Keeping It Simple.
27th July 2015 Kis2 Being Realistic about your expectations
Here we are with the second blog and as I write I am constructing a list of topics for future blogs. There are so many areas within trading where a simple, straight forward, pragmatic approach is what is required. No need to make a meal of it. After my last blog about finding a trading system I realized that I should have made reference to a new book by Jody Samuels, CEO of FX Traders EDGE called “10 Habits of a Successful Trader” which contains a section about the subject of selecting a system. If you are interested in reading this then follow this link LINK TO PREPURCHASE.
Now I am assuming that you have a trading system that you know inside out and by following the rules can identify trades. If not then please do that and don’t read any further. This is all part of keeping it simple. Don’t get ahead of yourself. Just take it one step at a time. If you have a system then read on.
Believe me when I say that by standing back now and thinking about what you expect from your trading work you will be able to structure what you do and make maximum progress from your efforts.
Here are some things you should expect during your forex trading journey.
- Expect to have to make an effort. If it was easy then everyone would be doing it.
- Expect to have to go through a learning curve. If you were training as a mechanic you would not expect to get a job working on formula one cars in your first week. Actually not in your first month. Come to think about it not in your first year. Probably it would take many years to excel.
- Expect to have losing trades. Expect that on some days your account balance will get smaller. I love walking the fells in the English Lake District and I particularly like getting to the top of the mountains there, but I know before I even take one step that at some point during the climb I will be going “Down Hill”. I love this as an analogy to trading. Before even starting to trade if you can expect to go “Down Hill” during the journey then you will not be affected emotionally when it happens. So long as when you look at the big picture (over a week or a month) you are getting more winners than losers and your account is growing then you should be pleased.
- Expect that sometimes the market will go a different way to that which your analysis tells you. You do not control the market by putting Elliott Wave counts, or trend lines etc on your chart. The market does what the market does.
- If you are trading long term then expect the short term trades to pass you by.
- If you are trading short term then expect the long term trades to pass you by.
- Expect to miss out on trades that happen when you cannot be in front of your computer to see them looming up.
Do you get my drift?
So we need to be accepting of the fact that no system is perfect and there will be set backs.
Some of the other expectations that you will need to manage will be discussed in detail in a future blog but here is a simple list:
- Your trading style will be dictated by the time you can give to your trading so do not try to achieve the impossible.
- The growth of your account will be slow initially and will subsequently grow according to the size of your balance and the risk you are prepared to take.
- You are your own trader so do not expect to trade like anyone else. Compared to you other traders have different emotional ties to money, different amounts of time to devote to trading, different sizes of account, different abilities to follow rules and different types of support.
By getting the measure of these aspects of your trading you will end up with a clear view of where you are going, how you will get there and how long it will take. You will be able to identify areas where you need to brush up on your training or learn to identify and control your emotions. So take the time to think carefully about each aspect of your trading business and how you can make it work.
Wow! That all sounds a bit full on but take one element at a time what looks like an impossible mountain to climb will become a series of simple walks in the park. You will soon be a confident profitable trader.
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I hope this was of some help. See you next time.