Updated from its original posting on 2013-03-01
With just about any endeavor in life, success doesn’t come easy. There’s no sure-fire way to be successful, but I am pretty sure that no one ever became a success without taking responsibility for their actions.
There are circumstances that happen outside the scope of our control. But how you react to them is not among them. You have control over your emotions, reactions, and decisions.
Most of us overlook this, especially when we trade. Instead of taking responsibility for a bad trade, we blame the forex market, our broker, charts, and sometimes even the cat outside the window. But aren’t we the ones doing our homework and identifying forex market opportunities and risks? Determining our entries and exits? Our position sizing?
Everyone has the same market to trade, so if you’re not doing well while the trader next to you is, you need to accept the fact it’s you and not anyone/anything else holding you back. Forex trading isn’t for irresponsible boys and girls but for disciplined men and women.
So, why do some traders routinely turn to others when their trades go bad? The answer is simple: it’s human nature. Shifting the blame to someone or something else relieves the individual of some psychological pain caused by a mistake or loss. Below are some examples:
Trader Joe: The Follower
Joe takes the same trades as some famous forex trade bloggers. Whenever he loses, he shrugs it off and says that the bloggers’ strategies simply didn’t work out or are faulty. He goes on and looks for other bloggers that might give him winning trade signals.
Trader Jack: The Almost Prophet
Jack regularly blames the market when his trades get stopped out. He thinks that his setups would have worked out if only the economic events turned out as he had expected. You can also hear him curse market players whenever a strong technical support or resistance gets broken.
Trader Sam: The Mechanical Trader
Sam uses EAs and other trading strategies found in forex forums. Like trader Joe, he thinks that all his losses are caused by faulty EAs and fake strategies. After a month of losses, he moves on and looks for other strategies instead of tweaking his current approaches.
What’s common among the traders above is that they all refuse to acknowledge that they were ultimately the ones who took the trades. While there’s nothing wrong with following another trader’s forex setup, losing to a wildcard event, or using EAs, it can be damaging if they refuse to acknowledge their part in pulling the trigger and failing to do something before they lost their trades.
Don’t avoid the pain of responsibility because that kind of pain is good. It lets you know when something is wrong, which will hopefully force you to adjust, adapt and avoid the mistake that caused the pain. The sooner you recognize your responsibility, the sooner you can admit to yourself that you still have work to do.
Put in the work, rely on your own efforts, and draw your own conclusions as to how you want to engage the market. There’s nothing wrong with listening to other people’s forex trading advice, but you–and only you–will make the final decision. Never let someone else make your decisions for you.
So, don’t be afraid of your losses and mistakes–accept, own, and learn from them! Review and reflect on your forex performance through the most important trading task of trade journaling. Through this process, you’ll make your own decisions and accept 100% responsibility for them. Only then will you be on the right track to becoming a good forex trader.