Taking full responsibility for your trading

As rookies we were told that in order to make money consistently in this market, we have to accept nothing less than full responsibility for our trading actions and its outcome.

This make sense of course. we put in our own money, create and test a plan, follow and trade the plan. We take full responsibility in interacting with the market. But I got a question to ask, we all know that trading is about probabilities, anything can happen. So considering this fact how do you accept complete and full responsibility for the outcome of your trades when there are so many unknown variables that can either make a profit or wreck your trade?

Or can we say that by always considering the unknown variables before we put in our trades (by putting stop loss with proper MM etc). We are taking responsibility by recognizing the inherent risks caused by all these unknown variables in the market?

I think perhaps you have misinterpreted the meaning of this particular well worn saying, my interpretation is that this is more aimed at the people who try and blame their lack of success on external factors which they can control...e.g. 'My broker is a crook', 'My EA doesn't work', 'My computer is too slow', 'My system sucks' the list goes on. The things you have enumerated one cannot control.

The markets are inherently unstructured. Technical indicators give it some sort of structure but overall, price action is not in our hands.

Blaming ourself for random market movements causes anxiety, depression and palpitation.

The decision to trade is solely your own. Nobody points a gun to your head and say "Buy GBPUSD now!" or "Sell EURJPY now!" If the market reverse soon after you opened a position, blaming the market as conspired against you is one of the sign of irresponsibility.

If you loss trade after trade, saying that God has stand against you is another sign of irresponsibility.

Asking other people in this forum to make you able to make money from forex is yet another sign of irresponsibility.

So in other words, this commonly used sayings infers that we take full responsibilities on what actions we can control?

But how do we take full responsibility for a failed outcome and you know its result of probabilities (No such thing as 100% sure win trades) even after properly executing your trade according to your plan.

In my opinion... we must take responsibility for our actions. Our actions can be placing a trade or staying out of the market... Whatever we have gained, lost or what we wouldve gained is through our choices.

To be irresponsible also means we are responsible for our irresposibility. Just by being in the market it is like a contract that `I' the trader recognise that this trade could fail due to actions beyond my control. This in itself lays the responsibility on the the trader.

It is like being told that the roads here are lawless, and no other driver is responsible if they crash into you. It is upto you to put the safety precautions in place and for you to decide whether or not it is a good idea to drive on this MAD MAX set.

Yes.

The inference from my first answer is you can't, losses are just part of the game.
BTW, IMO this is all just common sense.

Our full responsibility is to execute our trading plan. It is the trading plans responsibility to make a profit.

To quote Mark Douglas in "Trading in The Zone"
"Be rigid in our rules, flexible in our expectations"

You are not responsibile for a big bank making a big 50 pip candle that moves against you. What you are responsible for is to protct yourself from that candle.

Rufus

"But how do we take full responsibility for a failed outcome and you know its result of probabilities (No such thing as 100% sure win trades) even after properly executing your trade according to your plan."

You need to change your perception of the market/s. By starting this thread, it is evident you fear a loss. I will give an example and toss in my $0.02 afterwards.

Story:

Several years ago, I met a successful stock trader online. He claimed 4 out of 10 trades were losers. Think about this, Caesar, 40% of his trades FAILED!!! He made money because his winners absorbed his losses, and then performed well enough to increase his account balance over time.

Comments:

You take responsibility by the realization that you will NOT make money on each trade. You limit your losses by devising a system with a better than 1:1 ratio. Personally, I don't want a trade with less than 2:1 odds, hopefully better. Money management and trading discipline are 90% of this business.

My system works on the 3HR time frame. I risk 25 pips, but the returns are generally 100 pips or greater. Making 100 pips when risking 25 pips is a 4:1 ratio. Do not think of it as "I made 'x' amount of money. Think of it as "I now earned enough money to execute 4 more plays".

Should a trade fail, I lose 2.5% of my account balance. No big deal. Although in fairness, I am no different then you. I failed in the markets for years but in the past few months a light bulb went off. Things are now turning around for me. Stick with it and be persistant. Do not let a few losses stop you from learning. Stick with a demo unitl you find a system that proves out with a justifiable risk and reward ratio.

Best of luck and keep us posted during your journey.

Todd

Hi all

This is something I posted earlyer today on a different thread.

With the Holiday season upon us it gives me a lotof time to think about Fx and all. This morning while drinking coffee I was thinking a lot about trade or position managment.

I contend that how you manage your position is at least as important if not more so as the edge that gets you into the trade. I believe that a good manager can take any series of positions in any market and by management alone can make a profit.

Once the position is in place the fear or greed can take over easily. The rules we set up to manage the position will manage the fear and greed. This is why sometimes trading on a demo account can be detrimental. It does not teach us the way to manage our mind. Seeing your own dollars vanish or accumulate play with the synapsis of your brain cells. We can train the synapsis by how we manage our positions. So when you feal you are ready to leave the demo account, do a very small live account. But not so small that you don't learn how your mind reacts to certain situations.

Why are some people afraid of snakes, dogs, spiders, future, failure, or what ever. You were not born with any of these. There are two fears we are born with, falling and loud noises. All others we have were acquired over time for whatever reasons. So we must manage our positions to manage our minds when it comes to money. To quote an american movie "Grumpy Old Men"... "you can crap in one hand and wish in the other and see which one fills first". No hoping, wishing, praying, fearing or being greedy can enter in our trading.

As you may see, I am a fan of how to manage your mind. At times I will spend hours looking at a chart in light of position management. How much time should I give a position tohit 10 pips?,20 pips?, 30 pips? These are all things that should be taken in consideration. When do you let price hit your stop?

My initial stop is 20 pips. I take 1/2 off when I get 10 pips, and so on. How you manage that position is up to you. It is your money. For me now when 10 pips profit is hit and I take off 1/2 my position. I move my stop closer ten pips. Of course at times it will take me out of a move. But for me and how my mind works, I want positions paid for as quick as possible. With this moving of the stop 10 pips pays for my position. If it gets hit I break even.

There are tons of things we can do to manage our trading. As a matter of fact, in my trading plan there are far more pages on management then rules for getting into a position. Any fool can hit buy or sell. But what we do after that order is placed is of utmost importance to our profitability in this market.

Well hope this helps someone.

Rufus
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Thanks guys for your comments. I read Mark Douglas's Trading in the zone when I come across this term. Of course I understand, as what he mentioned that expert traders act just like a casino owners or professional gamblers, they are not concern about the outcome of each individual trade and focus on their now moment because they know as long they trade with their edge they will be profitable in the long run. I started this thread to make sure I understood completely what he meant on the books. I doing what ever I can to think in probabilities

There are people out there with trading successes that are unbelievable.
I personaly know someone who uses D,4H,1H, charts, enters a trade 1 or two times a week and has a 95% success ratio. I watched him do it. Incredible patience.

Rufus

To take full responsibility means not gambling. Learn what it is all about BEFORE you dive into any trades. The two best free threads to start you on your way are these.

Jacko: http://www.forexfactory.com/showthread.php?t=27286

J16: http://www.forexfactory.com/showthread.php?t=2331

After you have read those, you will have learned 90% of what you need.

to me, its more like take responsibilty for the fact that you were willing to lose the money, and did. dont try to say that i didnt want to lose all that money. if you make a trade, you are willing to lose the amount of money you put down. otherwise, dont make the trade.