Like most forex traders I have always believed, at least on a passive basis, that our psychology or thought process does play a fairly large role in whether or not we are successful on a long term basis. You hear it over and over again that “you need the right psychology in order to be successful at trading”. But what does this really mean? To be honest I have never really taken the time or put forth sufficient effort to investigate this whole trading psychology business, or how one should possibly change their thinking in order to improve their trading results.
Yes I know that having a sound trading plan, discipline, patience and proper money management are essential. But what I am talking about goes way beyond these principles. Can our actual thought processes, or the way we think mean the difference between attaining success in the forex markets, or joining the ranks of the other 95% who fail?
Another good question; are successful traders born with the proper thought processes or is this something that can this be learned? Are we stuck with the thought processes that are hard wired into or brains, and ingrained in us by all the conditioning we have absorbed since childhood, or can we learn to change these thought processes so that they are conducive to success as a trader?
I think these are all compelling questions, and any aspiring forex trader would do well to give them some serious thought. As forex traders we are always so wrapped up in whether our forex system or method is going to lead us to our trading goals. But I don’t think most of us ever really stop to think that maybe our trading system or method actually has very little to do with our level of success. For example, many aspiring traders endlessly jump from one system to the next because that “holy grail” forex system is just around the corner. The sad reality is that most will never find success because they are looking for something that doesn’t exist and the key is really between our ears, our thought process.
I recently finished reading a book called “Trading in the Zone” by the well known author Mark Douglas, and I must say it really took the blinders off for me to a certain degree. In the book Mr. Douglas explains in a clear manner how 99% of us, come to trading with thought processes that are almost certain to ensure we will fail. It isn’t our fault. These same thought processes work very well for us in everyday life, and have essentially been engrained in us from an early age. But when it comes to the reality of trading, these same thought processes actually cause us to sabotage ourselves. Until we can really identify this problem and learn to train our minds, we can have the best trading system or method in the world, but we will likely not be successful long term.
Mr. Douglas essentially comes from the premise that trading offers unlimited and complete freedom for creativity and freedom of choice. There is unlimited potential for profit and unlimited potential for loss. The markets offer limitless and endless choices. Our brains are not wired or accustomed to operating in a realm where there are no bounds, constraints or rules. And this is why most ultimately fail.
These are somewhat tricky concepts to relay and I am probably not doing the book justice so I will let you hear it from Mr. Douglas himself in this short video below:
If you really want to better understand how your thought process may be holding you back from reaching your forex trading goals then I would highly recommend giving the book “Trading in the Zone” by Mark Douglas a read.
While the proper thought process or psychology is essential, having a sound trading plan that will provide you with a statistical edge over the long term is also necessary.
I believe that Price Action trading is something that can provide that edge. If Price Action Forex Trading is something that appeals to you I would highly recommend checking out DNB Forex Price Action Membership. I have been a member of the DNB Price Action War Room for quite some time now and I can honestly say if you are serious about trading forex, the low one time membership fee is totally worth it.
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