It has come to my attention recently that most people who embark on the journey of trading, provided that they learn a sound methodology like what we teach here at the Fx365 Institute, successfully learn how to trade the screen that is in front of them.
What actually becomes the challenge for people to overcome, is not the ability to get themselves into positive trades, or in the words of our Director of Education, Mr. LaCurtis Mayes, ‘I ain’t worried about being able to pull no pips…’ but instead, the ability to manage themselves emotionally at a large enough pip value to actually make their trading profits meaningful.
As the adage says, 100 pips at a $1 a pip is not the same as 20 pips at $10 dollars a pip.
I don’t know about any of my fellow traders, but if you are anything like me, you may react differently in your trading as you move up the lot ladder in dollar amounts.
This is where the exercise of emotional weight-lifting comes into play. For me, trading the same lot size for months at a time did very little for me emotionally. But what I did find, was that when I multiplied my lot size by 20x I was confronted with a whole new set of emotional challenges.
After quite frankly being generally discouraged by my performance at this elevated size, I reduced my pip value by 15x and found that I now was trading very well, virtually emotionless, and making quality decisions. The upside was that now I was trading without emotion, at a lot size that was 5x my original lot size.
If you are feeling very stuck with moving forward with your trading, it may be time to experiment with stretching yourself emotionally. Remember, as the FXCM disclaimer states,
‘Trading can be potentially risky and do not risk more capital than you may be comfortable losing.’ Having said that, if you push yourself into a lot size that is uncomfortable to you, even if you return later to a smaller lot size, you will likely end up trading with indifference at a lot size that is greater than where you first started.
Eventually, we can achieve the destination of being able to trade a $100+ pip with indifference.
Again in the words of Mr. LaCurtis, ‘if you are going along trading a dollar, 2 dollars and think you are going to make money at this, you’re fooling yourself.’
So here is to emotionally weightlifting and breaking through plateaus!
When it gets tough, remember why you started in the first place.
If you are living in the same world I am, most of the things that are really worth it turn out to be a fair amount more difficult than initially thought.
Trading FOREX for me has been one of those things. I got started because I thought about WHAT IT WOULD BE LIKE, to be able to earn money on my laptop, anywhere in the world I was connected to internet.
I thought to myself, ‘I would flip my screen open at a Starbucks in the northwest for an hour, gather up a few pips before heading out to the Mt.Hood Snowbowl for some fun ski runs.’ Or maybe I would grab up a couple hundred bucks while killing a few hours in the afternoon, visiting my dad in Colorado while we wait for friends to come over to dinner.
Nothing would be better than earning some money, while on a trip in some exotic location, sitting in my boardshorts, drinking cool water and waiting for the wind to die down at the surf spot.
This ladies and gentleman was the fuel. There is always fuel required to instigate action of any type. Something fueled you!
The games begin. We meet the markets with optimism and enthusiasm. Weeks go by, months go by. My performance didn’t match my expectation. No problem, just push the target date out a bit further of when the goal will be realized. More time passes. My skills improve some. I think I’ve got it. I bump up my lot size, after all, if I want to make any meaningful money I need to get into a bigger lot size.
I make some bad decisions, I get a slap on the wrist. Doubt sets in. The target no longer seems to be anywhere in the foreseeable future. I forget about what this opportunity can really provide. I start to focus on the fact that its ‘just another way to make money,’ ohhh bother.
SUDDENLY I snap out of it. NO, not this time. I have seen the power of the market. All of the evil doubts that take so many out of this game don’t have that affect on me. I start to concentrate. I remember all of what I have learned as a student, and stop focusing on all of the challenge that has also come with it.
I start to perform better. I trust myself with more & more money. I am now in a cabana in Nicaragua. I take one trade and it more than pays for the cost of my stay. My dream is realized.
If you haven’t made it past the point of no return, REMEMBER what it was about trading that you wanted badly enough to make you start. If you’re not yet there, you’re probably closer than you think!