Analogies and metaphors can be a great learning tool, because they make complex and not-so-obvious things simple and understandable. Take, for example, boxing and trading. Trading and boxing seemed to have nothing in common at first glance - difficult decisions in the financial markets and, on the other hand, a fight between two men at the ring. However, based on these polar things it is very much in common.


You cannot avoid the blows.
Despite the fact that the best boxers of the world have a quick response, the incredible speed of movement, they are still missing a beat during the battle. It is impossible not to miss a single blow during the fight. It does not mean to lose; it's just part of the game.

In trade, you will not be able to avoid the stop-losses, they will happen quite often. There is no need to avoid the stop-loss and try to prove to yourself that you were wrong - ultimately it could lead to a catastrophe. A professional trader takes the stop-loss for granted and not concerned about it - he just continues to trade as if nothing had happened. He does not lose his attention and control, and is just waiting for the next profitable pattern, he inflict his next stroke.


Pass a lot of punches, instead of a single, which will send you to a knockout
As already mentioned, a punch - this is normal. But at the same time you should avoid such an attack, which immediately send you to a knockout. You need to defend well, be quick on their feet and to prevent the fall of his defense. Be careless and one serious blow could mean the end.

In trade, you will have all the time to comply with the risk management and determine its worst-case scenario. Use the appropriate position size, protect it with stop-loss, and always make sure that never, under any circumstances, a trade will lead you to a Margin call.

You do not have to win by knockout - victory on points also victory!

Despite the fact that the knockout looks spectacular, between it and win on points there is no difference. Most boxers do not use the unchecked swing or reckless attack. They know that, thanks to precise and effective impact they can win without the risk of running into a counterattack.

In trade, you do not need to make huge profits on one deal. Regular small winning trades will be added over time. Professional trader always remains in control, and he knows that this advantage ensures the success of the long term trade.



Control your emotions. Do not let your opponent to sit on your head.
Before the two opponents will meet in the ring, a psychological struggle has long begun. Professional boxers know that they can tip the scales in his favor, if they can "dwell" in the opponent's head. Acting on his opponent, they aim to get him to do reckless things that deviate from his plan and act emotionally.

In trade, we do not need to stand with the enemy face to face. We must know that a rival trader sits between his ears. That is why self-control and emotional state - a key factor in the success of trade in the financial markets. Very often a losing trade can lead to a closed emotional spiral that will lead to much greater losses than necessary.


Preparation for each fight is unique.
Preparation for every new battle is unique, because the change of opponents. To begin boxing with opponent you need to analyze him, identify his strengths and weaknesses, as well as the unique characteristics and only then come up with a plan for the fight. You cannot use the same plan of battle all the time.

Traders often wrong, applying the same method to different markets, timeframes and market conditions. Volatility and market drivers are changing all the time. Different markets are moving relative to each other in very different ways and at low and high timeframes price movements are quite different. Thus, the trader must constantly adapt their trading strategy to changing market conditions, if he wants to trade consistently and evaluate market conditions.

You have to react to what is happening now.

Despite the fact that the boxers are preparing their game plan well in advance, they can always change it during the fight. If their opponent behaves contrary to expectations - for example, he beats too early or they noticed some weakness - they are always ready to immediately change the tactics of the game.

Traders often quite static, and trade in reaction mode. Despite the fact that you have to have a trading plan and follow it precisely, during some unexpected events you should be able to adapt to changing market conditions. Amateurs are often "stuck in time" during bad periods - in the end they get a knockout punch that went before them for a long time.

You have to go all the way from the beginning.

Tyson, Ali and Holyfield is unlikely to make the decision that they will fight for a world title. They started boxing very early and could hardly imagine their future boxing career. They fought in the tens and hundreds of small battles in dilapidated halls and slowly work up to as long as not able to step on the big stage.
Traders should follow the same path. You cannot choose to be profitable trader in this moment. Most likely you will pass through several accounts you will lose money in a month or a year, or even more; You have to work 7 days a week 12 hours a day without knowing anything if spent force repaid and whether you will reach your goal.

Become a master of the basics.
Top boxers - those boxers who is fluent in a simple trick: they move well in the ring, beating effectively, well protected, possess dangerous hook and incredible endurance. The best boxers there is no need to own a unique and outstanding technology, or develop your own tricks and gimmicks - they train their skills on what really matters.



Only then the trader will have a chance of success, when skillfully master the basic principles and techniques. Being able to perform multi-timeframe analysis, to understand how to read the price and its "mood", to understand the basic principles of statistics, have a permanent principle of establishing the size of the position and risk management, as well as unquestioning adherence to his rules of trade - all this is the foundation of any successful trader.
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