This lesson teaches you how to avoid self-sabotage and attain the winning mental attitude required to become a successful FX trader. This is the first part of a three part lesson. This is a very important part of the fx education.
Traits of Successful and Unsuccessful Traders
Successful traders don’t have access to better information, trading models or broking facilities than losing traders. Their edge is mental: decisiveness, ability to be comfortable with uncertainty and responsibility for their own trading outcomes. They transcend the focus on money with attendant emotions of greed and fear, and see trading as a challenge and a game.
Losing traders typically wait for confirmation from others before they act, and want a broker to hold their hand. They do not use a tested model, but instead try to second guess the market and trade by the seat of their pants, or buy someone else’s trading model. They don’t manage risk or use stop losses and have unrealistic profit targets. When they lose, they typically look for someone to blame and avoid responsibility for their own actions.
The FX market is not the place to find out what type of person you are, but will quickly and ruthlessly reveal your true character and expose your limitations. Hopefully you will do the homework of working on your psyche before starting to trade.
Self sabotage is when an FX trader unconsciously acts against their own best interest, and sabotages their opportunity for success. This is often very deep rooted, and stems from low self esteem.
Since FX trading offers an opportunity for financial success and the associated rewards, the unsuccessful trader feels that they don’t deserve success. Alternatively, when they do experience some success they may find this an uncomfortable change of circumstances – for example they may feel more comfortable relating to people on their own financial plane.
Whilst having an outward desire for change, they have an inward desire to remain the same. This leads to poor trading performance, because the trader unconsciously sabotages their own trading in order to avoid change. The way to eliminate self sabotage is to resolve the conflict.
The human mind works very quickly but logically, similarly to a computer. Like with a computer, garbage in equals garbage out. To resolve internal conflict, it is necessary to uncover the underlying false beliefs and replace them with new correct beliefs. This is something that a winning trader will spend time doing through reading, introspection, and perhaps working with a psychologist. A losing trader won’t do this work.