Positive psychology is really important: But what does mean? Itís not just about controlling myself so I donít self-sabotage. Itís far deeper. The more I know myself, the more I understand the Ďwhy?í in my life, the more balanced approach I have Ė 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 Ė what makes me think Iím 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 doesnít fit. I need to have patience, or more options Ė actually I need both. Trading pairs of something creates too many variables, Iím trying to interpret the balance between two independent things. Trading one thing reduces the complexity of the calculation Ė it reduces the variables.
Focus on the long term: This is closely related to (point 2). Iíve tried trading across all timeframes Ė and long-term suits me. I donít want, or need the pressure of being pinpoint accurate to be profitable - I just want to be in the right general direction. I donít want to trade something that I think has a ceiling Ė I want to be able to hold the trade and it keeps on going Ė I want there to be the consistent possibility of Ďall-time highsí. I want to be able to add to it Ė knowing that it has further to run, without panicking that Iím 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 Iíve built my lifestyle around what it provides me. So if I trade Ė I'm forced to use spare cash or savings. If Iím 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 Ė 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 Ďrightí Ė and for a lot of people, it becomes a tragic cycle of trading like your'e gambling and debt.
To deal with this, itís 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 canít 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 Iím more relaxed and hence more effective and profitable in my trading. I donít need to trade so much, Iím no longer desperate Ė so I donít chase trades.
Hope that makes sense and helps someone. Shout if anything is unclear.