Every trader has a mental capacity. Trading is mentally and emotionally very intense, and every trader needs to know and stay within their limits. Many in the securities trading world understands that successful traders exhibit the same qualities as elite athletes.
Their focus is extraordinarily strong, they understand how to hand rigorous mentally and emotionally draining activities, and they are determined to win at the end. And most importantly, they know how to get back up after they fall to rise above the rest.
Here are some ways to stay sane as you do your trading on a daily basis.
First recognize that we all have mental limits. There is only so much intense activity that we can do on an optimal level at a time. So understand where your limits are and know when to quit when you begin to lose your sharp edge.
Secondly, keep things very simple. Too many traders try to use very complex and hard to understand and execute strategies and systems for their trading. The underlying strategy might be good. But in the heat of battle, a complex strategy that is supposed to work maybe failed to be executed well enough to succeed. So keep this matra of KISS: keep it simple stupid.
If you can keep your strategy simple, you have the best changes to executing it well. In addition, you have the added benefit of it not killing you to execute on a daily basis. You need a trading strategy and system that is sustainable over the long term.
If you’re strategy makes you exhausted after every trade, then it’ll probably not be sustainable and you won’t be able to manage it. If you’re going to do this forex investment game, you want to stay alive for the long haul.
So, again, keep it simple. Trade only one or two trading pairs at a time. If you do trade two currency pairs, make sure they talk to each other. What I mean is that make sure they are related somehow.
For example, if you think the AUD/USD will somehow affect the CAD/EUR for whatever reason, that’s a good reason to trade both. But if they are significantly mutually exclusive at any given time, it may not be smart to have to mental tracks at one time.
Lastly, practice. The reason an elite athlete can handle and overcome in the intensity of the moment is because they practiced and built up their tolerance and expanded their limitations. If you haven’t already, get a forex demo account to practice before you start. It may not be the same thing as trading real cash, but that doesn’t stop the athlete from getting up at 5am to run 5 miles everyday.
{ 0 comments }