Do you feel bad when you have a losing trade in Forex?
If so, knowing what goes on in the mind of a consistently winning Forex trader may reduce that bad feeling.
This time, we will explain “a certain way of thinking” that is more important than earning money and is valued by winning Forex traders.
What is the “purpose” of your trade?
What is the purpose of your trading?
“To make money with Forex, of course!” but what do you think when you hear that this is a source of mistake?
However, the desire to “make money with Forex! is a very important motivation for success, so there is no need to ignore it or dismiss it as a bad idea.
However, the desire to “make money with Forex! is something you should be aware of when you set a long-term goal or vision, not when you are trading in front of you.
Don’t get caught up in the short-term desire for money right now
When you are facing the charts and trading, the fact that you want to make money now means that you are caught up in the short-term desire for money right now.
When people are caught up in short-term desires, they are unable to make rational decisions and tend to act emotionally.
This has been proven in brain science and is one of the basic mechanisms for human survival.
And as the prospect theory proves, these emotional behaviors are going to hurt you in forex.
As a result, your desire to earn money is not satisfied and you end up frustrated and stressed.
Simply put, it means that people have a stronger desire not to lose money than to gain.
This leads to quick profit-taking and slow loss-taking, which naturally leads to cases of missing profits and incurring large losses, and is the reason why many market participants lose.
Glossary behavioral finance theory (behavioral economics)
Make it about “doing the right thing.”
If you can’t trade in Forex while trying to make money, what should you do?
That is, change the objective of the trade in front of you from “to make money” to “to take the right action”.
In other words, regardless of whether you win or lose the trade, focus on whether or not you did what you were supposed to do.
Even if you win the trade in front of you, it is a “bad trade” if it is not the result of the “correct action” that you should have taken.
Conversely, if you end up losing a trade, but the losing trade is the result of your “correct action,” it is a “good trade”.
What does “right action” look like?
So what is this “correct behavior”?
It is “actions in accordance with your trading rules.
Following the rules that determine at what point in the chart, what kind of technical analysis to use, when to enter the market, and when to take profits or cut losses is what “correct action” is all about.
What if we compare it to a road trip?
Let’s compare forex trading to “going on a road trip”.
The purpose of the road trip is to go to the destination sightseeing spot and enjoy yourself there to the fullest.
However, your mind is filled with the desire to get to the destination and have fun as soon as possible, and you are impatient and nervous while driving the car.
You are driving as fast as you can to get to your destination as quickly as possible, so you push down on the accelerator pedal as hard as you can to make your car go as fast as possible.
Then what will happen?
Eventually you will hit another car or pedestrian and cause an accident, which can be very serious.
Other times, you might stall and get stuck, not realizing that you were low on gas, or you might get a flat tire due to low tire pressure.
Of course, there is also the possibility of getting caught by the police for speeding.
If you are emotionally attached to getting to your destination as quickly as possible, you will not be able to notice things that you would normally notice, and you will attract trouble of your own.
What if I choose to do the “right thing” and take a road trip?
So what would a road trip with the “right behavior” look like?
Your main goal is to get to your destination and enjoy the sights.
But while driving, you forget about that and concentrate on “driving according to the traffic rules.
This is because that is the “proper” way to drive a car.
Traffic rules require a “pre-driving inspection,” so before you leave the car, open the hood and check the oil and brake fluid, tire pressure, etc.
Of course, you must also make sure that the headlights and brake lights are working properly.
Once behind the wheel, we drive safely, obeying all traffic signals and signs.
Although you may run into a number of red lights on the way to your destination, do not get frustrated, saying, “I can’t reach my destination with this kind of driving,” but concentrate on driving, thinking, “I obeyed the red light properly, so I’m OK”.
Sure, I want to get to my destination as quickly as possible, but the important thing is, “Am I doing the right thing?” That is what is important. That is all I concentrate on while driving.
We arrived at our destination safely and were able to enjoy the sights to the fullest.
A good trader acts with the goal of “driving safely according to traffic rules”
As you can see from the road trip story, a consistently winning forex trader focuses on following his or her trading rules, not on winning or losing the trade in front of him or her.
As a result, they find themselves accumulating profits and achieving their main goal of “making money”.
In other words, “By following the rules of the road and driving safely, you will arrive at your destination safely,” which is also practiced in FX trading.
Many forex traders say, “It’s not good to start worrying about the profit and loss figures of your positions,” and I agree with them.
When you start worrying about the profit and loss figures, you are focusing on the profit and loss in front of you, not on the correctness of your actions, and that is “a thinking pattern that will not win in the long run”.
What you should be concerned about is, “Are my thoughts and actions deviating from the rules?” and to hone the skill of noticing this.
This “skill of noticing one’s own thoughts and actions” is a very important skill to keep winning in FX over the long term.
For more details, please refer to the following article.
Professional Forex traders’ important ideas – summary
A good forex trader who is consistently winning does not care about the result of a single trade in front of him.
All that matters is whether or not they followed the rules of the trade correctly.
Even if you lose, it is still a good trade as long as it is the result of correct action. This is because they understand from the bottom of their hearts that as long as they repeat such nice trades, they will accumulate profits.
Please refer to the article that explains this from a different angle.
If you do not have a set of trading rules that will serve as a “correct code of conduct” to begin with, I recommend that you start by learning the basics systematically.
This is the time to “hurry up and get going.
Instead of wasting your mind and money by repeatedly trading unnecessarily, I think you need to take your time and spend time learning.
When you look back in the future, you will surely think, “It was a good thing that I concentrated on my studies at that time.
These are the ideas that professional Forex traders value. I told you about what is more important than earning money.
Related FXのメンタル関連用語の意味と解説まとめ
We also recommend this article
