Did you ever have situation, when liked some girl. You wanted to impress her, so you invited her to theater, next to dinner, you bought her flowers, opened door for her, pull the chair, flatter her beauty all the time, basically being gentleman, but in the end when you drive her to her house in borrowed car she didn’t even give a kiss for goodbye?
Okay but what this have any thing to do with forex trading? Nothing and everything. I call it CTM Attitude, its shortcut for Care-To-Much which I made up for purpose of this article. Basically its attitude where you care so much about something, you put special attention to all your actions, you stress yourself to make everything right and even with so you can’t achieve your goal, which leaves you only with frustration.
In forex trading you can observe in many forms. You trade money that you can’t lose like savings of your life, and instead of making good decisions possibility of loss is terrifies you and you enter trade too late increasing risk or do not enter at all. You see missed opportunity which would go in profit, you don’t like it but you sit and wait. You enter another trade perfectly but this one turns out to be lose one, nothing special just probability, but you are now mad.
You missed profit, you have lost money that you can’t afford to lose. Now you want to earn them back quickly. So you don’t wait for signal, you enter with increased position, ‘just few pips on bigger lot and I’ll be back on track’- you are repeating this to yourself. But market is playing with you, 7 pips in your favor, your smiling, quick back to open level, now 12 pips on minus and stays there, you hear your hurt is beating, you think ‘damn what the hell Iam doing?!’, now you are starting to realize your mistake and you dream to price go back to open level so you can close on break even. But prize rise only to -5 pips, you think ‘ 5 pips loss, I can live with that, better then MC” and you book the loss. 1 minutes later price rush in your favor for 30+ pips. But you are already off market. Anger, frustration, breakdown.
This was example of spiral of anger which was started by simple fear of losing money.
Still doesn’t know about Iam talking about? Ok lets go out from opposite situation. Many of starting traders, including me, has participate in trading contest for cash prizes. After first days you made nice profit and you are in top 10. You start care to not lose your position and chance for prize, and you decrease amount of transactions. But you made couple of mistakes, maybe like in previous scenario and in one day you lost whole profit and half of starting capital. Now you are like “What the hell, either way Iam doesn’t have chance for win” and you stop caring about loss and just trade.It turns out that you quickly recover losses and gain even more then before! Because you don’t care!
Now what does this mean? That we should stop caring about our moneys? No!
But there is well know poker saying: “If you are not able to risk it all, you never gonna win”.
A good trader should find a perfect balance between care and don’t care attitude, detach himself from value of the money in order to trade the best he/she can.