Well, well, well, the number one question of the day what is the hardest aspect in Forex? This is a great question and once again it goes back to a similar topic i went over recently on dealing with loss. People often ask me is this really the hardest aspect in Forex and I will say time and time again “Yes, yes and yes..”
.. I will go as far as to say as well, that the main reason so many of us traders struggle in any way in trading is this aspect. Does it sound familiar to you?
Above – I lay out the golden rule in the video above..
Let’s go over the facts firstly, say you are trading a proven strategy such as my engulfing strategy which has a proven over 70% success ratio then when you get losing trades is it the strategy that is ever at fault..? Let’s face it, there is never anything wrong with a proven strategy. Why? Well, because the strategy works, back testing and forward testing has shown it.
… So what really is the issue then..?
The issue is how us as traders psychologically deal with the pain of loss. The strategy has nothing to do with it. It is all about YOU and that is why it is hard. It is hard because in a way your association to loss is what keeps you forming bad habit after bad habit.
.. So what is the solution..?
The solution is to disassociate loss by associating it with things that either you are grateful for or things that make you happy. You may now be thinking, what the heck is Timon on about, trust me here, have a leap of faith. The aspect of pain with losing trades actually can cause you as a trader to take trades where in a positive mindset you would of completely avoided. Instead get away from your computer, sit down and think on something that makes you happy. Go for a swim or do something that makes you happy. Associate loss to good things in life and then you can start to see trading as a process.
Above – Me going for a swim in a resort in Hue in Northern Vietnam. If you enjoy swimming what better way to get over the feeling of loss than going for a relaxing swim.
Like any process it has ups and downs.. In Forex it is much like win, win, loss, win, win, loss, loss, win, win, win.. This is an example of a positive process in a strategy. It is okay to lose some trades because overall the strategy is a process in which losses are part of it.
If like many other traders you are focusing more on your losses and not excepting it more so than your wins, then you will find one of two outcomes in general apply to you and your account. Maths predicts it nearly every time.. Either you are mostly breaking even or secondly you are actually slowly losing money, or even worse quickly losing money.
Above – One of my passions while travelling around the world is jumping on a motorbike and exploring the countryside. A great way to meet people and unwind..
In conclusion like I have mentioned a number of times before, dealing with loss in the process is part of any good trading. By doing not not only can you be a great trader but you also can be a very very wealthy one. Remember trading is a tool like any other tool, you can use it create wealth or you can play around. The choice is yours..?
Let me know your thoughts as well by commenting below, do you deal with loss well or does it effect you heaps?