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Monday, 26 September 2016

Don't compare yourself to others

This is ash article from my favorite trading learning source.

Stop Comparing Yourself to Other Traders!

Ages ago, horsemen invented blinders to keep their horses focused on their work. Blinders are pieces of leather attached to the horse’s bridle that prevent them from seeing anything except what’s in front of them.

Without blinders, a horse can see almost completely behind itself without turning its head and can be easily spooked by movement or objects it doesn’t recognize. By having fewer distractions, the horse is more dependable and stays focused on getting the job done.

As a trader, I found that whenever I started comparing my trading performance with other forex traders, my performance would usually worsen. This “distraction” typically led to losses for both my trading account and mojo.

Back when there was no Netflix, Amazon Prime, or Hulu available and Oprah was one of the most interesting people on TV, I chanced upon one of her interviews. In it a woman was sharing how comparing herself to other folks in her business always made her take a step back from her goal. Her words made me realize that the concept applies to our everyday lives.

Don’t compare yourself to others. It’s tempting in the modern, competitive world to constantly ask, “How am I doing?” and to gauge your success based on how the rest of your peers are faring. If you spend too much time on Facebook checking out which of your friends have bought brand-new cars or are enjoying extended multi-city vacations, then you might just feel bad about not “living the life” like they’re doing.

It’s easier said than done, but you should NOT allow how well you do compared to others affect how you feel about your inner worth and feelings of success in life.

Comparisons are useless. Run your own race.

You alone can hone your forex trading skills. What works for others may not necessarily work for you. You must find a method of your own, one that matches your trading skill and personality. Remember that comparisons will only make you feel frustrated and distract you from forging your own path to profitability.

Don’t think you are trying to beat others to an imaginary finish line. People who achieve great things work independently and on their own terms. They don’t care how others are doing. They follow their own timeline, their own passion, and look INWARD for where to go next.

Notice how I said inward, and not outward. They look inward for where to go next.

How you perform has nothing to do with how others perform. All comparisons will do is torture you. You will feel jealousy or envy. When you see that you are doing relatively poorly compared to a fellow trader, you are likely to think distracting thoughts such as, “Why can’t I do as well?” or “I must not be as good of a forex trader as I had thought.”

To maintain motivation, focus on improving your past performance record, rather than looking at how other traders are doing.

You usually don’t know what factors created their performance records, so comparisons can only mislead and hinder you. They could just be on a lucky streak or have a market wizard standing right behind them on every forex trade providing advice.

Put your “blinders” on. Don’t look at anyone else’s record but your own. Everyone has a different learning curve.

Run your own race and finish at your own pace.

Thursday, 8 September 2016

Surviving a Loss

Reality Check

There won't always be winning days, there will be a day where you lose and it could be big. That's the harsh reality of Forex Trading and the sooner you recognize it the better able you will be to deal with the loss when it comes.

As much as i can warn you of the ups and DOWNS of trading you will need to be prepared for it and the effects. However, Nothing can entirely prepare you for it till it happens. You can be sensitized and you can understand that it will happen but all you can do is put things in place for when it does. The key is to always survive a loss. In trading, as with everything in life, everyone can enjoy the good times, the +300 pip gain, the 4 weeks uptrend that you have been riding but the true trader is the one that can withstand 1 or 2 or even 3 huge losses and continue trading according to plan.

Reducing Recovery time

After a loss has occurred whether it has wiped some, most or all of your account the key is to recover in the shortest possible time and always keep reducing your recovery time. The longer you take to recover the more emotions set in and the psychological impact increases. People tend to think a lot over time and this thinking time can drive fear through your trading machinery which can be extremely devastating.

   Check where you went wrong

   Recovery should begin by checking what went wrong and where. If you did something wrong then do what is necessary not to repeat it. If the market was off then ensure to check all market conditions prior to trading. Check through the anatomy of the losing trade so that it doesn't reoccur. This is the beginning of reducing losses in any aspect of life, business and trading:-Identifying the cause.

   Remove Emotions

Emotions are a no-no in trading. Emotional traders are gamblers and lose a lot more than they profit. Step by step, eliminate trading with emotions as it can lead to revenge trading which is a downward spiral of your account. The best way to eliminate emotional trading is to stick to a set of rules.

Always Stick to Plan 

There's nothing more essential to recovering from a loss, or preventing a particular loss in the first place, as a sound and effective trading plan. Your trading plan is your blueprint to create your trading estate. For more info on the importance of a trading plan click here. Even if you lose off of a few trades sticking to a well defined and sensible plan can overcome those losses easily and get back to increasing  your profit margin.

Win/Loss Ratio (P/L)

Pay attention to your Profit and Loss and not necessarily to individual trades although each trade contributes to either a profit or a loss. Your P/L tells what kinda of standing your account is in and how good or great of a trader you are. Keep your average losses to a minimum and ensure your trading plan is effective in increasing your P/L ratio.