As the old adage goes, “You’ve got to stand for something, or you’ll fall for anything!” So, when it comes to your Forex trading, what do you stand for, what’s “your deal,” and what are your words to trade by?
This is important because your beliefs really form the foundation for your entire methodology, and as we all know, a crummy foundation is a most common precursor for disaster. That’s why your motto, your mantra, or your words to trade by should be solid, sincere, and set in stone.
Think about what really forms the basis for your trading, and raise a red flag if your words to trade by are results-focused, like “Show Me the Money!” or “Do Whatever It Takes to Win!”
Your words to trade by should be all about discipline, focus, and humility, and they should help you keep consistent trading in its proper perspective. If you’ve never thought about this before, now is a great time, and even for those who have words to trade by, it’s helpful to reflect on them like this and stay committed. And that’s what we’ll do here today.
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Often times, to think about what makes your trading tick, think of who taught you—or is currently teaching you—to Forex trade. If you have a mentor, you might think of their manner, their methods, and the ones they’re impressing upon you. Especially at the onset of your trading career, it’s important to grab onto something that’s going to be the basis for your trading…some crucial words to trade by.
Also think about your winning trades, what causes them, and how you feel when you get on a roll like that. That very well may be the pinnacle of your trading, when everything comes together and produces your best results. And, if you can capture that in just a few words, well, those could well be your words to trade by, too!
See also: What Is Your Trading Personality?
Are you most confident and a more proficient trader when trading in the direction of the dominant market trend? If so, then maybe your words to trade by are simple, like the age-old adage, “The Trend Is Your Friend.” You’ll do your best by looking for clear-cut trend trade set-ups, trade the best ones, and perhaps start ignoring those countertrend ones. Remember, “Do more of what you’re good at, and less of what you’re not,” which just so happen to be some excellent words to trade by as well!
Traders who go in feeling entitled are often end up as losing traders. At all times, and throughout all stages of your career, never trade based on emotion, and be humble. Respect the fact that traders can’t control outcomes or the direction of the market. And, win, lose or break even, just be glad and grateful to be there and still be able to pursue your dreams as a trader, because 9 out of 10 who start trading, unfortunately, won’t be able to continue pursuing theirs.
When it comes to trade selection, there are quite possibly no better words to trade by than those. Never commit even a drop of hard-earned capital to trading sub-par set and forget set-ups, and instead, ensure that each set-up you trade matches every one of your technical analysis and/or fundamental qualifications, has risk reward ratio that’s squarely on your side, and is a set-up with which you’re familiar and duly capable of trading. And if not, then don’t trade it, period.
Amidst the swirl of fast-moving markets, the endless flow of news and information, and the roller coaster of our own emotions, trading can be tough on all of us…but that’s not why we do it, remember? Lifestyle trading is about leisure, freedom, and enjoyment, and because you only trade purely speculative capital, no results should ever adversely impact your financial future. Keep trading in its proper perspective, don’t stress about the little things, and remember that in the broader scheme of things, trading is never a life-or-death matter.
Outside the markets, we all have words to live by: “Just Be Yourself,” “Think Before You Act,” or “Tequila Is Never a Smart Decision.” These tenets (well, some of them, anyway) may help guide our every day, the choices we make, and the success and level of gratification we feel in the process. And, because trading often imitates life, we all need words to trade by, too.
Like a fingerprint, or in the same way everyone’s trading strategy is unique to them, all of our words to trade by can be individualized and very different. The important thing is that we all know what drives our success, have it firmly set as the foundation for all of our trading activities, and that we have an unwavering commitment to keeping it there.
Like a motto or reason for being, your words to trade by will effectively govern every trade-related decision you make, and when done right, it will help keep you on the path to success over the long term.