FX TRADING PSYCHOLOGY
The Three-Legged Stool of Successful Trading, Rescue
Mindset is the last place in the world that you might look to find problems in your
trading
and your trading system. Traders a c k n owl e d g e problems their
And if humans were
beings, in trading
psychology, but seek the answer to their problems s o m e w h e r e else other than within.
But
there are three aspects that have to be combined in order to create the conditions of effective tr a d i ng . Without
all
three working together, 3-legged
the
of successful trading
stool is
It is rare to find a trader who has the solid mindset that allows him to trade his edge
unbalanced and does not produce the stable conditions needed for success.
Enormous are emphasis,
money, and time are placed on two of the three…platform and methodology
an enormously
important aspects of effective trading. But it is the mindset of the trader that drives both platform and methodology. Without
effective mindset the other two are wasted.
48 FX TRADER MAGAZINE January - March 2019
the way you effectively manage risk. Ultimately, trading is about finding re-occurring patterns in an ocean of randomness. Your methodology has
to give you an edge in the
management of this randomness. By being able to discern potential patterns that work to your favor, you are able to extract capital from the markets at a rate higher than the capital you give to the markets. It is this proven risk management
rational these
two elements of
trading
(platform and me thodolo g y) would be enough to
the necessary advantage
provide in
managing re- o c c ur ri n g patterns in a field of randomness. Tat is a big “IF”. Tink of it in terms of auto racing. Te track is the platform upon which all cars and drivers compete
for success. Te car is
the methodology – delivering an edge to the driving team if, and only if, the driver (trader psychology) has the right skill sets to effectively manage his car on that track. In any given domain of performance there will be a large field of people who know how to operate. However, in racing, there will only be about 10 or 15 elite performers who can drive that car to success on a consistent basis. Te driver makes a huge difference. So it is a decision of
to the
If you have ever worked with a clunky or inadequate platform, you know the importance of having an efficient platform to execute your trading strategy.
with your
It is necessary. Te same trading methodology or
of a solid methodology that gives you a favored potential in terms of outcome. The problem is that it is rare to find a trader who has the solid mindset that allows him to trade his edge.
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