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 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.
Heck, I’ve got my forex trading experience to thank when I’m able to apply this process easily while making major life decisions!
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.
It’s great to have all the bases covered but this can also be crippling sometimes, as you might feel overwhelmed and wind up not taking any action at all.
3. You can manage your expectations and reactions.
Planning trades and making trading decisions along the way also involves looking at the bigger picture.
Enough forex trading experience allows one to understand why some top-tier reports or central bank announcements don’t generate huge price reactions when expectations have been priced in for quite some time or when markets are operating under a different context.
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 a robots like Robopip and be 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 foreign exchange 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?!”