By Rob Colville on October 9, 2015 in
Here’s hoping your answer to this isn’t “Just a few minutes ago,” but when was the last time you got angry while forex trading? Now, don’t worry, we’re not about to make you drum up any negative or painful outcomes. Actually, our goal is the exact opposite: To help you let go of them, and prevent similar anguish in the future. How, you wonder?
Well, it’s not by eliminating losing trades, or any of the other outcomes that make you angry to begin with. If that were possible, trading would be easy and everybody would do it. Instead, it’s by reinforcing that all traders take similar lumps, and stressing that acceptance is just as important to your success and longevity in forex trading as the strategy you use, or the currency pair(s) you trade.
Most traders take quite a while to figure that out—and the majority who ultimately fail never do—so make no mistake, changing how you emotionally process these frustrating outcomes would be a very meaningful stepping stone in your forex trading career. Here’s how to get started:
One of the biggest misconceptions in all of forex trading is that every successful trader operates like a machine and entirely free from fear and emotion. Sure, that’s how we’d like it to be, but trades are imperfect, and humans are, too!
Especially when starting out, traders may not be used to accepting that a small loss consistent with their trading strategy is, on some levels, a good thing. It’s an allowable outcome anyway, so remember to let plan compliance, not money, determine your success with each individual trade, and don’t ride the emotional rollercoaster of allowing yourself to only feel as good as the financial results of your last trade!
See related: Trading Goals That Have Nothing to Do with Money
Also, because forex trading is such a solitary activity, it’s often hard to perceive in the moment that all of us, from newbie traders to the most seasoned professionals, face many of the same frustrations…some just handle them more constructively than others!
Some traders find it empowering to learn that they have more in common with the pros than they think, so while account size isn’t one of the shared threads, these common frustrations are:
Being wrong: It’s disappointing when a good set-up goes bad, but with experience, traders learn to accept that as the randomness of the markets, and not a personal attack or failure on their part. Remember that trading a valid set-up according to your plan is never a wrong choice, so whenever you do, feel content that you’ve done your job, whether the trade goes your way or not.
(Occasionally) losing money: No amount of experience ever helps traders embrace losing trades…we all hate them, end of story! Small and occasional losses, however, are simply a part of trading a proven, long-term strategy. Rather than getting angry, be grateful that the loss was small and allowable by your strategy, and then move on in search of the next high-probability set-up.
Whipsaws: There’s nothing more infuriating than when a currency pair moves against you, barely tripping your stop loss before shooting quickly and decisively in the desired direction without you on board. This is a “whipsaw,” a regular catalyst for trader tirades, and it happens to the best of us, even when leaving a little extra space for positions to work out. All you can do is shake these off as best you can, and remember, you’re not alone!
See related: Trading Hang-ups That Bug the Pros, Too
Every method out there for forex trading—even lifestyle trading—will involve some frustrating outcomes from time to time, and actually, I’ve aired out some of mine recently right here. So now, it’s your turn: What about forex trading makes you angry, and more importantly, how might you change your way of thinking to overcome it?
Unfortunately, it’s not as simple as cutting out losing trades if those are what make you angry! In forex trading, sometimes you’ll do everything correctly and your efforts won’t be rewarded. To a certain degree, it’s not about eliminating anger, either, but instead about moving quickly from anger towards acceptance. So think about it the next time you feel your “kettle about to boil,” as they say, for you can control your own actions and subsequent reactions, but you can’t control the markets!