Like it or not, spending considerable time in the forex arena is bound to take over some aspects of your life and that’s not necessarily a bad thing.
How many of these have you experienced?
1. You automatically think of the worst-case scenario.
As forex traders, we’ve gotten used to anticipating potential factors that might invalidate a trade idea.
Before opening positions, we normally look ahead to see if there are any events that could cause the price to move against our expectations so that the proper risk management strategies can be put in place.
It’s not that we’re being pessimistic all the time. It’s just that we’ve repeated the process of thinking about what might possibly go wrong so many times that it can become a habit even in day-to-day situations.
2. You tend to overthink.
When coming up with a setup, traders are encouraged to consider various market scenarios that could influence the trade one way or another.This often involves thinking about what might happen if a report comes in below or above expectations and what kind of trade adjustments need to be made then.
It’s no surprise that we can sometimes get too caught up imagining all the different scenarios that can take place, even if it just involves making a very simple decision.
3. You can manage your expectations and reactions.
Planning trades and making trading decisions along the way also involves looking at the bigger picture. In general, this helps us put things in perspective.
If several factors line up to shape your expectations for a particular event, you normally don’t overreact even while others do. If a surprise comes up, you’re able to take time to rationalize and adjust your biases.
4. You move on rather quickly.
Every forex trader has had his or her share of losses and, while it may be frustrating at first, you eventually learned how to move on from these.Even seasoned traders still undergo losing trades or large drawdowns from time to time, but they’ve grown mentally and emotionally strong enough to – as Taylor Swift would say – just shake it off, shake it off.
Of course, this does not mean that trading can turn us into robots completely devoid of negative emotions. It’s just that several instances of trying to bounce back from a loss and being able to do so have allowed us to be more confident about overcoming minor setbacks in trading and in life.
5. You shake your head when you see the spreads on the FX counters in airports.
Prior to starting your trading career, you probably didn’t pay much attention to currency prices in foreign exchange counters. At best, you might’ve just compared whether it’s cheaper to buy foreign currency in banks or in airports then just handed over your cash without further thought.
But now that you’ve spent a considerable amount of time watching the charts and taking note of where certain pairs are trading at the end of the day or week, you’ve most likely expressed disbelief upon seeing the buy-sell prices in commercial forex counters. “300-pip spread? Are you kidding me?!” SMH.
6. When you recognize a good opportunity, you grab it right away.
Missing good trade opportunities is probably one of the more painful experiences – perhaps even more frustrating than an actual loss – that every trader has gone through. I’m sure you’ve had one or two could’ve-made-my-year trades that you’ve hesitated to take and still regret to this day.
Sooner or later, you realize that you’d be better off focusing this energy into being ready to take the leap when you spot another high-probability setup.This way of thinking can also influence how you make life decisions, as you become more conscious of and aggressive about once-in-a-lifetime opportunities. You’ve already thought about what’s the worst that could happen anyway, right?
7. You think in terms of probabilities.
When planning ahead for potential market situations, you know all too well that you should be focusing on the more probable scenarios.
Do you sometimes find yourself planning your day or week based on what might happen? Do you imagine different scenarios in your head and come up with back-up plans regularly?
If a report comes in as you expected, will you add to your open position and trail your stop? If it misses, will you be ready to cut losses? Of course, you’ve got the stops in place if anything unlikely happens since you’ve been trained to control your risk.
8. You’re not too hard on yourself.
Drawdowns can be difficult to accept sometimes, as traders like you and me are naturally competitive.
Sometimes you blame yourself for not keeping your eyes on the charts the entire time or not reacting quickly enough, but you also know that it’s the nature of the market to have a few surprises up its sleeve.
At the end of the day, you remind yourself that there will be bad days just as there are good days. That’s just the way the cookie crumbles.
9. You’re more conscious of behavioral patterns.
As forex traders, we eat trends and patterns for breakfast. It’s a normal part of our daily routine to check how markets are doing so far and how price reacted in past events. Through these, we spot patterns that allow us to speculate on future price action.Have you found that this has affected your general way of thinking as well? Did you expect someone to come late to a dinner party since he or she has been habitually late anyway? Do you anticipate how a friend might react to something you wanna say?
This doesn’t mean to say that forex trading can turn you a judgmental person but that it can make you more observant of how people usually react and behave under certain circumstances.
10. You’ve learned to trust your gut.
Sometimes you get a very strong feeling that the market will move a certain way but you can’t quite explain why. And sometimes this “gut feeling” is enough to convince you to just take a trade out of instinct and it turns out a winner.
Deliberate practice has probably been key in developing this kind of “trader’s instinct” that tells you to go for it.
You’ve probably experienced this a few times in your day-to-day life and perhaps you’ve ignored it in some instances.
When your gut feel in forex trading has resulted in profitable trades more often than not, you eventually learn to trust and follow this instinctive feeling in general.