“You, as a private trader, have no boss to take you off a sinking ship and put you into a lifeboat. Nobody will step in to help you maximise a winner or exit a losing trade. Your ability to handle risk and take the tough decisions is what will make you a successful trader. If you copy the institutional traders you will be washed out of the market very quickly because you cannot have losses like them. This is one of the most fundamental differences between yourself and company traders. It is your major weakness, and only by acknowledging and confronting it can you overcome this handicap.”
"Humility means you understand and acknowledge that other people in the market know much more than you know. They understand what is happening in the business for a particular company. Other people understand what is happening in the economy, or in government. Other people have much better analysis skills, or much better information. It is not possible to personally develop this knowledge. You cannot be smarter than the market or the people in the market.
Humility means you appreciate their knowledge and you learn to follow their conclusions in the market. All of their information and analysis skill is revealed in the chart of price activity. Every day intelligent people buy and sell in the market. You measure their knowledge and opinion by watching the price activity."
True words. That’s the problem with most of the traders. They enter forex trading thinking it’s a very easy thing to do without realizing that it takes months and months of hard work, dedication, and patience to get the facts cleared.
If you’re early on in your career and they give you a choice between a great mentor or higher pay, take the mentor every time. It’s not even close. And don’t even think about leaving that mentor until your learning curve peaks.
Thanks for the quotes! I believe that such motivation is needed when you have a stressed forex trading career. I have seen that most traders spend their time focusing on how they can make money instead of focusing on how they can improve and do better for a long time.
Thankyou for that I haven’t added to this for some time, not because there is nothing to add, but because I felt it was of little interest/help to anyone.
I believe that short, to the point, thoughts can help focus on specific issues which, over time, helps to build a better trading experience.
It is very important to stay focused on the longer term. It helps remind that trading capital is a finite commodity and when it is blown it is all over. Manage risk, manage loss potential, don’t over trade, don’t revenge trade, and don¨t try to win back losses.
Losses are part of the picture. Every trader has a net result: profits - losses. So the aim is entirely and simply just to ensure the wins exceed the losses.
I personally (and I’m sure many other forum lurkers like myself) find your posts on Babypips and the quotes here in your thread are incredibly helpful!
I wanted to jump in and to give you my thanks also!
Thank you for that @PhillR. It is very encouraging, as a veteran trader, to think one might have something to offer others still in the early stages of their travels in trading.
I think it’s easy to forget about the long term. It’s so easy fall into the greed trap. “Oh man, I know exactly how price is about to move. I’m gonna be rich!!! I better put more money on this trade because I’m gonna regret later if I don’t…” Bam! There goes 50% of your account.
Been there, don’t that, got the tshirt. When I have a string of losses, I usually start scaling back my risk. Just until I can get my mind back on track. Once, I’m making sound decisions again, I slowly increase risk up to 1% again.
It’s easy to get caught up on the short term, and forget about consistent profits. We want a lottery ticket instead. But lottery tickets aren’t sustainable or replicable.
I just called in to thank you for replying to these posts
I would add here some words about your above quote. I agree that one should listen to one’s good judgement.
But I think the regretted trades are often ultimately more to do with position size than ego.
It might seem strange at first, but I think a too small position size is as bad as a too large position size!
When the position size is too large, it is obvious that one will often be unable to resist closing it prematurely when in profit as it will be an “abnormally” good amount. Similarly, one might cut it early when in a loss before it reaches an otherwise sensible SL just because the amount is scary!
But trading too small position size is also dangerous. It tempts us to take trades that are not always good judgement simply because the risk of loss is so small. This leads into trading positions that are more like entertainment punts, like playing cards, Although this does not lead to financial damage, it can lead to damaged confidence when too many go wrong.
It is good to always ask oneself “would I put a normal trade size on here?”. If the answer is no then it is most likely not a good judgement trade at all, rather, it is a speculative gamble!
I don’t mean that one shouldn’t ever take a gamble trade - just that one should always know that it is a gamble trade!!
Take care and good luck, and thanks again for your posts!
Academic credentials, degrees, reputations, even a high I.Q. don’t make you right in this environment as they would in society. Traders, acting on their belief in the future by putting on a trade, are the only force that can act on prices to make them move. Movement creates opportunity to make money, and making money is what trading is all about.
You have to identify your weaknesses and work to change. Keep a trading diary – write down your reasons for entering and exiting every trade. Look for repetitive patterns of success and failure.
