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Forex Trading Strategies – Do You Want to Stay Angry, or Do You Want to Win?
Follow me on Twitter @fxflow as I analyze the market in real time.
On my flight to Dubai I lost my Blackberry on the plane. While there I managed to blow out the transformer to my laptop. When I came back, the super in my apartment building forgot to plaster the walls of my bedroom, so I had to endure the smell of paint ( something I despise) for several days.
Despite these annoyances I never got angry. This is after all just the normal ebb and flow of life and mishaps happen all the time. Yet how many of us bring the same “laissez-faire” attitude to our trading? I certainly did not. Many a smashed computer screen and keyboard have been victims of my wrath when my trades did not go as planned.
It’s taken me a long time, but I have finally understood that anger is the single greatest enemy of successful trading. There will be times when you hit the buy button when you meant to hit sell. There will be times when you will walk away from the screen for 2 minutes only to come back and see that the trade went to within 1 pip of your target and now is back below your entry. Or you will watch as the trade quickly dips to your stop, takes you out and then rallies in your direction while you are left with nothing but losses. You will have your platform go down just at the moment when critical news creates massive opportunity for profit and you will sit there trying to login in vain. Or as just happened today, Reuters will make a mistake in its news release causing prices to plummet and then just as quickly reverse wreaking havoc with your positions.
All of this will happen to anyone who trades actively and more importantly it will continue to happen for as long you trade. This is after all just the normal ebb and flow of life and mishaps happen all the time. Yet if we get angry, if we rail at the unfairness of it all, if we throw a temper tantrum like a two year old toddler we risk losing something much more than money. We risk losing control.
Once you lose control as a trader, you lose everything. The money is just an afterthought. As sure as day follows night, if you lose control the equity in your account will be gone as you begin the wild orgy of revenge trading trying to show the market who is boss. The market meantime will simply stand there like a bemused black belt champion and methodically strip you of all your money as you make one desperate trade after another.
Don’t get me wrong. I am not a robot. I still get upset anytime a trade moves against me, and you can even argue that my heart bleeds with every negative pip. But over the years I have learned that getting angry is waste of my time. The market couldn’t care less. The market is like a referee at a soccer match – it will never change its mind. So the only question you need to ask yourself is, “Do I want to stay angry, or do I want to win?”
Think about that next you are contemplating punching your flat screen monitor.
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