong answer here, folks.
Yes, you’re money is on the line (that’s if you’ve taken that big step to trading real money), but that doesn’t necessarily translate into ALL OUT FOREX OPEN 24/7! The most successful traders will tell you that trading isn’t only about that winning trade, but it’s also about what you learn along the way. There’s the mental challenge of trading. There’s the benefit of learning how others make money trading foreign currency. There’s the excitement of learning new investment strategies. It’s the process, man, the process!
You can be dedicated to learning and developing your skills as a trader, but a balance must be struck between your trading and the rest of your life. Stress outside of your trading has a way of finding its way back in. Stay happy. Get a life.
Give me your thoughts in the comments section if you have time. Are you an addict or wish you were (Forex addict, that is)?
