Many aspiring traders fail to become consistently profitable because they put too much time into trying to get rich from forex trading and not enough time into the actual process of trading. The paradox of this behavior lies in the fact that the more you concentrate on how much money you want to make in the forex market, the less money you are likely to make. Becoming a consistently profitable forex trader is the result of discipline, passion, and a willingness to recognize and conquer your own personal mental faults. As you begin to focus less of your mental energy on how badly you want to make money from forex trading and more of it on the actual process of mastering your trading strategy and managing your risk, you will find that making money in the forex market becomes much easier.
– How to focus on the trade…
It is quite difficult to focus your attention on only taking the best trade setups and following your trading plan if you are an emotional train wreck
because you risk too much money on every trade or are entering numerous trades each day. Most traders get so wrapped up in calculating how much money they are “going to make” on any one trade, that they forget to calculate the risk of the trade and decide whether or not they are truly comfortable with it. Effective risk management is step 1 in having the ability to focus more of your time and energy on the actual process of selecting profitable trades.
Step 2 of focusing on the trade revolves around not entering too many trades in any given period of time. In other words, don’t over-trade, if you have been around the forex market for a while you probably understand the dangers of over-trading by now. However, one side effect of over-trading that you may have overlooked is that it forces you to focus less of your time and mental energy on becoming a great trader because you inherently become overly concerned with the money aspect of trading when you over trade. Over trading is really just another form of over leveraging your account or risking too much, so it is impossible to focus the proper amount of mental energy on mastering your trading strategy when you are freaking out over the amount of money you are losing because you trade too often. The more you over-trade and over-leverage your account (focusing on the money) the worse you will become at trading because you are not focusing your energy in the right places.
– Why Focusing on the Money will cause you to lose…
When you focus your mental energy and time on how much money you can make from the forex market you also put yourself on the path to emotional trading mistakes. The more you think about and focus on “getting rich” in forex, the more likely you are to induce the trading mistakes we discussed above; over-trading and risking too much. When you begin to shift your focus from money to the actual process of mastering your trading strategy and becoming a great market technician, you will naturally begin to money with greater ease. However, the whole point here is that you cannot focus enough of your mental powers on mastering your strategy and becoming a better trader if you do not stop over-trading and over-leveraging. Getting caught up in these emotional trading mistakes takes up most of your mental and emotional energy, losing large amounts of money and then trying to make it back can literally be mentally and physically exhausting.