WOW – Against Instinct?
ByHere’s my latest progress report on my forex trading apprenticeship, as promised. This is THE most interesting and revealing time I can ever remember..
The most telling thing for me is that I am beginning to realize that although I watched read explanations, watched forex videos and listened to the sound-tracks, I didn’t really take a lot of it in – and now, as I recap and go back over things, I am realizing how much was in there and how much I missed.
Here’s what I mean. We were told on several occasions that some of the rules about succesful forex trading would go completely against instinct – and would be very difficult to do. “Yeah, yeah,” I though, ” but not for me, I am really into this and I know I’ll be OK. I’m doing this for the family.”
Well, how wrong can you be?
Trading SAFELY is the pillar that Sid’s forex trading system is founded on. Everything is designed to revolve around this basic concept. In this context, ‘SAFELY’ means never risking your capital, on the premise that, whether you trade today or not, the most important thing is looking after and husbanding your capital. As we are repeatedly told, this is PRIME importance because if you lose your capital, there’s no coming back. It’s all over without it.
So, it’s put to us that our primary job is to preserve forex capital at all costs – the secondary job is to make it work for us – when it’s safe to do so – and not otherwise. As part of this safety strategy, we are taught not to trade unless we see the criteria that we have been taught.
But – to allow for the fact that no one is perfect and that anyone can make a mistake in a volatile market – we are taught, told and retold that there is ONE unbreakable rule that we MUST follow. It is this.
You only get into a trade when the crtiteria we’ve been taught, tells you that this trade is going to ‘go positive’ (become profitable) straight away. This is called looking for a good ‘entry point’.
As soon as your brain gets the thought that ‘this trade isn’t going positive’ we are told to close the trade. This means that we are always dealing in logic, not emotion. It means that we do not ever rack up big negative trades that we would then have to recover from. It means that all we have to do is develop our skill and judgment at picking entry points. It means that we are always in control. It means that the mathematics work. It means that we will never be risking more than around 0.8% of our capital (yes, we risk less than 1% if we follow the rules). It means that we will develop our forex trading to the point where we have over 90% positive trades and the negatives will be so small as to be insignificant.
I see the proof of this every single day as real-live traders and more experienced demo traders than me, turn in 100% positive trading days and weeks – regularly.
I KNOW all this and I’m learning how well the system works every day – but I have to tell you it is SO HARD to close a trade when it doesn’t go positive straight away. Would you believe – it goes COMPLETELY against every instinct I have?
Despite the fact that I was told this time and time again, my instinct is to wait and see if it will ‘go my way’. I have actually let negative trades go down and down and down, hoping, against all sense, that they will come back and prove that I was right all the time and it was a good decision to enter that trade. This is like piloting a plane that is gaining speed wonderfully well, but undeniably losing altitude just as quickly.
Now I know that I have further to go than I thought in my – I have to say it – egotistical way. Sid is proving SO right in all his teachings – and I’m just beginning to find this out. He says that being successful at forex is only 20% about ‘how to’ – and 80% about the individuals ‘character’. I’m beginning to see this for myself.
So – I am buckling down to be a ‘good girl’ and for ONCE – I think it might be better if I do what I’m told and forget about my ego.
May I say once again – I am LOVING THIS !!!
Sam
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