Updated from its original posting on 2012-03-30
When you’re risking your own money, do you feel the need to find that secret information that nobody yet knows or find the perfect forex trade setup?
Some traders are so obsessed with trying to find the “perfect trade” that they end up not trading enough to get experience and develop the trader mindset, which in turn decreases the odds of long term profitability.
Trading is not the line of work you want to be in if you’re a perfectionist. You can plan a trade systematically only to end up losing money because an unforeseen event invalidates the trade setup that you thought was sooo perfect, slapping you in the face and asking if you’d like more in the process…that’s the markets!
While you don’t want to become a careless and impulsive currency trader, you don’t want to be an extreme perfectionist either. Remember there’s no such thing as a “perfect setup” or a guaranteed profit.
Instead of being perfect, try being average. For all the “A” students out there, I know this almost sounds blasphemous since I’m basically suggesting you strive for a “C” grade, but hear me out.
Rather than looking for the “perfect” setup, just find a setup with a good probability of success. Yes, you might make less profit per trade (or even lose that trade), but you’ll actually take the risk and give yourself a chance to develop your skills, learn, and make a profit. You may find that you prefer a “less-than-perfect” trade since you’re more relaxed, which tends to be more supportive of high performance than being stressed (which a perfectionist mindset tends to bring).
Trading is all about probabilities. You must make many trades to get the law of averages to work in your favor. As long as the setups are legitimate and you’re using sound money management and risk control to max out profits and cut losses, you’ll make enough trades to come out ahead. You’ll be able to get the losing trades “off your back” and focus on winning trades.
If you’re an uptight perfectionist, you’ll always be on edge and will hardly be able to execute any trades. This will be your downfall because you won’t be able to pull the trigger on forex trades that were “less than perfect” but had a good chance of profitability.
Dare to be average and see what happens. A student who makes straight “A’s” may be smarter but the “C” student sitting behind him may be richer.