I know a trader, let’s call him Leon. He is Forex trading. He has been actively trading for several years. His profits are erratic and undependable, often going dramatically up and down during the same day. When Leon is making money his confidence soars and he feels like he is a power trader. On the other hand, when he loses money, he feels like a failure, a loser and stupid. For quite some time Leon has wondered why he can’t be consistently successful, and why his draw-downs tend to be much larger than his profits. He wonders this even though he has no business trading plan, doesn’t consistently document his trades and despite having numerous rules, tends to violate them regularly. Leon doesn’t have a clue and wonders why he can’t get different results even though he continues with this pattern of behavior, in fact, Leon is out of control and unless he changes he is headed for a financial ice-cold shower. Are you Leon?
If you want to change your behavior, you must first change your thinking and since much of your thinking is driven by your unconscious, you must become aware of your underlying self-sabotaging beliefs that drive thinking, emotions and destructive behavior. Forex trading is working with money, it’s a serious business, and with every tick while in a trade you are either gaining or losing money. But, it goes beyond that.
Money is not only the cornerstone of our society, it is tied up in your identity. If you are winning it, you often feel powerful, competent and intelligent and if you are losing you feel the opposite.
The fact of the matter is that when you are Forex trading you invariably are expressing yourself; whether you want to, try to or feel a need to, it doesn’t matter, you are and will express yourself. And, when expressing yourself your behavior is tied much of the time to unconscious beliefs. Actually, when you are in the markets, every blemish, weakness and character flaw in your personality will be challenged, called out and tested. Now, that doesn’t mean that the markets are doing that to you, on the contrary, the markets have no intention for you – even though you may have often wondered how the markets knew that you just placed a long trade and how they chose that exact moment to fall; there are no rewards, punishments, pain or risk in the markets, only consequences.
You can’t change what you can’t face and you can’t face what you don’t know. Awareness is key in Forex trading. The more aware you are of your underlying self-sabotaging beliefs the more successful you are. Now, you might be asking; how do I do that? How do I become more aware if these limiting beliefs are unconscious. You become aware by simply asking questions of yourself, and by personal observation as you are going through market observation. By checking yourself and checking the market you’ll begin to gain an awareness of the importance of a Business Trade Plan or changing the one you have if the one you are following is failing are or failing to document in it. Why you are continuing to do things that you say you must stop doing; and why you are failing to do those very things that you say you must do. Once you identify the underlying self-sabotaging data, you can begin to deal with them, one issue at a time
So, trading is a journey in self-discovery, and you must begin to pull back the layers of your unconscious, one at a time to begin to realize and recognize what is motivating you to a behavior that is producing results that you don’t want. There are essentially two kinds of data with respect to trading. Many traders miss this fact and therefore miss a very important set of variables that impact heavily upon their trading. One type of data is mechanical data, which are everything that have to do with the markets; that being, news, technical analysis, instruments, indicators, etc.. This data is external to you. The next type of data is internal data, which are everything that have to do with your thoughts, emotions and behavior; You must manage this two kinds of data in order to manage your results.
Forex trading is a 100% a mental and emotional game, regardless you are preparing, analyzing, processing or executing while trading; all of which require mental and emotional tools. If you don’t have mental and emotional tools, you will lose your way. You must become aware of what is between you and keeping commitments. In mastering the mental game it will teach you tools and techniques to put the steering into your trading while helping you to remove the blindfolds. Remember, you can’t change what you can’t face, and you can’t face what you don’t know.