Trading without the right trading mindset is worse than not trading at all. A positive trading mindset is half – maybe even more – of the battle when it comes to finding the right trades to go with. Getting your Forex trading psychology exactly where it needs to be is critical; something that many traders fail to grasp. And that’s why they aren’t doing so well. That’s why they’re giving up. You, however, can learn the right trading mindset, and you, therefore, can win at this thing called trading.
Just as there is no point in trading without the right trading mindset, there is also no point in trading is you aren’t being realistic about your returns, or about how much money you can afford to lose. Don’t imagine that you’re going to be raking in millions within weeks, don’t assume that you’ll win at everything you do and become a full-time trader straight away. Do that, and you’ll over-play your hand. Do that, and you’ll find that reality destroys your positive ideas on trading.
Being realistic means only trading with money that you can afford to lose; disposable capital, in other words. If you don’t have disposable income – money that isn’t going to be used to pay bills, buy food, pay the rent or the mortgage – then stick with demo accounts for now, and only trade for real when you have the cash. If you are worried about a trade that you’ve set, you’re not trading with the right mindset, or you’re not being realistic. Which is it? Trading shouldn’t mean you can’t sleep at night; it never needs to be that dramatic and drastic. Be realistic from the beginning with the right trading mindset and you’ll be a lot more successful (even if you lose sometimes – which you will).
Once you have truly mastered the right trading mindset and you know how much you’re able to trade with, and how to do it, the next step is to pause. Wait. Be patient. Because just being ready to trade – even with the right trading mindset – doesn’t mean that you should. Slow and steady is what wins this race, and that is true every single time. Remember, one good trade has no bearing on how your next trade will turn out. There are no such things as ‘lucky streaks’ (or unlucky streaks, come to that). So the checks and balances that need to be in place before one trade need to be in place before every trade. If the trade isn’t right for you and doesn’t match your chart, then don’t do it – even if you’ve done well on every trade up until that point. Remember: it’s quality over quantity, and trading every day but trading badly and without the right trading mindset won’t give you as good a return as trading well once a week.
In order to get the right trading mindset, you need to work on your trading plan. Never trade without one. That way disaster lies. Pre-planning makes the odds of you winning your trades much better. Don’t trade on a whim. Keeping a trading journal is a great way to do this. Not only will completing it regularly mean that you have to think carefully about your trading and make sure you’re in the right trading mindset, but it also means that you can look back at what has gone before, and look for exactly the right set of circumstances to all but guarantee a successful trade.