Know Yourself… It’s just You and the Markets
- By FXT
- November 15, 2022
- FXT Analysis
As you set up to trade, the phone rings, emails flow in and your workload is piling up behind you. Your family are wanting your time since you are ‘finished work’, but you still have to hustle if you want to get ahead. Staying on the grind, you open up your charts and seek opportunities to lay your hands on, but the surroundings are tumultuous and your mind is uneasy. As you the market rushes upwards, your hand shakes, as you enter the trade. Success, it quickly goes into profit, but you are uncertain and unclear, so as quickly as you enter profit you exit your trade. The market goes on to rally higher and higher as you finish the day satisfied yet frustrated at the same time.
The market favours no trader, it is simply a collection of each trader’s bias, thoughts, emotions and decisions along with financial capacity to play the game. There is no room for ego, for the market will wash it away. There is no room for greed nor fear. It simply exists as a financial instrument depicting a market that many are investing in, trading and working within.
Understanding the market is one thing, and of course, extremely important. But there is another aspect to consider, that is you, the trader. It’s just you and the market, as you take in news, insights, studies and other material throughout your day to help your trading, you must use what you have to be successful. You are the asset, you will be the one to make the decisions and call the shots.
So how do you look after yourself, the asset, as though it is (which it is) the thing that is out on the hunt for income in the financial and virtual world. MetaTrader 4 is your hunting ground, and the markets are the bounty. Your decisions make or break ‘the hunt’ and your attributes will be responsible for the day’s takings. There are several things that can be done to maintain peak performance for ‘the hunt’ in the virtual financial world.
Sharpening Your Mental State
Mental clarity and focus is critical for being in your peak performance state during trading hours. People often take up meditation or yoga, going for a bike ride, playing music or reading a book with a nice cup of tea, to calm the mind and clear out any unwanted emotional states that may impact trading. Some people like to take brain health supplements known as Nootropics, chew gum to create mastication (chewing) which stimulates the hippocampus, which supports learning and memory formation.
Control Your Emotions
Trading is tough on the emotions if you aren’t careful. Making and losing money isn’t for the faint of heart. That is why controlling your emotional state is critical, particularly while you are trading. Emotions such as fear and greed are big players in many early traders as they learn how it feels to make money and want more, and fear of losing money can cause the heart to race and the mind to become flustered. Controlling these emotions is about understanding what you are in for when you go into a trade, having the risk set properly and ensuring you understand likely events either side of the trade you want to take. The FXT Trade Manager allows you to know the dollar risk you are going in for, and also the expected profit to target. Ways to control your emotions include healthy eating, physical fitness activities, meditation and calming the mind. Listening to calming meditative music can also be very useful.
Review Your History
If you have been trading for a while, you will have built up some trading history. This data is your trading account’s blood test, filled with all the key indicators of healthy trading. Reviewing your trading history and statistics will be vital to your success long term, constantly learning and adapting to your own skills and viewpoints and improving as you go.
Short term, you might see that you could be holding trades longer, stop trading at certain times of the day or even trade with different stop sizes. Looking over the trade history and reviewing the charts (what actually happened) can give you incredible insights into what you might consistently be missing out on. You will likely learn more about yourself while reviewing these trades.
In the long term, you might find you develop habits that can be redefined to improve your trading, but the first step is to identify them, so that you can then assess and fix what you are doing.
Keeping data and holding your track record is essential to becoming a more professional trader. It allows you to later identify, assess and improve your trading.