Why You Should Not Strive For Perfection In Forex Trading!
A private Student asked a very good question. He wanted to know how he could move from attempting to find the perfect set up to take a trade. To move from the theory phase to the action phase.
In my experience if one student is having this problem 10 more must be having it also. I answered many of these questions in my money management E-Book but I am happy to review a solution here for all to read and get something out of. Please feel free and visit my blog and comment on whether or not this helped you.
If I am understanding this traders problem correctly and I do think that I am, he is looking for the best possible place to enter a long of short position. He wants it to be perfect, with no adverse movement against his position. His issue is that he is stuck and can't pull the trigger on a trade. When he does self doubt overwhelms him, and he cuts out to quickly, or runs the trade beyond his Stop Loss. Lets define the issue:
Perfection is rejecting anything that is less then perfect, you demand that all be in perfect order. The Medical Definition helps us out further, lets look at that definition.
perfectionism definition Pronunciation:. pr-fek-sh-niz-m. Function: n : a disposition to regard anything short of perfection as unacceptable especially : the setting of unrealistically demanding goals accompanied by a disposition to regard failure to achieve them as unacceptable and a sign of personal worthlessness
The unrealistic setting of goals is a definition that we want to keep in the forefront of our mind.
Perfectionism in trading is a form of procrastination. Procrastination in trading occurs because of the fear of being wrong, it is Ego based. This persons values being right(showing that they are smart) more then they value making money in the Forex Market. This will cause most to trade haphazardly. Taking one trade that sets up and disregarding another, then moving s/l (either up or down.) It just creates confusion, which produces non adaptive behavior. That will put you in the negative loss loop. Confusion...Errors...Losses!! Rinse and Repeat Confusion....Errors.... Losses. Errors are not following your trading rules! Errors have nothing to do with losing Money we all do that, Trading without losses is like living only breathing in and never breathing out! Your main job as a trader is to Control The Losses. How Through Money Management.
Aldo always told me (and I think he pinched the line from someone) *Professional Traders look for over all performance, Novice traders are always in search of Perfection*
When you are looking for perfection, you want to be right, you are not dealing with the market. You are trying to force the market to do what you want it do do. Huge mistake. There is a simple solution, make it okay not to be perfect. We are all far from it, some people more then others ;-)
The main points to overcome this state are listed below:
Important note: Realize you or I or anyone cannot succeed in Forex or any type of trading for that matter if all possible objections must be overcome first. Perfection does not exist, sure you may get that one trade were you pick the absolute top or bottom, but in reality how often does it come when you strive for it? Actually you will find it in Forex when you are just being loose and following your rules, not when you actively look for it.
Furthermore:
"*In trading with a plan, its better to be boldly decisive and risk being wrong than to agonize at length and be right too late**
Here are the magical steps to get out of this negative loop.
1. Trading Forex is much like medicine part instinct and part science. It is truly an art-form. It is all probability based. However just like in medicine if you follow the frame work you will save the patient. 2. Trust yourself you have a money management plan in place to protect you. 3. Realize trading without losses is like trying to play guitar with only one hand, impossible! 4. Trust your high probability system(If you are missing any of these steps, no wonder you are stuck losing in Forex) 5.Test and retest your entry and exits using the formula I gave you in my Money Management E-book. 6. Know that no-one is perfect, make it okay to not be.
See the signal.....Feel confidant.....Execute and follow the plan.
Just Do It... These are the steps you need to get out of the negative state of perfectionism! A man is not judged by the amount of times he succeeds in Forex...but on the amount of times he fails and keeps trying!
Article Source: FxTradingStock.com
About the Author
Please Know, I Would Like To Invite You To Learn More About Forex Trading By Visiting MySite For Professional Traders, All Are Welcome, As A Gift For Visiting I am Offering A Professional Bank Trading System. Please VisitTomStrignano. For More Information on this topic please see Why Do We Look For The Perfect Trade.
by: Tom Strignano
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Word Count: 831
Date: Thu, 27 Jan 2011
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