Online Trading - Being Comfortable With Being Uncomfortable
Individuals spend years studying, applying themselves to what they learn, walk away with qualifications and enter their chosen career. Success!
Years later, some of these individuals approach online trading with the same mindset. Study well, apply, and success is pretty well guaranteed. Right? Wrong!!
Online trading the Forex market brings one into an environment unlike any other. Normal methods of life regretfully fail to work. Why? Because the market is unlimited and totally uncertain. Price can do anything at anytime.
How does this affect the vast majority of new traders? It leaves them confused. They enter trades with a degree of certainty only to see their hunch, their prediction prove false. What a blow!
Many cannot handle this aspect of trading. Being shown up to be wrong in one's assumptions can be a very uncomfortable experience. The natural tendency is to justify oneself, rationalize, and come up with excuses. All these dangers sound the death knell to new traders. Many give up after a short time after sacrificing their equity to the market.
So if you are contemplating online trading, it will be necessary to sweep away practically all your preconceived ideas of what makes for success in the business world.
A New Mindset Required
Online trading requires a set of mental and emotional skills and disciplines that many find hard to develop. You will repeatedly be wrong in what you think is going to happen in the market place.
If you can accept that and live with that you are well on your way. Each trade is distinct and separate. However, previous trades impact the minds and emotions of new traders. Walking away from a successful trade, the new trader's confidence is high. Another trade is entered in this state of euphoria but regretfully not enough preparation was done and it turns sour.
On the other hand, a new trader licks the wounds from a bad trade, sees another opportunity but the last spanking is still fresh in mind, so the trader hesitates, misses the entry opportunity, only to stand on the sidelines to see the trade turn out well and reach the target anticipated.
Learn To Live In Boxes
Successful traders live in boxes. Each trade is a separate entity in its own box. What happened during the last trade should have no bearing on what you are going to do next.
The successful trader knows a number of trades will be negative during any week or month and learns to live with the discomfort as if it is really nothing at all. In other words, the successful trader has learned to be comfortable with being uncomfortable.
What can help develop this mindset? Good risk management. If your equity is limited and your position represents anything over 2%, you are likely to be anxious. A trade representing less than 2% of your equity is not going to break the bank if it goes wrong. So learn to trade very small positions first so you really don't worry if it doesn't work out.
Having gone through this process for months or even years, the developing trader can then gradually increase the number of positions and position sizes and watch a healthy increase in equity.
So if you are contemplating a career in online trading, pay attention to the above candid observations of seasoned traders. This business is not for everyone, yet anyone can learn it, if they are prepared to condition their mind and emotional makeup to handle discomfort.
Being comfortable with being uncomfortable marks a major step forward in any developing trader's road to success!
Free Forex
Source: http://ezinearticles.com/
Added: March 28, 2008
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Crain's Chicago Business CME Group, Korea Exchange Sign KOSPI 200 FUTURES Electronic Trade ... MarketWatch - Under the proposed agreement, CME Group will match the trades , with the KRX continuing to clear and settle their products. A memorandum of intent was signed ... CME Group falls after analyst sees weaker volume CME trading volume falls 32% in August CME Group volume declines 32 percent in August -