|
TradingCurrencyOnline.com Presents...
Online Forex Currency Trading
- How To Boost Confidence And
Discipline - by Brian McAboy
The
Challenge
Consistently
profitable online currency trading requires both
confidence and discipline to first achieve and then
maintain a reasonable level of success. For
virtually all traders, these two aspects of trading
are responsible for their success or lack of it:
having confidence as a trader, plus the discipline
to stick to their orrex currency trading system.
Most traders
that struggle with their discipline do so for a very
simple reason and this is something that can be very
easily addressed and rather quickly.
Ask any
frustrated or struggling trader what their biggest
problem is and it will boil down to a lack of
confidence and / or discipline in one form or
another. Traders who have both are the ones the that
are doing fine and enjoying their trading.
Even the
veteran traders will tell you that the primary
reason for any rough spells they have occasionally
experienced were from when they had a lapse or
breakdown in their confidence or their discipline,
but once they got it back all was well.
So how do
you go about building these two emotional pillars
for successful currency online trading? Or regaining
them if they've waned?
The 80/20
Solution
One of the
fastest and most effective ways to give yourself
that boost is to intentionally create a disruption
in the UNsuccessful pattern that has been
established. Now this applies whether you've known
success and temporarily lost it or if you haven't
found it yet.
The most
powerful way to disrupt the pattern is through
stepping back and making an assessment of your
current day online trading. Now, this doesn't have
to be a lengthy or monumental task. There are two
parts to this process and it generally follows the
80/20 rule with which you're already familiar.
Good news
for you is that the first part is the 20% of your
effort that will yield 80% of the results. Even
better is the fact that you can do this within the
next hour or two and see results that fast. Here's
what you do:
Step 1.
Effort = 20%, Yield = 80%
Step 1, part
1 is to take your recent trading results and run
your metrics on your current trading. So which
metrics are going to give you confidence and
discipline-building information?
* Your real
winning percentage * Your actual profit-to-loss
ratio * The true size of your average winner * The
true size of your average losing trades * Your
actual number of winning trades * Your actual number
of losing trades * Your REAL ROI from your trading
efforts in both time and $ * Your projected annual
income from your trading - based on real numbers
from your current trading
So how does
this help with your confidence if the numbers don't
look so great? Especially if you haven't yet
experienced a level of success that you desire?
Well, very
specifically these numbers give you a very clear
reference point to work with regarding the factors
in your trading that make the bottom line what it
is. Rather than going on hope and wishful thinking,
you now know the particular aspects of your trading
on which to focus your efforts - a realize results.
It brings a great deal of clarity to the exact
direction for you to take.
Just this
simple step alone with give you a substantial boost,
and part 2 will really bring about a transformation.
Step 1 Part
2.
In this
part, you simply backtest your system (whatever it
is) very specifically according to the rules of the
system using recent historical market data for the
markets you trade.
You then run
the metrics and compare the two. This information is
incredibly powerful in two ways for building both
your confidence and your discipline to stick with
your system. Here's how this works for you.
By
backtesting your system with historical data, this
can give you a very clear measure of what your forex
currency trading system is capable of delivering for
you. If your current trading is not delivering the
profits that you want, you need to knowif the
problem is with the system or if it in your
execution of the system.
If your
current trading results are comparable to the
backtesting results, then you know immediately that
you need to take a closer look at the system you're
using.
If your
backtest results are good, but your current results
with your system are not, then you know that you
need to focus on your execution.
Most
importantly, if your system doesn't backtest well,
then you know straightaway that you need to consider
changes to the system you're using, either a new
system altogether or changes to the one you've got.
Directly for
confidence and discipline, if your system tests
well, then your confidence in it should go way up,
along with your discipline to stick to it - because
you are providing PROOF to yourself of its
capabilities and limitations and with real numbers.
Plus you can
see its limitations and more easily get through
short losing streaks and drawdowns while maintaining
confidence in your system, thus making the
discipline part of sticking with it much easier.
Step 2. The
More Intensive Process
If you have
gone through the process in Step 1 and find that
your system is good but your execution is where you
need to focus and you need assistance working
through other possible emotional management issues,
then you need to seek out resources specifically for
finding the core issues to address. Go to Inside Out
Trading for resources specifically created to help
you with these.
In
conclusion, confidence comes from thorough
understanding and successful experience. Once you
have a system in which you can have confidence, then
the discipline to stick to it gets much much easier.
Analyzing
your current trading then backtesting your system
can provide a great deal of confidence and thus make
sticking to your system considerably easier by
knowing the particulars of how it makes your bottom
line what it is and what your system is capable of
delivering.
About the
Author
Brian McAboy
has been featured on the Chicago Board of Trade, in
PitNews magazine and in Trader Digest.
The
"Trading
Performance Analyzer" boosts your confidence and
discipline quickly and easily. Find out more at www.InsideOutTrading.com/tpa/
|
