Learning to Deal With Disappointment in the Forex Markets

Filed under: Learn Forex Trading |

An aspect of forex trading that is not often discussed is that of learning to deal with the inevitable disappointments of losing trades and unfilled orders. Most vendors and teachers focus on the positives of trading, and often try to whip up their potential clients into a trading frenzy. However, contrary to this, trading should be all about controlling your emotions and trying not to feel either elated or disappointed – but to simply go about your business. I once read about a great trader who would lose or gain millions and his expression would not change one iota, but he would simply go on with his day-to-day conversations as if nothing had happened. This is the mindset that you must have as a trader – otherwise, your emotions will take over and you will make bad trading decisions.

 

Let’s take today’s trade example. I put an order in, and had the market moved down just a few more pips, my order would have been filled and the target quickly met for a 2% rise on the bank. This was slightly disappointing, but I tried to treat it as just another entry on my balance sheet (that of order unfilled). If I had dwelled on this unfilled order, I may have been tempted to enter the market at the market price next time rather than put an order in; and this could have a really negative impact on my long term trading capital.

 

What is important in forex trading is to have a plan and to stick to that plan over a long series of trades. If after a long series of trades, you find that you have no market edge, then you obviously need to go back to the drawing board! But if your method has been proven to have an edge, then stick to that method whenever things seem to get choppy. This is a much better way to try to play the markets rather than tweaking your system after every little disappointment. In summary, try to learn to control any disappointments that you have when trading, otherwise, they may come back to haunt you.

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