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An Indisputable Key To Forex Success
The trading journey is one fraught with dangers and perils at every turn. Most people are drawn to trading due to the possibility of making huge amounts of money in relatively short amounts of time. However, most people quickly have a face-to-face encounter with trading reality and discover that this stuff is hard. It’s not as easy as getting a 20 pips per day and turning $10k into $1 million in a year. However, the truth is that with extreme discipline and a willingness to learn, one can become a successful trader. In this article, we will discuss one of the greatest keys to trading success.
The reality is that a trader cannot control what the market will do. This single realization is enough to be serve as a major turning point in the journey for many forex traders. You have absolutely no ability to control the market or direct it. Thus, when you put a trade on, the market is going to do exactly what it wants to do. Realizing this truth, and internalizing it, should help a trader come into a new level of emotional freedom concerning trade management. The reality is that once you put a trade on, essentially your part in the equation is done. You should have your target predefined before entry. Once you submit your order, it’s going to either hit your stop loss or your take profit. Your ability to do anything is over. Sure, you can manage the trade, and that is very important, but the outcome of the trade is mostly at the whim of the market. Your ability to control anything is over. The extent of your control drops significantly as soon as you submit a trade order. You cannot control the output of a trade. What you can control—is the input. This understanding is essential to trading success.
Thus, the point when you are in control and in power is before you ever enter a trade. It is absolutely essential that you use this power appropriately. Unfortunately, many traders abuse this power and use it flippantly by entering trades on whim with no real plan of execution in place. The reality is that in the trading experience, you cannot control the output of your trades, but you can control the input. If you take care of your end by only inputting good data, then you will dramatically increase your probability of trading success.
Controlling The Input
This refers to your ability to control what trades you take. If you continually put bad data into an equation, you will continually get bad results. Likewise, if you continually take bad trades, you will find your trading account continually declining. You must realize that your power as a trader rests in your ability to place good trades. If you do that, account growth will take care of itself. Once you put a trade on, you have no power over the outcome. If you put on trades that have a high probability of success, you will find your account growing.
Therefore, one of the most important aspects of trading success is planning out your trades. In construction, there is a saying “Measure twice, cut once.”
This refers to cutting a piece of wood. Instead of cutting it and realizing you did it wrong and have to re-cut, the best thing is to measure twice, make sure you have it right, then cut. Then you only have to cut once. This applies to trading. If you really do your prep work and only take the trades that match up perfectly with your trading strategy, then you will significantly increase your chances of trading success over the long-term.
The problem is that most new traders lack the discipline that is required to really take the time to plan out trades. Planning out trades is not exciting. Trading is exciting! And that is why most new traders do not plan out their trades—there is simply nothing exciting about it. Unfortunately, many traders have to go through a stage of losing money before they realize that something is not working.
If you will adopt the mind set of planning out your trades early in your trading career, you will find be able to subvert huge losses and big draw downs in your account. It is cliché, but it is true—trading is a marathon, not a sprint. Therefore, be in for the long haul. Planning our your trades and dedicating yourself to executing your strategy will not make you a millionaire overnight, and it may not even make you a profitable trader overnight. However, it will put you on the right path to trading success, and it will most likely decrease the learning curve. Remember, measure twice and cut once!