Let’s get started…
- Embrace an open mind in trading
- What’s an edge in trading?
- The gift of an open analytical mind
- Accept to be proven wrong as ‘the norm’
- Make each trade an anecdote on the grand scheme
- The danger of dogmatism in picking a direction
- The nature of the market forces you to adapt
Embrace an open mind in Forex trading
In today’s self-reflection, I tell it as it is. It is perfectly fine to be periodically changing your mind in calling the directions in the Forex market. As a dynamic Forex trader, I find the ability to change the thesis on a constant basis a gift that must be fully embraced.
What’s an edge in Forex trading?
Let’s start from the basics. I refer to finding an edge in the Forex market as nothing more than a positive expectancy of an outcome over another in a large enough sample of trades. However, finding an edge is not as easy as it sounds. It takes perfecting one’s focus, analytical skills, psychology, understanding of statistics, passion, discipline, humility, grit or determination, just to name a few.
The gift of an open analytical mind in Forex
This article will solely focus on the analytical aspect, which is what’s most palpable to my followers on YouTube. As they know, most of my public display on behalf of Global Prime is technically-oriented, so it it perfectly fitting and resonant that I tackle this very topic.
if from the perspective of an external bystander, you get overly fixated in a simplistic approach (buy or sell), this article is for you. In other words, if you are the type of trader who doesn’t see the value I offer when I produce daily videos, and the only thing that matters to you is whether or not the direction will be called correctly, this article can be quite enlightening as a wake-up call to stop being so short-sighted, which is by and large, irrelevant to your success as a trader.
Accept to be proven wrong as ‘the norm’
Whenever I scan through the Forex markets, what I am always most focused on, is the process in order to formulate an idea. Even when I have a strongly-held opinion, I will still let the lower time-frames confirm if such a premise is valid via a trigger setup. I wholeheartedly embrace the scenario that the market can always prove me wrong.
Strong opinions are necessary to enter trades with conviction, but that’s just half of the equation. Accepting that you can always be wrong opens up your mind to accepting all the broad range of possibilities that may transpire in any given trade. Let’s not forget that the market is random by its very nature in the near term. It is only when we apply a proven edge that we then let statistics to work its magic overtime.
See each Forex trade as an anecdote
Assuming that as a trader we keep risk management under control, it should be seen as an anecdote whether or not our trades go for a win or a loss. It’s only when as a trader we over-leverage that suffering a loss becomes way more meaningful and hard to ignore.
This is because, in percentage terms, it takes progressively higher returns to make back what you’ve already lost. And don’t get me started when traders accumulate a string of losses. It can quickly snowball into a slippery slope that one finds hard to recover for the very reason I just stated. If one loses 50% of the account, you now have to make back 100% just to go back to break even.
The danger of dogmatism in picking Forex trades
When it comes to my own trading, if by the next few hours or the next day, as part of conducting the Forex market analysis, I am presented with new information as it relates to market structures and momentum, I will have no problem adapting to it. It is such a gift to be given the opportunity to re-assess one’s hypothesis. Being married to one direction is self-limiting. Call it objectively as your system indicates.
The point I am trying to get across is this. Why would you want to be dogmatic with a trading position? To sound smart, to show off, or project a certain image? Those that really get it, they know the gift that exists in being in a position yet being constantly on guard to re-appraise and re-formulate earlier thesis when necessary.
The Forex market forces us to adapt
The traders that make it by becoming consistently profitable have unquestionably recognised the benefits of randomness. They are, without hesitation, accepting that the randomness of the markets force them to be agile and flexible in their held-views.
I like to think of the existence of two classes of forecasters. Those who don’t know, and those who don’t know they don’t know. As a trader, I fall under the former because I accept that it is all a game of probabilities, which implies nothing is certain on a trade by trade basis.
So to conclude, this article and the accompanying video, is a self-reflection of my personal belief as it relates to why being in a state of constant reassessment of market conditions is such a powerful approach. It keeps me humble and I accept that it is not me but the market to always be the ultimate teller of my thesis.