In poker they call it "tilt" when poker players let their emotions cloud their poker judgment. Traders suffer from tilt as well. In fact, statistics show that 90% of trading is learning to control your emotions.
Alex Honnold, the record-breaking free solo climber, said "There is no adrenaline rush...if I get a rush, it means that something has gone horribly wrong...the whole thing should be pretty slow and controlled."
The exact same thing can be said about trading. If you are trading correctly, you should not feel your adrenaline flowing as the market moves up or down. You should be calmly watching as the price moves towards your target price, as you take your profit, and as you exit the market. Why? Because the whole process was expected, planned and executed as planned.
There are a number of ways one can learn to control emotions. The one that makes the most sense is to get proper training so that you gain the correct knowledge and experience. In other words, you know what you're doing. Your trades are executed based on a solid understanding of price action in a particular market.
The emotion free trader works from a base of trading rules. Just as the emotion free gamer does. By working from this core set of rules the trader or gamer can identify a solid trade or play. As experience develops both understand winning scenarios versus losing scenarios.
The traders number one rule "always look for reasons not to place a trade."
As logical as it sounds, the reality is that most folks do not follow this common sense approach. In fact, 9 out of 10 people attempt to become successful traders by following the gambler's approach. A simple definition of the gambler's approach is attempting to find some process or tool that will allow the trader to make the quickest profit with the least amount of effort. It really does defy common sense that someone would be able to buy something for a few hundred bucks that would allow them to make huge profits with little to no effort.
But go on the internet right now and you will find hundreds if not thousands of trading products selling this concept. The unfortunate part of this real-world situation is that 90% of those folks who call themselves traders purchase these products. Even worse, they purchase a number of these products before reality sinks in.
The rational is "well, it is just a few hundred dollars." I will give it a try and hope I am lucky. Those two words are the foundation of the gambling trader's mantra, "hope and luck."
The skilled trader relies on knowledge and experience which we all know takes some time to obtain.
Just as the solid poker player seeks out training, mentoring and coaching to avoid making common gambler mistakes, the solid forex trader needs to pursue the same path.
A simple rule of thumb to follow to become a solid forex trader, do not do what the losing 90% are doing. Do what the winning 10% are doing. If it sounds to good to be true, it is!
There are no such things as secrets to becoming a solid forex trader. The solid forex trader pursues the same path you would take to become proficient at any discipline. Get professional training.
To learn more visit http://www.theforextradinginstitute.com/
Steve is a professional trader who has been training traders for over a decade.
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