Aim for excellence with your Forex trading strategy
Trading is a precise business and occupation. In our industry we constantly have to deal with very small percentages and numbers. And the difference, between success and failure, in our retail trading industry, can be extremely small.
We may be risking only 0.5% of our account size per trade, we may have a circuit breaker built into our trading plan, whereby we stop trading on any given trading day, if we lose circa 1% of our account. We may aim for 1-2% account growth per week, an outstanding performance compared to many fund managers, but entirely realistic. We may only trade when the spread on offer is below 1 pip on, for example, EUR/USD, we may also use a form of slip protection or stop as a mechanism to limit our losses.
The overall point by using these examples, is to illustrate that we’re dealing with relatively small percentages in order to achieve positive expectancy and enjoy success. There’s very little room for error, but get these micro levels of adjustment wrong and we could invite losses. These elements of our trading require precision, we can’t be careless, or lack attention to detail, as even a small error of calculation can prove to be harmful to our overall profit projections. For example; we must stick to our plan, in terms of its risk per trade and perhaps the take profit limit orders, if we don’t then our strategy (and overall plan), can be thrown into chaos.
This attention to detail should be automatic, it should be embedded into the trading plan, which is our personal commitment to our profession. We have to concentrate on the trading elements within our control in order to aim for success. Whereas the elements outside of our control; mainly the (at times) completely random and unpredictable market movements, we have to accept we have no control over, but learn to deal with the consequences, as they present themselves.
Let’s visualize forex trading as two sides of an equation; we can put together a perfect mathematically precise, repetitious equation for ‘our side’ of the equation, but we can’t possibly do the same for the ‘other side’ of the equation; what the market offers up is outside of our control. We can only aim for excellence on our side of the equation and make our prudent decisions accordingly, we’ll never achieve perfection due to the random nature of the other side of the equation.
Many experienced traders will have transformed their trading into a fine art, they’ll repeat a winning strategy time after time, with complete confidence that any short term profitability deviations will be compensated over the medium to long term. Successful traders will also use many key phrases to describe their trading; “looking after the downside and the upside will take care of itself”, also perfectly illustrates the excellence reference and the side of our equation under our control.
It’s important that we never chastise ourselves for trades that go bad, or invite internal battles with ourselves, over experimental strategies that go wrong and this aspect of trading is another issue we have to contend with in our trading career. This conflicting affliction effects novice traders initially, until they become relaxed, regarding the other side of the equation we mentioned, which takes time, practice and experience. If we do everything correctly on our side of the equation then we’ve demonstrated excellence in terms of trading practice, that really is as good as it gets, because as we mentioned earlier; we’ll never experience trading perfection.