Peter Bain Forex Trading Commentary for Friday Auguest 11, 2006
Since I will be on holidays until August 22nd, I have asked some Forexmentor members to fill in for me on the AM Reviews. Today's AM Review is by Seth Gregory who is not only the man behind the PM Preview and the Know Where You Live Risk Managment Toolkit but also manages a forex managed fund. Please read his thoughts with care and I will see you when I return. Good luck with your trading.
Forexmentor.com Forex Trading Price Action
Not a whole lot of movement in the EURUSD, however, there were a couple of trades that presented themselves. We commented on one in the AM Review- can you find the other? We also noted why having a good cross currency in you trading portfolio is good when the dollar pairs do not present too much action by showing the price movement on the EURJPY. We also demonstrated how the basic technical tools that you know or are learning could have been used to make a nice trade on the EURJPY. Please take a few minutes to read the article below. May you find peace and rest this weekend my friends.
Dumb Mistakes: Everyone Makes Them
When your money is on the line, you don't ever want to make a trading mistake. There are times when even a minor mistake can cost you big, but mistakes do happen. Have you ever spent a few days mapping out a trading plan, patiently waiting for the right market conditions, and then blowing the whole thing by making a dumb mistake? Perhaps you were distracted and forgot to close the position at your predetermined exit point. Or maybe you walked away from your screen to pick up the kids and came back to see your profits vanish. The possibilities are endless. What do you do? Kick yourself for making the mistake? Well, it's understandable if you do so, but should you waste your time? You may end up feeling even worse and making even more mistakes. What good did feeling bad about a mistake do then? We are all human, and humans make mistakes, and at times, the mistakes are really dumb. Money is lost for no good reason than shear carelessness.
It's tempting to feel extreme guilt or to wallow in self-pity, but it does no good. Ideally, it would be wonderful if we never made a trading mistake. Think about how great it would be if we never made a wrong calculation. If we had a perfect memory or unfailing concentration, we would make few trading errors. Why not try to be thoroughly competent in all we do? We pay a price for trying to achieve superhuman perfection. If we believe that we must be perfect, we will expend all our precious psychological energy mulling over the negative consequences of failing, rather than focusing on what we are doing in the here-and-now to implement our current trading plan. Traders who believe they must be thoroughly competent spend all their time worrying about what they did wrong, what may go wrong, and how they will recover should they fail. These thoughts are distracting and obscure the flow of immediate experience, and the ability to read current market activity with unfailing accuracy. In other words, by kicking yourself for not being perfect, you feel bad about yourself and make even more mistakes.
A more adaptive approach is to realize that it's impossible as a trader to be thoroughly competent, adequate, and achieving all the time. Certainly, you should develop an extremely detailed trading plan and try to account for all adverse events that may go against your plan, but there are limits to what you can do. For your long term enduring success, it is vital that you learn to ease up. You don't have to be perfect. You are bound to make mistakes occasionally, and if you are consumed with avoiding them, you'll be so anxious and fearful that you will make even more mistakes. Besides extreme perfection doesn't always pay off in the trading business. Trading isn't exactly a science. Even when you think a trading plan through carefully, you can't account for every possibility. An unexpected event may ruin your plan and there is nothing you could have done about it, but manage your risk and chalk up it to fate. Sure, you don't want to make too many mistakes, but you can make a few occasionally with little repercussions. Striving for perfectionism is an important ideal to hold, but don't forget that it is just an ideal. You might try to reach for it, but don't beat yourself up when you don't get there. Mistakes happen. Let it go. You'll feel better and take home more profits.--- Innerworth
--Seth Gregory
(filling in for Peter)
forexmentor.com
Forexmentor.com Forex Trading Price Action
Not a whole lot of movement in the EURUSD, however, there were a couple of trades that presented themselves. We commented on one in the AM Review- can you find the other? We also noted why having a good cross currency in you trading portfolio is good when the dollar pairs do not present too much action by showing the price movement on the EURJPY. We also demonstrated how the basic technical tools that you know or are learning could have been used to make a nice trade on the EURJPY. Please take a few minutes to read the article below. May you find peace and rest this weekend my friends.
Dumb Mistakes: Everyone Makes Them
When your money is on the line, you don't ever want to make a trading mistake. There are times when even a minor mistake can cost you big, but mistakes do happen. Have you ever spent a few days mapping out a trading plan, patiently waiting for the right market conditions, and then blowing the whole thing by making a dumb mistake? Perhaps you were distracted and forgot to close the position at your predetermined exit point. Or maybe you walked away from your screen to pick up the kids and came back to see your profits vanish. The possibilities are endless. What do you do? Kick yourself for making the mistake? Well, it's understandable if you do so, but should you waste your time? You may end up feeling even worse and making even more mistakes. What good did feeling bad about a mistake do then? We are all human, and humans make mistakes, and at times, the mistakes are really dumb. Money is lost for no good reason than shear carelessness.
It's tempting to feel extreme guilt or to wallow in self-pity, but it does no good. Ideally, it would be wonderful if we never made a trading mistake. Think about how great it would be if we never made a wrong calculation. If we had a perfect memory or unfailing concentration, we would make few trading errors. Why not try to be thoroughly competent in all we do? We pay a price for trying to achieve superhuman perfection. If we believe that we must be perfect, we will expend all our precious psychological energy mulling over the negative consequences of failing, rather than focusing on what we are doing in the here-and-now to implement our current trading plan. Traders who believe they must be thoroughly competent spend all their time worrying about what they did wrong, what may go wrong, and how they will recover should they fail. These thoughts are distracting and obscure the flow of immediate experience, and the ability to read current market activity with unfailing accuracy. In other words, by kicking yourself for not being perfect, you feel bad about yourself and make even more mistakes.
A more adaptive approach is to realize that it's impossible as a trader to be thoroughly competent, adequate, and achieving all the time. Certainly, you should develop an extremely detailed trading plan and try to account for all adverse events that may go against your plan, but there are limits to what you can do. For your long term enduring success, it is vital that you learn to ease up. You don't have to be perfect. You are bound to make mistakes occasionally, and if you are consumed with avoiding them, you'll be so anxious and fearful that you will make even more mistakes. Besides extreme perfection doesn't always pay off in the trading business. Trading isn't exactly a science. Even when you think a trading plan through carefully, you can't account for every possibility. An unexpected event may ruin your plan and there is nothing you could have done about it, but manage your risk and chalk up it to fate. Sure, you don't want to make too many mistakes, but you can make a few occasionally with little repercussions. Striving for perfectionism is an important ideal to hold, but don't forget that it is just an ideal. You might try to reach for it, but don't beat yourself up when you don't get there. Mistakes happen. Let it go. You'll feel better and take home more profits.--- Innerworth
--Seth Gregory
(filling in for Peter)
forexmentor.com
