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The Most Important FACTOR Behind Traders’ Failure – Part 2

Discussion in 'Forex Beginner Q&A' started by Currency Expert, Sep 4, 2014.

  1. Currency Expert

    Feb 14, 2014
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    “Our mind is our enemy.” – Tom Hougaard

    Our mind is really our foe, especially when we find it extremely difficult to do what are in our best interest. Doing the right things tends to make us uncomfortable initially, unless we train our mind to adapt to doing the right things until they become our second nature. In the part one of this series, I mentioned how drivers and motorcyclists need to be forced to do what are in their best interest and the best interest of their loved ones (including members of the public).

    It’s well known that smokers are liable to die young. A few years ago, I visited an elderly man who’s a dad to one of my friends. He was glad to see me. After some time, he reached for his drawer and took out a cigarette. He lit it and started smoking. The elderly man noticed that, by my countenance, I wasn’t happy that he was smoking. I was concerned about his health, for he looked a bit emaciated. Before I could speak, he said:

    “Young man, I know you aren’t happy that I’m smoking, but that’s not your business. I’d been smoking before you and your friend – who’s my son – were born. I know cigar is dangerous to my health, but mind you, if my health deteriorates and I die, it’s nobody’s business. Nicotine is thought to be poisonous; yet I buy it with my money and take it into my body. It’s my body and my life, not your body or you dad’s body. If I do what can affect my life, it’s nobody’s business. It’s my life and it’s not your concern if I lose it. I’ll smoke till I die. Whether I smoke or not, it’s something that’ll cause my death. Your friend, who’s my son, has accepted this fact and has stopped remonstrating with me. I’ve told my children that if I die today, I should be buried quickly so that I don’t cause a stench in the neighborhood.”

    What does this have to do with trading? Many traders who know what can’t pay them in the markets still find those things irresistible. This is the most important reason why most traders won’t make it. Below, you can read 4 things that will guarantee your failure in the markets. If you avoid those things, you success is then guaranteed.

    4 Things that will guarantee your failure in the markets
    1. Thinking that risk control isn’t very crucial: Risk control is one of the major factors that contribute to your everlasting success in the market. If you don’t know what it is, you’d better learn it and start applying it. If you know it already, you’d better start applying it with strict religiosity.

    2. Thinking that you know everything: It’s unfortunate that many traders feel that they know what the price would do next. We tend to feel we’re hot, but the markets sometimes remind us that we’re cold. The expert traders’ saving grace is that they never forget they’re students of the markets. It’s thus helpful to trade what you see and properly manage your trades. It’s by far more helpful to use speculation methods that have stood the test of the time historically: plus methods that make money regardless the direction of the markets.

    3. Thinking that overtrading can bring more profits: Overtrading doesn’t improve any statistics, especially when the extant market situation isn’t favorable to your trading methodology. Rather than doing that, you may think of temporarily suspending a certain trading approach until the market conditions become favorable to it. The time of favorable conditions is recognized based on expertise and experience. Another key is to make sure that there’s no reason not to trade a particular setup. This ensures that we enter a position based on our logical entry rules only, not based on irrational emotions.

    4. Thinking that your education and knowledge in other field can help you in trading: I know speculators who were very good at other things but who’re now grappling desperately with the markets. Bill Gates, who’s very successful in the computer world, was recently beaten at a chess game by a chess champion. John McAfee was successful as a software engineer and programmer, but failed as an investor. Your expertise in one field doesn’t automatically translate into success in another field. Someone who’s successful as a TV superstar may fail as a politician. No matter your level of education or degree of expertise in another field, you’ll need to learn the art of successful trading.

    Weigh the consequences
    There are consequences for suicidal and safe trading principles, and therefore, you’d do well to weigh the consequences before you allow your mind to mislead or lead you. Testing a method in real market conditions is more preferable and more agreeable. When a good method doesn’t work, we patiently control our risk and wait for the time when the conditions in the market would be favorable to it again. The easiest trading methodologies are also the most profitable.

    This article is ended with the quote below:

    “When I gave up trading due to frustration and losses. I realized the markets didn’t beat me, I beat myself. The classic Jesse Livermore line. I firmly believe that most, if not all of trading over a longer time frame is psychological.” – Larry Tentarelli

    Source: www.tallinex.com
  2. orni308

    orni308 New Member

    May 31, 2013
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    yeah there are time when we try to over do things , when all that matters is to follow basic market rules.

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