Obstacle All Forex Traders Will Face
Forex Trading is one of the most difficult things someone can attempt to master. Once a person has traded for long enough they will encounter obstacles which all successful and consistent traders had to go through at some point. Knowing what these obstacles are and what to expect from them might help new traders when they encounter them. In this article, we will take a closer look at one prominent Obstacle All Forex Traders Will Face in their trading. That is Fear.
The Number 1 Obstacle Forex Traders Will Face : Fear
Fear is definitely a very challenging Obstacle all Forex Traders Will Face. Even the toughest of traders out there had to deal with the aspect of Fear at some point in their trading. Now, I realize to beginner traders the concept of Fear affecting their trading is outlandish.
However, that is only because their understanding of Fear is limited. When we talk about Fear in trading we are not talking about the same fear as being fearful of spiders or snakes or heights. The Fear we are alluding to in trading goes far deeper than a mere superficial fright.
Fear of losing
Fear in trading can take many different shapes and forms. Once a trader has experienced a losing streak, they have no doubt experienced this Fear in action. After one or two or even three losing trades in a row most traders would not be too concerned. However, what happens when they have a fourth or fifth or sixth losing trade in a row?
At this stage, Fear starts to set in for most traders. When a perfectly good and acceptable trade presents itself, the trader now start to find excuses not to trade. They go outside their normal way of trading to try and find a reason why placing the trade is not a good idea. Fear is keeping them from pulling the trigger.
This can be remedied by simply seeing losing trades for what they really are, a necessary part of trading. Having losing trades is exactly the same as a transport company that has to pay for filling their trucks with fuel, it is a necessary part of their business. In the same way losses should be seen as a necessary part of trading.
Also, losing streaks will only bring bad emotions into play when a trader has not fully accepted the statistical part of trading. Statistics have proven that losing streaks is something you WILL encounter as a trader. Thus prepare yourself mentally for those scenarios before they happen. Accepting that not all your trades can be winners is a tough obstacle all Forex Traders will face.
Fear of failure
Another form of fear will cause traders to constantly find themselves in bad and losing trades. These traders know their system, they know the entries and exits, they also know management and risk management. However, they still find themselves in bad trades. This trader normally also exits losing trades too late and get out of winning trades too soon. This happens because the trader has a fear of being wrong.
They are so afraid that their analysis of the market is wrong that they will bend and break all their rules to enter bad trades and keep out of good ones. They have allowed the fear of being wrong to affect their trading.
The fear of being wrong can be overcome quite quickly if a trader understands one simple thing. The market will do whatever it wants, whenever it wants for how long it wants. Even though a trader has done all of his analysis correctly and have every signal giving him the green light to trade, he can still have a losing trade. No individual trade should ever be able to make or break a trader if they follow their money management correctly. Thus, there is no need to fear being wrong.
If you have not learnt the importance of proper Risk and Money Management make sure to check out our Forex Training Courses.
Fear of missing out
A third form of fear is the fear of missing out of that big trade or monster payout. Seasoned traders have outgrown this fear simply because they have come to grips with the fact that no one trade will every make them or break them. True trading success is achieving consistent results, and doing so over long extended periods of time. The super traders you read about in magazines who boast of million dollar profits per trade are the exception and not the rule.
Those traders might have made it big with that one miracle trade, but that does not mean it happens every day or with every trader out there. Those that understand this does not continuously jump into trades too soon because they no longer have a fear of missing out. They know there will always be another day and another trade.
This challenge is something I struggled with for quite some time in my own trading. It will be different for every trader, but this fear is something I still have challenges with to this day. Most traders know that there is always an opportunity in the market if you just know where to look. For some traders, this poses a problem because they always feel like there is something happening that they are not aware of. Others, who have overcome this fear, know that there is always opportunities and thus do not worry about missing out today as there will always be other possible trades tomorrow.
Although it is simple to acknowledge these obstacles it is always more difficult to correct or overcome them. The solutions provided does not pretend to be the final or only solution to these challenges, but they have worked for some traders and might help others as well.
Every trader might experience fear differently, but it is definitely an obstacle all Forex Traders will Face. Each trader needs to evaluate their trading success and when they confirm that fear is interfering in their trading they should find ways to control it. We use the word control because in my opinion one will never be able to completely eliminate these fears. Rather, we learn to identify when they are creeping in and manage them before they control you.