What lessons are we still struggling with in our FX trading? What do we still have to learn and what haven’t we learned after perhaps years of trying?

Trading the markets offers up an incredible insight into our own psychology and that of our peer group, a peer group that we often witness on forums suffering all kinds of self-imposed agonies in their struggles to become successful…

It’s hard to explain to friends, or close members of our family not involved in our ‘trading universe’ the psychological warfare we endure and expose ourselves to in the depths of our self-built trenches and in the recesses at the back of our mind, when we begin our trader journey.

It’s fair to say that, as self-employed retail traders, nothing actually prepares us for the battle we enter into when we first begin to trade and even experienced and successful traders couldn’t possibly prepare us for the trials of life we’ll endure. No matter how we attempt to describe it there is no template we could possibly use as successful traders in order to explain the various tortures we simply have to experience in order to become consistently profitable and successful.

However, there are lessons the market teaches us that, due to our own highly personal psychological makeup and cognitive dissonance, can take some time to address. Whilst no amount of suggesting that we simply defer to our trading plan and never violate it appears to help in many of these circumstances. In many ways it’s as if we are simply hard wired and biologically programmed not to be able to trade successfully and even moving up to, or on to automation, doesn’t necessarily tilt the process of trading profitably in our favour.

We couldn’t possibly list the countless problems we have with trading (some after years of trying) and then address each one individually whilst offering up suggestions for moving on. But what we can do is isolate several of the most common experiences and offer up some methods to attempt to counter these barriers. And it’s time to get tough on ourselves; this is time for tough love. It’s this simple; if we don’t address these types of issues we’ll never be successful and these are issues we should be able to conquer…

I’m still manually intervening and closing trades too early winners or losers

There is a psychological study which proves that we experience losses more deeply as ‘scars’ and we also tend to exaggerate our winners beyond the reality. This is a common experience that we’ll all be familiar with. After a couple of losses we feel relieved when we have a winner despite the fact that we may be down considerable pips having suffered two losses. If this pattern continues then we could end up digging ourselves a deep hole. In a series of ten trades we’d have six losses and four winners; it’s extremely unlikely that anyone could build a successful trading strategy from that data. So what is the solution? We’ll it’s as plain as the indicators on our chart; if we keep manually intervening to take profits early, due to the fear of losses, we will shred our account in double quick time.

I’m still trigger happy entering trades

There is little point in us spending time developing our strategy to then manually over ride it by clicking a buy or sell order too early. We’ve spent time developing our high probability method to enter the market and it has very specific parameters. If we enter too early we are literarily in no man’s land, not only is the entry comprised, but also the exit and trade control. This habit has to be broken and broken early as it is undoubtedly one of the most destructive forces that can work against us.

I can’t relax when I’m in the trade

If this is still proving a problem, after years of practice and engagement with the market, then beyond adjusting the risk and position size to the point where our hand palms don’t sweat, then there’s very little that’ll cure this situation other than having absolutely conviction in your overall strategy. Success comes with experience and hopefully, as both increase, a relaxed frame of mind will develop.

I can’t accept that the market gives and then takes away

Once we’ve reached the stage in our development that we accept how probabilities and strict money management affects our trading we stop viewing the market as a battle ground and more as a level playing field that offers up opportunities. It isn’t the enemy, it isn’t out to get us, the market ebbs and flows in relation to the sentiment underpinning the market. In simple terms it’s our task to ensure that we match that pattern in order to take profit out of the market.

I still have unrealistic ambitions regarding account growth

This issue is arguably the easiest amongst our failings to put right as it simply requires attaching a realistic, but ambitious target, to our overall trading strategy. And we’d suggest that traders should be aiming for 100% account growth. This breaks down to 8% per month and 2% per week and couldn’t be further apart from the totally unrealistic targets we see championed on various websites and forums where account growth of 2% per trade, or per day, is often mentioned.

One simple adjustment to our risk modelling means we can’t possibly gain 2% per day each day if we are a swing trader. If we are to risk 0.5% per trade then how could we possibly make gains of 2% per day? That simple admission and realisation should wake us up to the fact of what is achievable and what isn’t.

I still don’t accept that fundamentals move the market

Interest rates. Monetary policy. Fiscal policy, Currency competitiveness through its economy, understanding how an economic model works and its affects on a country’s domestic currency. Government stability and policy towards its citizens and its policy towards foreigners. Rules and regulations placed by the government on its financial sector…these are just some of the factors that affect currency movements. The quicker we accept it the sooner success arrives.

There are countless other lessons we need to learn and here’s just a few..

* I still haven’t learned that big profits require a big trading account.
* I still haven’t learned that you can’t buck the system.
* I still haven’t realised that technical analysis maybe a fallacy.
* I still haven’t learned that 100% performance is never possible over a sustained period

However, this time we are not going to offer up the solutions, our readers are going to solve their own problems. And if you’d like to share your experiences with us we’d be delighted to engage in conversation with you through our comments section, either on how you finally learned those crucial lessons barring your way to success, or any other issues you may have experienced along the way.