GOOD FUN - Well yesterday was a fun day. And when I say fun, I don't entirely mean fun. I had bought USDJPY 106.24 and seen it make a nice move higher, before getting taken out cost at the exact low of the day, only to then see it back above 107.00 in no time (almost as if the market's sole purpose was to get me out of the trade). Take a look at today's video for a funny overview of the trade. But it's exactly times like these when you need to be able to laugh it off and not get sucked into any frustration the market would love to make you feel.
A FATAL TRAP - That is just a trap and you should make sure to never fall into it. So the next time you break even or even lose money on a trade before the market then rips in the direction you wanted, don't beat yourself up. You did the best you could and sometimes, when trading markets, it just won't ever be good enough. But if you keep your head on, it will only be 'sometimes' and over time you will come out well ahead. Stop telling yourself you had bad luck and just accept that it is a part of it.
TRUST - When I think a little more about the psychology of trading and why so many traders fail, it has a lot to do with this. It really comes down to 'trust.' Traders that fail don't ultimately trust the market and the fact that there will always be another great opportunity. These traders only have the ability to see the current trade as the 'be all end all' trade. And of course, if you let everything ride on one trade, you may get lucky once or twice, but the market will catch up with you and eventually eat you alive.
DELUSIONAL - The real focus should be on understanding that the trade you are in is just one of many trades out there. The more you diminish the importance of each trade, the greater your chances for success. Now when I say this, I don't mean you shouldn't take each trade seriously, but I do mean you shouldn't be telling yourself that the current trade is the last great opportunity in this world! How crazy is that!!? And I know you know what I'm talking about too. Even I have had these thoughts at times. And they are absurd!
PICK YOUR SPOTS - The moment you mitigate the significant of each trade, is the moment the market all of a sudden looks a lot smaller and a lot less intimidating. The way to beat the market is to sit back and pick your spots. Over time, if you keep picking your spots, you will slowly eat away and turn that into something special. If something at any point during the course of a trade doesn't feel right, for whatever reason, simply stand aside and have the confidence to know a new opportunity will present sooner than later.
LAUGHING IT OFF - Amazingly, an overwhelming majority of the people out there lack the ability to understand that there will always be great trades. So yesterday I missed out on what may end up being a nice move higher in USDJPY. And you know what? I can laugh it off and have some fun with it. I know there will be another USDJPY trade sooner than later, and who knows, maybe it will even be USDJPY itself. But I sure as heck won't let the market get the better of me. I'm quite happy betting another 'last great trade' will come hopping along at any moment.