I’d like to share with you today a story that’s sad, at first, but one with very powerful takeaways, both in life, and in terms of trade psychology. These are lessons learned under the most unfortunate of circumstances, but because they made such a profound impact on me, I feel it right to now pass them on.
You see, while attending the funeral of a dear friend’s father this week, I was witness to a very moving service, during which seemingly all things, from life and love, right down to work, money, and trade psychology were put in their proper perspective.
I was truly touched by much of what was said that day, but perhaps most notably by taking a fresh look at what’s really most important, both in our work, and in all of our lives.
I think there’s an important message there, and for any technical analysis traders who battle their own emotions and expectations, perhaps these lessons will help eliminate trading fears and destructive thinking, impart more focus, and promote more sound trade psychology.
What is trade psychology
How putting it in perspective could make you a better trader
Could you 'win' out of a losing trade?
Indeed, everyone feels the pressure while trading, but think for a moment about what unnecessary pressure you may place upon yourself? Do you aim to pick exact tops and bottoms, squeeze every possible penny from your trades, and act on multiple and/or sub-par trade set-ups, all in hopes of successful trades? In short, are you committing self-sabotage by trying to do too much in your Forex trading?
If so, think about this very profound message, which pertains first to life, but is also very pertinent when it comes to trade psychology:
“The happiest people don’t have everything, but they make the most of everything they have.”
Many new traders are notorious for always wanting more: more profits, more set-ups and trading strategies, and more validation and rewards from trading. But lost in all that is the fact that many of the most successful traders simply carve out their niche—just finding what they do best—and then do it over and over again (such is scalping trading!).
See related: How to Profit More by Doing Less
The message here is to never underestimate the power of simplicity, be it in life, in trading, or both! Happiness doesn’t have to be a moving target, so when it comes to trading and trade psychology, take time to consider whether you truly want lots of hustle and bustle, or if a simplifying your trading and way of life is all the reward you need. If so, then happiness may be much more attainable than you think, if not already very close at hand.
Sometimes, perhaps unfortunately, tragedy helps put things in perspective, and we’ve seen all too much of that of late. From this week’s cowardly terror attack in Paris, to the downed AirAsia flight, and beyond, we’re reminded that life is very fragile, and that the money we stand to make or lose each day in the markets is far less significant in the bigger scheme of things. Sure, making money is the ultimate reason for trading, and in the heat of the moment, it may seem that missed trades and/or losing trades are tragedies in and of themselves, but events like this should make everyone think again!
Let’s be real about trade psychology and the importance of money: Yes, losing money sucks, but while it may be the least-favorable outcome in trading, it’s not the worst thing that can happen in life…not by a long shot!
Think about trade psychology in that light and now ask yourself, “Is one or even a number of losing trades really such a catastrophe?” Probably not, especially when you have consistent risk management in place, and only trade capital you can afford to lose.
Maybe that way of thinking will help alleviate fear and trading biases, not to mention free you up to trade with more clarity and confidence. “It’s just money, after all, and you can’t take it with you when you go.”
You know, trading often imitates life in that some of the hardest lessons can be the most valuable. And, amid some sad circumstances this week, I’ve gained a new and important perspective on a number of things, from family and personal contentment, right down to work, and believe it or not, trade psychology.
These are lessons that I will now hold close to me for some time, and perhaps you’ll find them useful in your trading as well. In the end, we get one chance at life and at becoming the best trader we can be. Now, that’s serious stuff, but it’s not so serious that we can’t stop to enjoy the ride—mistakes and all—and simply cherish the opportunity to live, love, and learn with each day we spend both in and out of the markets.
Remember, trading, like life, is about capitalizing on opportunities, and in both, you never want to let the best ones pass you by!