Trying to be a perfect trader who makes money on every trade they take and who never makes mistakes will very likely only frustrate and perhaps even limit a trader needlessly.
Furthermore, many factors compete to determine foreign exchange rates, and so the forex market can often be moved in ways that might be difficult to anticipate in advance. As a result, forex traders need to be fully psychologically prepared to be proven wrong on the market’s direction.
Traders also must learn to admit they are wrong as fast as possible in order for their trading accounts to survive and for them to stay in business over the long run.
Trade for Success Not Perfection
Besides, what really matters when trading is not how perfectly each trade is executed or how many winning trades you have compared to how many losing trades.
Instead, the most important measure of successful trading is how high your overall profitability is given the time and risk you have taken to achieve it.
Perfectionism Can Cause Problems
Nevertheless, some forex traders seem to have perfectionist tendencies in their trading psychology that need to be exposed and perhaps adjusted to help make them more effective when operating in the market.
If forex traders allow their perfectionism to influence their trading decisions, it could well cause them to lose money.
This could happen due to stubbornness in thinking they are still right when the market has already proven them wrong by moving against their “perfect” position.
Not only might such stubbornly perfectionist traders unwisely refrain from exiting their losing trades appropriately, but they might even fail to close out winning positions even if appropriate take profit levels are reached.
Such traders could consider redirecting their perfectionist tendencies toward creating and refining a profitable trade plan and then sticking to it in a disciplined way.
Stop Waiting For the Perfect Trade
Another problem with perfectionism among traders is that it might also cause them to miss profitable trading opportunities by impeding them from initiating trades while they wait for the very elusive “perfect trade” to show up.
This problem can prevent them from taking advantage of many other less perfect trading opportunities that could eventually have shown considerable gains for them.
In essence, traders who have perfectionist tendencies need to realize that they will very likely lose money on some trades and to prepare themselves psychologically to deal with this less happy part of the forex trading game.
Once again, such traders can also use their perfectionism effectively to help them develop a great trading plan that shows consistent profitability and then maintaining the required discipline to stick to their plan.
Focus on Profitability Not Perfectionism
Since no one is perfect and every trader makes mistakes, the goal of perfectionism when trading remains questionable and may perhaps even be counterproductive to becoming a successful forex trader.
Accordingly, instead of focusing on a goal of being the perfect trader, you would probably do better to focus on the more constructive and realistic goal of maximizing profits given your risk tolerance and trading capital within a well defined trading plan.
Forextraders' Broker of the Month
ForexTime (FXTM) is an award-winning platform that certainly has the feeling of being set up by people who know what they are doing. The firm demonstrates an understanding of what helps traders make better returns, and its success can be measured by the fact that it's doubled the number of clients it supports in recent years. The fact that the broker has grown to have more than two million accounts suggests it is getting things right for clients.