Happy New Year of the Snake!
NOTE: For this new year, I’ll be writing a blog post and article every day of the trading week to launch the Chinese/Tibetan New Year off with verve.
Today’s article is about what you need to do to make money trading (consistently). Did you know about 35% of all retail participants make money trading? This is true, but what you need to know is in the details, that ~half of them (17.5%) make money on back to back quarters, and ~half of them (7.5%) make money on multiple back to back quarters.
This should communicate to you consistency is hard to achieve in this market, however it can be done. But you have to do some key things to make money consistently. In reality, there are many things you have to do, but these two things are critical to make money trading consistently.
So what are these two things?
I can sum them up into two words: Getting Comfortable.
Yep, that’s right – getting comfortable.
What this implies is really twofold;
1) Getting Comfortable with Uncertainty
2) Getting Comfortable with Yourself
I’ll briefly talk about the first one today, and tomorrow dive into the second. But i’ll begin with why the first one haunts beginning traders.
Getting Comfortable with Uncertainty
When you look back on a chart, everything seems so clear. You can see where your price action systems made winning trades. You can see why that key support and resistance levels held, why it was a great time to get in, why the trend was going to continue, or reverse. It’s all so clear…after the fact, and it always will be.
Because right side of the chart represents uncertainty, while the left cannot be altered. Our brains are so hard wired to look for structure/patterns/order, that any chaos, lack of structure/solid ground is unnerving for us. The reality is, we are used to setting up our lives for predictability.
We often look for jobs that have the same schedule, the same pay, the same rules – all predictable for us to plan and live our lives.
Trading forex professionally is just the opposite and requires us to re-wire our neural programming.
It guarantees no return, no fixed salary, no predictability. It is a constant sea of uncertainty we are swimming in. The only thing that allows you to make profit, is you learning to make consistently good decisions (being disciplined, following your system, managing the trade well). But to do this, you need training, practice, and to get comfortable with not knowing what is next.
Ever Flowing River
The money is there to be made, and you sense this…you sense the potential. You just have to learn how to make it. But first, you have to get comfortable with uncertainty.
Much of developing a successful trader mindset is getting comfortable standing in the ever flowing river of uncertainty. It is standing at the precipice on the waterfall into the next moment. This river, or waterfall, is often referred to as the ‘right edge of the chart‘. But in reality, it is the absolute potential of the next moment.
Most of The Time
For most of the time you will be trading and sitting in front of the charts, there will be less clarity, and more uncertainty.
If you get anxious, feel pressured, upset, or worried not knowing whether you will make money on your current trade, then you will likely make a bad decision. These often lead to losses as you probably have experienced already.
But if you can get comfortable with this uncertainty, and comfortable with losses (which are inevitable), then you will find yourself making good decisions more often than not.
Good decisions lead to better trades. And when you start doing this consistently, the money will come. The destination will always take care of itself, but the process from here to there is what you can influence.
Ask yourself which end of the statistic of profitable traders you want to be on, then ask yourself what you are willing to do to get there.