Positive psychology is really important: But what does mean? It’s not just about controlling myself so I don’t self-sabotage. It’s far deeper. The more I know myself, the more I understand the ‘why?’ in my life, the more balanced approach I have – the more relaxed and confident I am, the more I trust myself to do the right thing. So much failure comes, not because of a lack of knowledge of skill, but because of creating the wrong type of pressure, which creates a mindset of desperation. I need to relax and release. Let things go and find the flow in my life, before I can ever find it in the market.
Diversify: By its nature forex is the hardest arena in which to achieve trading success. There are limited instruments, (majors, minors, exotics); I need to be able to read the market very accurately (or be lucky); I need to be able to discern what is valuable information and help among a plethora of BS and wannabes; there are few real success stories for a reason – what makes me think I’m going to be any different?
So, I need a more diverse range of instruments to trade alongside forex. I need to approach this differently. Instead of trying to work out where turning points are, I want to know the direction is likely to last months and years. Life is too short to spend (or waste) this amount of time. There must be another way. I need more diversity to choose from - 26 pairs are just not enough. With so few options I will force a trade when it doesn’t fit. I need to have patience, or more options – actually I need both. Trading pairs of something creates too many variables, I’m trying to interpret the balance between two independent things. Trading one thing reduces the complexity of the calculation – it reduces the variables.
Focus on the long term: This is closely related to (point 2). I’ve tried trading across all timeframes – and long-term suits me. I don’t want, or need the pressure of being pinpoint accurate to be profitable - I just want to be in the right general direction. I don’t want to trade something that I think has a ceiling – I want to be able to hold the trade and it keeps on going – I want there to be the consistent possibility of ‘all-time highs’. I want to be able to add to it – knowing that it has further to run, without panicking that I’m at the top (or bottom).
Have another passive income stream to help fund trading:
Not you 9-5 or day job - that's for bills and should not be risked.
- It removes the pressure
- It allows me to be wrong, make mistakes etc
- It provides another basket to put my eggs in.
I have a decent enough career and I’ve built my lifestyle around what it provides me. So if I trade – I'm forced to use spare cash or savings. If I’m not successful straight off, then I will work through the cash I put aside to trade. Once that's gone, I now need to wait or sacrifice something in my life to raise capital to continue – to have more funds to trade. Each losing run means I need to provide more capital to allow me to continue. This creates desperation and an unhealthy need to ‘right’ – and for a lot of people, it becomes a tragic cycle of trading like your'e gambling and debt.
To deal with this, it’s important I have another passive income stream other than my daily job and in addition to trading. I need something to be able to add to my trading pot. It can’t require much time and needs to provide a decent income that funds and then later supplements my trading. I found that having trading as one of a number of income streams removes the pressure. When I don't have all my eggs in one basket I’m more relaxed and hence more effective and profitable in my trading. I don’t need to trade so much, I’m no longer desperate – so I don’t chase trades.
Hope that makes sense and helps someone. Shout if anything is unclear.