It is the article about traders’ lofty dreams, breaking down on the reality of the financial markets and about the eternal question of “how to make money in forex”
Don’t be scared by the title and the preface, they are just aiming to attract your attention =) I would like to dwell upon HOW MUCH you should be able to do to become a trader.
I’ll also tell you what happens when traders want to train as fast as possible, studying thoroughly one of the aspects, ignoring the rest of them (by the way, it’s also about me).
The article may not be praised by many; the facts, I’m going to present are likely to be rejected, argued to make sure that “everything can’t be like that”. I just ask you to read it till the end and try to understand (you may make yourself a cup of tea/coffee to help yourself) whether there are any contradictions.
I’m not aiming at making the real things seem negative, or getting you to a “prepare yourself for the worst”. Everything, described below, happened to me; it is a kind of a brief description of my own way, as it was.
Later, speaking with other traders, I’ve discovered that everybody went the similar way, as “stupid”, diverse, and inconsistent as mine. So, this article is just a description of what you must be prepared for if you won't go “all the way”.
In addition, you are going to reject and deny the facts, presented below, and it is a norm. My objective is just to let you know the necessary information. It will provide you with some guidance to help you move on at some point.
If you can, try to remember your childhood. You made sandcastles, ran and laughed, played with toys, did something else...And next, remember your school. It wasn’t that fun at school – you had to study, receive good marks, and do your homework, read different textbooks, and so on.
Each of us is likely to know that, in addition to fun, joy, and laughter, there is also sorrow, rage, shame, and other negative emotions. It is human nature to try to avoid “unpleasant things” and seek something pleasant.
You won’t touch the hot iron twice, because it is painful. It is a logical reaction; but difficulties start, as a rule, during the school years.
The notion of “must” emerges at school. Nobody asks you which subjects you like, you must study everything. I mean, first, you are given the task to do “something” you may not like at all.
Next, if you have done that badly, you are punished: you get a bad mark, you are criticized, or even scolded. If you do “this thing” well, you are encouraged: you are praised (sometimes, even in front of your class).
But the point is not that you are praised, rather, it is that you are NOT CRITICIZED, that is you aren’t punished. Doesn’t it remind you about something from ancient times? And what about the circus? =)
Finally, it’s like you start to KNOW IN ADVANCE: if you fail, you’ll be “punished”. And you start criticizing yourself ON YOUR OWN – “I’m bad, I got a bad mark again/failed the exam/didn’t manage to fix the wardrobe”.
On the other hand, if you succeed, you have a pleasant feeling like you are great, you deserve an award. Unfortunately, as we all have been living like that for more than ten years, you are getting used to criticizing yourself.
And also, out of habit, you start striving for “success”, but not for something YOU PERSONALLY WANT; it is rather an OPPOSITE of “failure”. That is, you, in fact, start forcing yourself.
However, if you remember your childhood again, there is one distinguishing feature – when you were a child you did NOT NEED any praise, neither needed you to succeed. You could just be sitting in the sandbox for hours and digging around, or you could be playing catch-up with other children, or splashing in the water.
You didn’t need that an adult would come to say, “Good boy, Sam, you are excellent in digging around, I wish everybody would dig the sand like you...” Am I right? You weren’t aiming at building “the super sand castle” or “the best sandcastle in the sandbox”. You were just sitting and building those sandcastles because you liked it.
I hasten to say, success is a really good thing when you really like what you do and you just want to do it well. Success is not good when you force yourself to seek it, torture yourself, whip yourself, because “you suffer without success”.
Unfortunately, one of the negative features of this striving for success is that we need it SOON, as we are SUFFERING, suffering because Tom, for example, has already bought his third BMW, and I, like a fool, ride a bicycle.
We are suffering because Jack and his wife are on holiday in Spain, but I’m, a loser, not traveling abroad in my forties.
And we are just making ourselves suffer more, criticizing ourselves, burning ourselves inside, forcing ourselves to HURRY UP to become successful sooner. It is like standing on the coals and burning them by yourself, it is natural, that you want to ESCAPE AS SOON AS POSSIBLE.
To somewhere not that hot. But, please, do remember that you once lit that fire by yourself. You are likely to have done it under a pressure, but now, the fire is burning because you have been used to it.
We are all used to forcing ourselves and striving, because, otherwise, we would be punished. It is so, and it is not our fault. Just try to give up this habit step by step. It won’t happen at once, because a ten-year habit doesn’t disappear in a moment. So don’t force yourself to hurry up here as well =)
A distinguishing feature of the “inner anxiety” is that you can’t do something in peace, thoughtfully, without being in a hurry. If you are standing on the burning coals, you don’t think if you have some water or any burn ointment somewhere around you, you just want to go away AS SOON AS POSSIBLE. To remove the pain.
A beginner trader is behaving in the same way, taking up trading: they want success, they NEED success and they are anxious to succeed. Because of this “inner anxiety”, they need that success AS SOON AS POSSIBLE, and so they’ll be looking for quicker ways to succeed, as they have NO TIME to study the subject thoroughly.
That is where everybody gets caught. It is the human tendency to hope for a “lucky chance”: you read about trading, see lots of nonsense like “money management”, “risk management”, “trading psychology” and think, “Man, what’s the use?” What is all of this for? You can just buy here and sell there.
Why do you need to study this entire lot of things, if you just need to understand, WHERE THE PRICE WILL GO? And so on. Our mind is originally focused on “how to cheat the system” =)
Besides, I, for example, at the very beginning really wanted to believe that the market is good-natured, it understands my need and my despair and wants to help me. But the market has nothing human, no feelings or emotions; it’s the same phenomenon like rain or lunar eclipse or blooming of trees in spring. It doesn’t care, it lives its own life =)
Next, I will describe step by step, what I was focused on and what conclusion I eventually arrived at. As I learned from other traders later, these steps are quite similar for everybody, so this kind of guidance may help you.
I only warn you, don’t be angry with yourself, or don’t criticize yourself for that you are “still here” and he is “already there”. Give yourself enough time.
And the second important thing: I just outline the steps, without criticizing anybody. It is natural that all of us make mistakes and do everything in the wrong way at the beginning. In the beginning, we just can’t know what way is right =)
It begins immediately after you’ve learned how much one can earn in forex and installed a trading terminal on your computer. The best description of a “neutral observer” is “What if it reverses”.
It means when you enter a trade (even not according to the system) and the price goes in the needed direction you are just sitting and enjoying yourself. Next, there are first reversal signals but you don’t take the profit - “what if it reverses?” You think you are going to miss the profit, aren’t you? =)
If the price, on the contrary, goes against you, you don’t stop the loss: “what if it reverses” You will lose, but you could have avoided it.
At the first step, you know nothing about risk management, money management, let alone trading psychology. You just don’t need to apply them. Continue reading with Litefinance...