A BAD Forex trade is when you lose money, right? WRONG…
By: Calvill Joseph
Tags: Forex, Forex Traders, Forex Signals, Forex Trading

“ How much money did you make in the Forex market today?” Is it that important and do

I really care?

Today, I’m going to talk to you about

something that may, on the surface appear

counter intuitive, but once you hear what

I’ve got to say; you understand the

principles and the mindset behind it, I

think it should have massively helped you

in your trading. Now, when you ask most

traders how they’re getting on with

their trading or are they having a good

day, they’ll immediately reply with how

much money they’ve made or how much

money they’ve lost. Of course this is a

very natural approach. Now, if you make

money, it feels good you can now go buy

the things that you want and that’s a

good feeling. So you’ve had a good day. On

the other hand, if you lose money. It’s

bad! It means you’ve given your money

away to someone else. Someone you don’t even know. You’ve got nothing in return

for the hours that you’ve spent at

the screen. You may even blame on someone

else. You may even blame it on the broker. It’s a bad feeling but quite frankly,

this is the wrong way to look at winning

or losing in the market. The wrong way to

look at a winning trade or a losing

trade. The wrong way to look at your

trading progress. Now, I hope if you’ve

been following me by now, been watching

my videos, you would have seen the one on

the law of large numbers. Do go and check

it out if you haven’t already done so. So

we know that it’s impossible to only

have winning trades. We know that when we

place a trade in the market we have no

idea if that’s going to be a winner or

indeed a loser, and we should be caring

about even less.We know that we’ve got a

strategy and we know the expected return

on the strategy based on our back

testing, but we have no idea when those

losses will com. We also know that when

we’re trading, we should be risking the

same percentage risk on each trade so in

that way, when we’re having the

inevitable losing streak, we don’t get

wiped out of the market. And also when

we’re having the winning streak, that

we’re increasing our risk exposure in

dollar terms so that we can capitalize

on those winning periods, as well. Because

all strategies will have the winning

periods, and of course, the losing periods.

So once we understand these principles,

it stands to reason that a good day or a

good trading day,

is not about how much money that

you’ve made. It’s about did you follow

your trading plan? The trading plan that

you back tested, in terms of strategy and

in terms of risk management. Did you

stick to what you know works well? Did

you deviate from the plan and let your

emotions dictate your action? Listen,

this may sound a bit off the wall, but

the worst possible trading day could be

the most profitable day in terms of the

money that you actually made. Our brains

are like finely tuned machines. If we

make money, which remember, it feels

really good because we can go and buy

all those things we really wan, but we

broke our trading rules, then the chances

are, this good thing that our brains love

will want to repeat itself. So we’ll

continue to break these rules in the

future trades. If our trading plan says

we should only be risking, say 1 percent

of the account on each trade, but because

we decided on this particular trade, it

looked really good; high probability that

so good that it can’t fail, we decided to

increase our risk and it was a winner.

Indeed, we were correct. Good feeling yet

we’ve conquered the market highly likely

that the brains going to want to repeat

this feeling of success; repeat this

feeling of being able to crack the

market and will be increasing the risk

on other trades as well. But the laws of

probability, would it take that one day

you’re going to get wiped out. Same for

moving stops. Remember a stop order is

where you place an order in the market

to exit a losing position. Now it doesn’t

matter who you are. No one likes to get

stopped out. But if you move your stop

because it was getting too close, and it

results in the trade moving back in to

break even or even profits, then you might

have the feeling of yeah, I’m now a

genius! Absolutely wrong! If you move a

stop and it turns back into profit,

you’ve had a bad day trading. Because

your brain now, would repeat this

feeling of being a genius and want to

repeat this process of moving a stop, as

it’s getting close. This is going to lead

to a slow bleed of the trading account.

Possibly, into a complete destruction. So,

a good trading day is not about the

dollars that you’ve made in the day . It’s

about,

did you trade your plan without

deviation? Did you stick to the risk

management perimeters, and did you stick

to the strategy rules that you

previously set out? Now, you can still

have a losing day in monetary terms but

still have a great day if you’ve stuck

to your trading plan. A bad day is if you

broke new rules and lost money at the

same time, but a really really bad day is

when you break the rules and you make

money, because your brain is going to

want to peat this process, time and time

again. And it’s going to result in you

not being a trader but ultimately a

gambler. So, what can be done to ensure

that, going forward, from now on, every

time someone says to you, how you’re

getting on with the trading, you can say

it’s going just great, thanks well?

Firstly, you need to have a trading plan

which involves a strategy and some risk

management criteria. Then you need to

make sure that each and every trade that

you take is complying with the trading

plan. Now, a good way to do this is to

have a checklist which is completed on

each and every trade before you take it.

It’s very time consuming, but believe me

it’s a truly worthwhile endeavor. That

way, you can ensure that your trades are

always good trades and when you’re

having good trades you having a good day.

And when you having a good trading day,

the profits will be sure to follow. Now,

if you don’t have a trading plan or

indeed, a strategy you may want to check

us out here at Forexsignals.com. Got

lots of material on how to construct a

trading plan and risk management, and so

forth. I also share and teach various

strategies which I trade live in front

of the members several times a day on

our live stream. So, as I say you, may be

able to check that out as well. So a good

trading day, it’s not about how much

money you make,it’s did you stick to yours. I hope you enjoyed the article. Hope you

found the content useful. If you did, give

me a thumbs up.

Speak to you soon!

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