The Mindset of A Successful Forex Trader
I was talking with one of my price action forex students today who in some sense, has a very typical story – they tried everything, from forex robots, signal services, listening to expert trade advice, reading all kinds of books, etc. but no matter what they did, they still were consistently losing. They are definitely dedicated and sincerely want to learn to trade the forex market successfully so it is not a question of effort.
Particularly, they seemed to have trouble dealing with losses and asked me how I dealt with them. I asked them how they dealt with them just to get an idea of what their forex trading mindset was and where he was coming from. After hearing his responses, I told him I would write an article on successful forex trader psychology and how a person with a successful mindset deals with losses and failures which can make all the difference in the world. So here is a short but sweet article describing 5 successful forex trader psychology tips that will help you deal with losses and have a successful mindset.
#1 Don’t Let Losses, Mistakes or Failures Determine Your Sense of Value
Successful people seem to have a completely different mindset around losses and failure because they think about it differently. In trading, this would translate to not letting every trade (win or lose) determine your sense of value because this will make you totally dependent upon the results in the beginning which is a precarious time. Instead, focus on what you need to do with the information being presented in the loss or mistake you made. This will keep you focused on moving forward instead of becoming judgmental about your process. Don’t let the pain of the loss color your experience. Use it as fuel to learn to trade better.
#2 Use Losses and Failures As An Opportunity To Become More Resilient
The greatest traders, basketball players, golfers, or any great in any field has losses and failures. They don’t look at this and become despondent or think their are a failure. They become humble, realize they have more to learn, and become sharper in how they look at things which helps the process become more informative.
But more importantly, they become more resilient and determined to become better. I really congratulate Tiger Woods who for almost 3 years had not had a major win. Keep in mind this was someone who was used to winning like it was breathing. In his last tournament, he was in the lead after having one of his best rounds ever in his life. What was he doing after playing 18 holes of golf after 3.5 hours of play? Right back at the driving range working with his coach to figure out what he could have done better.
He used these losses over the years to become more resilient and this is what you need to do. Imagine having a 3 year losing streak, and imagine what kind of resolve and resiliency it takes to keep fighting to get back to what you believe is possible. That is resiliency.
#3 Take Trading Seriously, Not Yourself
Successful forex traders (and for that matter, people across all fields) take the process seriously, but they do not take themselves that seriously. They know they are human, that they will make mistakes, that there is more to learn, that they will never be perfect. So don’t take your thoughts, judgments and emotions about losses too seriously or let them define you. But take the process of learning to trade forex seriously.
#4 A Loss, Mistake or Failure Informs Me What I’m Doing Wrong
Similar to #1, use those losses, failures and mistakes to be opportunities to correct your mistakes. I cannot tell you how many traders I have seen learning to trade forex price action would be great traders if they could correct their mistakes. Often times, mistakes mean the difference between a win and a loss, a winning month and a losing one, so use the information contained in each loss, failure or mistake as an opportunity to get closer to your dream of trading successfully.
#5 It Takes Courage To Fail
No trader ever became successful without taking risks, without going against their emotions, their sense of comfort, their desire to do it the easy way, or not put in the work. You have to get comfortable with losing as it will be part of the game. Be willing to fail and make mistakes. If you hide behind the comfort zone, you will never go to places you’ve never been before in your trading. You will never see the top of the mountain and the view from there. Learn to face the craziness of the markets, the unpredictability and the oncoming waves crashing into you with courage. You can learn from your failures as much as your successes, so just consider it part of the process of learning to trade and achieving your objective.
So there you have it, 5 key things which can help you develop a successful forex trading mindset and help you deal with losses so they become the fuel and building blocks of your successful trading, not an emotional vice grip which constrains your natural talents and intelligence from coming out. The mindset of a successful trader simply deals with the experience of losses and failures differently – but most importantly, realizes success starts with your mindset.
I welcome your feedback and thoughts on this so make sure to comment, like and share the article to pass it on.
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