There always seem to be a mad rush amongst Forex traders to find out a single magic bullet or a golden key that (according to them) would double up as the solution to all of their Forex trading problems. And then they could not be blamed as well, because the markets are choc-a-block with people selling and peddling all sorts of magic wands like indicator info, tutorials, inside news reports and so on. Each new day sees a new stuff being peddled to Forex traders and the rush to acquire them begins all over again.
I know that it does sound a bit hard to digest, but there are so many instances in life when the best that you could do at that point is to do nothing. If you ask me, the most pervasive blunder that majority of the Forex traders are involved in is to go overboard in terms of action and in the process create obstacles to their own Forex trading success.
I suggest that you spend some time in analyzing your past trades where you lost money. When I say losses, I am definitely not saying about the usual kind of losses but those losses that made you tear your hair apart because you felt that you could have avoided them. These losses in all probability have been due to some kind of unwarranted “action” on your part, maybe you jumped the gun and tried to trade even when it was against your trading plan.
If you really are being straightforward here, then you will realize that you have lost a lot more of your money because of over-trading or getting too emotional with your trades and attempting to ‘micromanage’ them?
Stop Draining Away Your Success
If you actually are desperately trying to find ways in which to make money, then I think you need to first seal and bar all those leaking points and stop doing each one of those things that are draining away your chances of making a profit. The reason your Forex trading may not be lucrative at this point in your Forex trading career may be that you are basically doing too much.
Traders time and again hunt all around for some ‘magic key’ to profitable Forex trading and in the process forget to see the real problem, which in reality is their over-action.
The real ‘key’ to trading success, is not over-action, but inaction. Inaction at the right time can in fact be more profitable and lucrative than over-action at the wrong time.
Testing the Truth of the Matter
Here’s what you need to do. Next trade that you are planning to take is the battle-ground. You will only set it up and then do nothing with it for one week. Set the trade entry, stop loss and target and hold yourself from looking at the charts again for a week.
If you do this, and truly do it without cheating, you will perhaps be shocked at the result. You will either have success in reaching your profit target, or will got stopped out for a pre-planned amount of money that you were comfortable with losing, or the trade might still be open.
The most important fact about any of these three circumstances is that the maximum you can lose is your 1r predetermined risk amount in a 7 day period. On the other hand, the positive aspect is much superior at hopefully a 2r profit or greater.
Now is the real difficult part of the test. Try to do some deep self-analysis, and just mull over the number of trades that you would have got involved in if you were not restrained in this manner. I am sure that you will say “too many” and that will certainly be an honest real answer. It goes without saying that the number of emotions and stressful situations associated with those “too many” trades will also be too many.
I strongly suggest that you indeed go through this little self-analytical experiment and do it perfectly and you will pick up something. If you cannot exercise self-control and maintain inaction for 7 days, you possibly don’t have what it takes to be a successful trader, so hold onto that thought as well.
Do Not Hinder You Own Success
For any of your successful trading strategies to work, you ought to give it time and opportunity to play out in the market, which in reality means doing nothing most of the time and just exercising self-control. Let the market do the ‘work’ and you go do something else, or nothing. Over-indulgence with your trades is only going to hinder your own success and result in losing more of your hard-earned money.
In case you still are finding it difficult to restrain yourself from over-action, then you can consider your losing trades as cost of doing business and the winning trades as your revenue. So, just as you cannot avoid incurring costs in doing business, similarly you cannot avoid losing trades. This kind of thought process will help in self-control whenever your fingers start itching to do something out of the plan of action.