The Importance of Being Honest with Yourself | Forex Factory

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The Importance of Being Honest with Yourself

  • #1
  • First Post: Jul 18, 2011 8:09pm Jul 18, 2011 8:09pm
The most critical concept that has helped me become a good trader is being honest with myself.

At the end of the month the only thing that matters is how much profit or how much loss.

Ask yourself the question, "what am I doing right or wrong?" so that you may determine what tactics are effective for your bottom line. You have to trade the same way each time you trade so that over a period of time you are able to answer the question.

This is where being honest with yourself becomes important, because it is easy to let ideas and theories cloud your perception of what actually makes you money.

Everyone is different, and this will be different for everyone.
  • #2
  • Jul 19, 2011 1:17am Jul 19, 2011 1:17am
Quoting frankkn
The most critical concept that has helped me become a good trader is being honest with myself.

At the end of the month the only thing that matters is how much profit or how much loss.

Ask yourself the question, "what am I doing right or wrong?" so that you may determine what tactics are effective for your bottom line. You have to trade the same way each time you trade so that over a period of time you are able to answer the question.

This is where being honest with yourself becomes important, because it is easy to let ideas and theories...
Well said !

This is very simple thing but still not understood by human psych.

The things to success are simple but we make them look complex which is why staying honest with oneself helps trader realise his/her mistakes and improve trading capabilities , clear dusty cloud off the mind , think straight and clear and simple and keep on learning and improving oneself to climb the ladder of success.

Speaking from my own experience and sharing my two cents!
Be simple and honest and successfull!
BEING PROFESSIONAL IS ALL ABOUT HOW YOU CONTROL FASTEST THING--UR MIND!
  • #3
  • Jul 19, 2011 1:52am Jul 19, 2011 1:52am
Quoting frankkn
At the end of the month the only thing that matters is how much profit or how much loss.
Hmm - you can have a healthy profit but a very short life span.
The month end review comes back down to honesty Frank - did you have to gamble like a rodeo cowboy to earn those returns? How many times did you double down? Really? REALLY?
  • #4
  • Jul 19, 2011 5:00am Jul 19, 2011 5:00am
That's very important indeed
  • #5
  • Jul 19, 2011 6:07am Jul 19, 2011 6:07am
Quoting frankkn
The most critical concept that has helped me become a good trader is being honest with myself.

At the end of the month the only thing that matters is how much profit or how much loss.

Ask yourself the question, "what am I doing right or wrong?" so that you may determine what tactics are effective for your bottom line. You have to trade the same way each time you trade so that over a period of time you are able to answer the question.

This is where being honest with yourself becomes important, because it is easy to let ideas and theories...
I generally agree with your post, but I think a month of trading is the minimum, best is if you can see thousands of trades and how they worked out over the long-term.
  • #6
  • Jul 19, 2011 7:33am Jul 19, 2011 7:33am
Hey guys

I didn't mean to say that one month was enough time to claim to be profitable, just trying to illustrate the thought process that has helped me.

The key concept is being honest with yourself while reviewing your performance. You have to identify what works for you and sometimes your ego can get in the way because sometimes what works isn't what you'd expect.

When I say at the end of the month I mean at the end of every month (not just one month alone lol!) if you are profitable you are doing something right. It only takes a couple of % consistently every month to attract investors. The goal is to be honest and review what patterns lead to positive monthly returns.

Hope I explained myself better
  • #7
  • Jul 19, 2011 7:38am Jul 19, 2011 7:38am
Quoting triphop
How many times did you double down? Really? REALLY?
Haha I see your point. If your trading approach is like gambling and you are focused on a single month alone you're definitely right

Quote
best is if you can see thousands of trades and how they worked out over the long-term.
^^Custos

Yep a larger sample size will give you more reliable (not sure if the statisticians would choose that word but I'm no statsmen) figures. However, for my trading style I believe that it is more practical to observe the results as they happen.
  • #8
  • Jul 19, 2011 8:12am Jul 19, 2011 8:12am
true, true ..


u have to reflect every trade you took .. loser or winner doesnt mather..

and u have to be honest with you .. did u follow your trading plan ? ..

even (if not the most important) .. is if u took a trade that doesnt quit fit your trading plan .. but still gave u a profit u have to be honest with your self .. that u dont do this again !!!


you know not sayin that ahh another good trade i took .. look at me iam that man !! .. nah!! u didnt respect your trading plan .. ur a bitch.. dont do that again!! .. or the market bitch slaps u ...

be honest with yourself .. and reflect every trade u took ... actually if u still have to justify every trade u took .. u dont follow your plan.. !!!
but reflecting your desicions is a must .. to see if your still trading according to your plan..

cheerz
  • #9
  • Jul 19, 2011 8:18am Jul 19, 2011 8:18am
Quoting PrymeTyme
u have to reflect every trade you took .. loser or winner doesnt mather..
what about the good trade that you didn't take or the time you decided to have an extra hour in bed and missed a trade?
  • #10
  • Jul 19, 2011 8:21am Jul 19, 2011 8:21am
Quoting jzw
what about the good trade that you didn't take or the time you decided to have an extra hour in bed and missed a trade?

funny .. u mention this ! (Funny cause i missed one several mins ago)


its simple .. u missed the train.. live with that . the market spits out another setup anytime soon.. keep cool and be patient ....

better miss a good trade ,.. then beeing in a bad one ...
  • #11
  • Jul 19, 2011 8:40am Jul 19, 2011 8:40am
Being honest about ones trading performance requires much more that just your monthly statistics. Profitability is no guarantee of honesty.
The eternal search for truth pervades all aspects of our lives and we have become content to accept and settle for skewed perspectives – especially those that align with our own beliefs – politics for example. It is inherent in our very nature that when we reach conclusions we adopt as truth, they still inevitably contain personal bias.
The true measure of trading success is not to ask whether or not you were profitable, but whether or not you followed your trading plan and rule set. If your plan has a positive expectancy, you all ready know that over time you will make money. The struggle is the simple yet difficult challenge of following directions.
If you follow your rules and plan, then measuring your success based on profitability is meaningless because you expect to be profitable. The only measure and test of honesty is whether you followed your plan or not. There is no gray area, your rules are sacrosanct, and therefore this level of honesty is very easy to ascertain. You either followed them or you did not.
You will know you have reached trading Nirvana when your observations and subsequent reactions to the market become seem robotic, boring and second nature – totally emotionless. That is to say, to see the truth in the market, not in your monthly performance . . . not ever wondering why something happened – only that it did. You will only see price, and react with unconscious habit.
Simply knowing you have a monthly goal will add subjectivity to your analysis. Measuring your success by profitability will continue to bring emotion into your trades and sabotage your decision making.
Using this (rule following) benchmark can shield a trader from all or any other emotional baggage that might otherwise affect their trading mindset. Changing your ultimate goal to following the rules of a profitable plan without deviation will guarantee success.
  • #12
  • Jul 19, 2011 8:44am Jul 19, 2011 8:44am
Quoting dcginc
Being honest about ones trading performance requires much more that just your monthly statistics. Profitability is no guarantee of honesty.
The eternal search for truth pervades all aspects of our lives and we have become content to accept and settle for skewed perspectives – especially those that align with our own beliefs – politics for example. It is inherent in our very nature that when we reach conclusions we adopt as truth, they still inevitably contain personal bias.
[font=Calibri][size=3]The...
I also agree with your point, but you have to realize that the majority of people here don't have a profitable trading plan. They just have a trading plan, but they don't know if it is profitable, and very likely it is not.

So, yes, in the end it's just about following your profitable plan, but until you have that, you have to search what works and what doesn't and be honest to yourself in this search. And that is what the original poster is talking about.
  • #13
  • Last Post: Jul 19, 2011 8:50am Jul 19, 2011 8:50am
Quote
So, yes, in the end it's just about following your profitable plan, but until you have that, you have to search what works and what doesn't and be honest to yourself in this search. And that is what the original poster is talking about.

True - went beyond the search aspect in my commentary.
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