11 Juli 2013
Trading Mindsets and Forex Trading
Your mindset, that characteristic mental attitude that determines how you will interpret and respond to situations will determine the type of profits that you make in the forex market. You can choose to be an independent Trader or a Dependent Trader. The type of trader you are affects the potential of instant profits that you make in the forex market. Rather, it would not be an exaggeration to say that it could affect the way you live the rest of your life: how long you will keep working for someone else, how and when you take vacations or how and where you live.
Let us be frank about it. It is only those who take the initiative can change the way they live. To quote an old saying, it is only those who jump in the water will reach the other shore, those who sit on the shore and keep contemplating will always remain where they are.
Remember that anything that requires little or no effort produces limited or temporary results. The opposite is also true: things that require you to think and act lead to permanent and lasting results. This is truer when it is applied to forex trading or for that matter, to trading in any market.
That brings us back to the original point of trader mindsets. Which type of a trader are you: independent or dependent?
A dependent trader wants quick and instant profits without earning them the hard way. A dependent trader never wants to put in an effort, follows the crowd and initiates trades based on hot tips, that are available dime a dozen in any market. The dependent trader is also on the lookout for automated trading programs that promise the moon and make you a millionaire overnight. These types of traders trade without a plan, with no understanding of what they are doing. They listen to news programs airing expert views and initiates ‘can not lose’ trades. It is another matter that such trades do lose.
The end result of such traders is frustration and they eventually do the only thing that is in their hands: they give up. What they do not realize is that all they had been doing all this time was nothing more that investing in lottery tickets, where the odds are heavily stacked against them, with the hope that they will one day get lucky and hit the jackpot.
Dependent traders neither have control over their lives nor do they have a chance for financial success.
Independent may be the opposite of dependent but an independent trader is not exactly the opposite of a dependent trader. There is a little bit of dependence in everyone but an independent trader uses that little bit of dependence to seek help and learn from others. Independent traders are workers; they work for everything they want. Either they know or they make an effort to know. They will go out of the way to seek people who can educate them.
Independent traders are not afraid to make mistakes because they know one can learn from one’s mistakes. At the same time they try their best not to repeat their mistakes.
Whereas an independent trader will depend on a mentor and/or learn form education to take control of situations, a dependent trader will never do that.
If you want to change your mindset and become an independent trader in the forex market here is what you should try to do.
1. Think of a trading plan and execute it. Select before hand what you want to be. See what fits in your daily work schedule and decide whether you want to be a day trader or end-of-the day trader or do you want to trade once a week. Then select what sources fit your plan the best. Never ever try to apply day trading techniques to end-of-the day trading or the other way round. They are not interchangeable at all and if you do you will discover that it does not work that way.
2. Try to educate yourself. You can look for education sources. Better to search more than one, preferably 2 or three, reputable sources. We can suggest well known and trustworthy names but the idea is that you identify them yourself and make an intelligent choice. Learn the techniques meant for your trading plan but also learn to apply them on your own.
3. Do not depend upon only one method of trading. Learn different trading methods and check them out. Your success is not guaranteed unless you have some basic understanding of trading methodologies, especially when using fundamental or technical indicators.
In the markets you can lose money very easily and quickly. You will gain nothing but frustration from losing money like that. Instead invest in yourself and gain knowledge. This can be your trading education cost which will bring you instant profits in the forex marketing.