Perseverance And Flexibility Are Always A Necessity During Rough Times
Forex trading is a difficult profession not only for beginners, but also for traders with a few years under their belts and for well-heeled veterans as well. It can be especially tough when the markets just will not cooperate and the frequency of losses is enough to make you question whether another activity is more worth your wile. All traders occasionally run into rough patches every now and then. It is normal, but the ability to accept the current situation for what it is, adapt to it, and move on is the measure of a healthy trader who always knows that there is another day to trade.
"It's not whether you get knocked down; it's whether you get up." This famous quote by none other than Vince Lombardi gets to the heart of the issue. Persistence, perseverance and flexibility are the hallmarks of a seasoned trader who understands that markets change and that we must change right along with them. Markets may fix on an uptrend, move sideways, or become overly volatile based on conditions that are out of our control. To waste time and energy over things we cannot change is one surefire method for generating anxiety and frustration and then opening the emotional centers of our brains, something we must always guard against.
This year has been fraught with strangeness as developed countries struggled with recovery plans and developing markets ratcheted back their high-growth economies accordingly. The European debt crisis brought its share of volatility, and the current pervading sense of uncertainty seems to have a grip on everyone's trading psyche. What holds one week is forgotten the next. Time-honored patterns form and dissolve without the expected consequences and then reform again as if to taunt our confidence in pattern recognition a second time.
If the challenge is simply adapting to changing market conditions, a trader can step away until his preferred conditions for trading returns, or he can attempt to develop a new strategy to take advantage of the new prevailing market reality. Time to return to a forex demo account and practice in a structured way to focus on the key elements of your style that need modification. Forex brokers may also have a set of historical data to facilitate back testing of your personal trading plan or system, a habit that is recommended by most successful traders in forex. Flexibility is a necessity in most professions, including currency trading and back testing using historical data really doesn't say anything about the future, so always have that risk in mind.
Technological and regulatory changes can also change the playing field from time to time. Accept these, too, as reality and decide how you can best accept and adapt to what comes down the pipe. The Dodd-Frank Act empowered the CFTC to act more forcefully in our industry, and many traders and brokers alike were perturbed by the recent pronouncements related to registration requirements and other limitations that were proposed to be employed in the United States. However, if any reversals are in order, pressure will have to come from deeper pockets in the industry than from the lowly trader. Plan on the known reality, make accommodations, and move on.
Market conditions can change with the seasons or over longer timeframes determined by the economic business cycle, but traders must learn to persevere and be flexible since change is natural and the essence of life. Frustration and discouragement may only be a momentary setback. Accept your present reality, try to learn a few new tricks to add to your toolbox, and start fresh with a new disciplined approach to the market that holds your interest. It is not time to consider changing professions just because you have encountered a rough spot or two. Your answer may be as simple as heeding the advice of the following anonymous quote, "Never give up on something that you can't go a day without thinking about."
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