Forex traders fail everyday, it’s part of the territory, but while some give into those failures and quit, others bounce back, move ahead, and often have their best trading days not long after their biggest losses. If you read the forex trading message boards out there, you know that more often than not these failures are serious and many people end up ruining their lives with bad trades. They lose their personal lives by being glued to their computer screens watching their money balloon in size, only then to see it all gone in the blink of an eye. They lose tremendous amounts of money in very short windows of time and many of them never recover. In extreme cases, they become addicted, treating trading like gambling. Of course these two things should never be confused.
Traders are also vulnerable to self sabotage by relying on the wrong information or relying on the right information at the wrong time. The biggest mistake you can make as a trader is letting new information cloud your judgement. Avoid letting a new piece of information confirm your guesses and hunches. By confirming your beliefs with a single piece of information, and only because it is in line with your own thoughts your chances of being incorrect exponentially increase. You are living in your own fantasy world created by your own truths. In the same vein, do not let your most recent trades affect your current trade. It will lead to hesitation and overconfidence. Traders must remain in the moment. Lastly, don’t jump to any current trends that deviate too greatly from your own plan. They aren’t in your plan for a reason.
With all the opportunities for failure in trading, it’s important for traders to create concrete plans and lifestyles that fit their goals. The important thing is to build a strong foundation of a life that can support the ups and downs of trading. Remember, whatever your plan and goal for trading is, do not let it waver as you ramp up and start trading. Keep your goals insight and don’t get carried away. Below are 10 lifestyle habits that are important to have and foster as you trade.
Some of the most successful hedge fund managers meditate. Goldman Sachs has their own meditation instructor. These top managers and traders attribute their ability to stay calm under pressure to the practice of meditating. Meditation has been shown to increase awareness, prevent mental decline, make it easier for the brain to focus, and reduces negative emotions. All of these benefits are key to remaining a calm and thoughtful trader who can make correct choices more often and with more clarity. When you are attune to your inner workings and able to tune out your surroundings, you are able to make more informed decisions with less of the stress usually tied to important trades.
Though it is probably hard to believe, visualization works because the brain equates images with the actual thing happening. The brain has a hard time telling the difference between imagined and actual real images, so we can trick it into thinking it has already done or accomplished something just through visualization. The goal here is to trick your brain into thinking that the task at hand is already one you have performed and performed well. When you go to complete whatever it is you want to do, your brain will launch into auto-pilot…not training pilot on day one. Because trading isn’t as physical as say, the Olympics (athletes visualize all the time), the best way to use visualization for trading is to rewire your fear responses. Practice visualizing yourself staying calm during a difficult trade, train your body to not break out in stress hives and sweat, but to take the stress of that moment and channel it to focused work.
Daily affirmations work in very much the same way that meditation and visualization do. They help you become the trader you want to be–calm, focused, energized– by training your brain and body to do what what you want them to do. You are the boss of your own being! Using these tools will help you get back in tune with who you are and to stay in control. A trader operating on auto-pilot will more than likely fail. Daily affirmations are a way to get you into the right mindset for achievement. If you only think you can fail, then how are you going to succeed? By affirming that you will be a successful trader you are more likely to do the things that will make you a successful trader. Risks will seem more important than scary. The steps to success will become more clear. Affirmations create your reality.
Planning and Time Management
This one should be obvious but you’d be amazed by how many traders fail because they did not put together a comprehensive plan before they started trading. Think of how you will fit in trading daily. If you are working full-time think about what time you have to truly commit. Write down your commitments and how you use your time. Make sure you leave enough time to take care of yourself and time to do your meditation and affirmations. They may seem like a waste of time or plain silly, but they are tools that will help you grow into a phenomenal trader.
Researching & Continuing Education
This is one of the most important points on this list. As a trader you should always be learning, growing, and evolving. Staying stagnant and maintaining the same strategies will hurt you over time. That doesn’t mean to switch what you do constantly, but always be open to change and learn what is out there, you can only get better and make more money in the process. Read lots of trading blogs, look for fellow traders on message boards and find what works for them. There is a ton of information out there about this industry. Read and learn but stay cautious about your sources.
Execution & Follow Through
This is another category that may seem obvious but that is often missed by traders all over. Make sure you are executing your plan correctly! If you come across a road block, stop to assess the problem, come up with multiple solutions, pick the best one, and take your time in applying it if you can. Planning and time management only work if you are executing. If you plan to do something, or have the hour blocked in your schedule to trade, make sure you are doing it! Do not avoid the difficult things when it comes to trading. You will never learn (or make any money) if you don’t solve your own problems.
Traders who fail often fail because they run themselves into the ground and then some. Not sleeping, living off of coffee, and eating candy for lunch are good ways to kill yourself… and to fail at trading. The best traders are healthy, energetic people who take care of their bodies so their minds can use all their energy making great trades and making lots of money. Eat well and work out so that your stay sharp, alert, and focused.
Stay Social and Have Mentors
It’s easy to wind up with a computer for a best friend and no one else in your life. Traders who fail often do so because they do not foster important relationships. Take care of your family if you have one so you have someone to share your wealth with. Get out once in awhile to keep your stress levels down. Find a mentor who has a similar mindset as you and find out how they balance their lives, how they trade, and how they stay fit doing it all. Chances are there is someone who you admire out there. Reach out and tell them so. Ask to learn from them. Remember the importance of learning? This is the time to step to it.
Do not get carried away or distracted when you’re trying to trade. Focus your mind (meditation will help with this!) on the task at hand, don’t let outside noise take you away from what you are doing. If you’ve managed your time correctly, you can afford to ignore someone speaking to you or your phone ringing– you’ve blocked in time to take care of those things. Always keep a short copy of your plan on hand, your goals for the day, and all pertinent information. Do not get distracted because you forgot something and have to get up from your computer.
Don’t forget! You can only trade well if you are in tip top shape. A tired and lonely person will be tempted to make desperate trades. A person with a well-balanced lifestyle will make smarter choices because they will be motivated by the trade and the tactic of it, not the desperation of being incredibly broke. Let the passion for trading drive you, not fear, and take a break every once in awhile!