So you’ve been trading the Forex market for some time, but now you’re sitting at the cross-roads thinking: ‘I’m chasing my tail; Money going out much faster than coming in…
Cycle Of losing in Trading The number of times i thought; ‘I got this, I know what i’m doing’ to, ‘I never want to see a Forex chart again’, was simply put: comical (only now, certainly not then!).
Forerx trading Cycle
I’m a thinker; Lets face it, we’re all a little conscious of what our friends and family think and perceive of us. It’s a good feeling when others take an interest in you and for those who are ignorant, trading the financial markets must make you “insanely clever”… It’s a nice status to wear. Couple all this with the ambition to make money and you’ve got an overly optimistic attitude with a hint of naivety…
As an analytical person, I’d like to consider my thought process as more of a “step-back” or a “top-down” perspective in life. When I think back to my beginnings in Forex it gets me thinking about other aspiring traders in a general sense. Why do people choose to speculate on the markets, what their backgrounds are, are they business owners, students, looking for a career change, gambling addicts… It gets me thinking about who I am compared to other speculators, where I come from, my first steps and what I experienced relative to others.
THIS alone is what exacerbates your process, makes the learning curve steeper and in-fact costs you more money than you’ll ever fathom.
You’ll lose more money switching strategies mid-losing streak than sticking with the original one. Every time that you dump a strategy after suffering a streak of losses, you’re terminating the higher than normal probability of recovery.
Think about the concept of probabilities. In the context of a trading strategy, over time positive outcomes should come out on top (referring to winning percentage and / or average win size). This is all assuming that you of course have an “edge” in your strategy that’s clearly defined.
Employing a new strategy is in essence resetting the game of probabilities to an unknown and immeasurable point in time. All the while this happens, you as the aspiring trader find it intuitive to isolate reasons for why this is happening and the blame usually falls onto the strategy first. You may also reflect on your own errors or inabilities to stick to a plan, but never the less they’re both forces that eat you alive.
In order to get your trading on track, you first need a resounding level of confidence in what you’re executing (being your strategy). Unless you have confidence, then whether you’ve got the most profitable strategy in the world, you won’t ever be able to make any money.
We’ve got some fantastic mentors in the trade room who are here to help.