Forex and Losing Weeks

As is sometimes bound to happen, all traders go though dry spells in terms of successful trades. The fact is, not all trades work out, and more often than not they seem to come in bunches together. How you perceive and handle these will be of great importance to your long term success.

Remember, no business can be successful when it is only tried for a month at a time. And if you don't treat your trading like a business, it will not be successful. But for many new traders, this seems to take the "romance" out of it. The excitement is gone, and they find it boring. I suppose they end up saying the same thing about many other avenues in life; work, hobbies, relationships. The problem with many people is not their lack of desire for something better, it's their lack of desire to work at it.

They would prefer to treat the Forex as a gigantic lottery ticket. But when it doesn't pay out as they think it should, their ready to ditch it and move on to their next "ticket". Often this is true of their systems as well. They stick with them for the 30 day free trial, but at the first sign of problems, they are ready to bail-out. A couple losing trades, and they are back on the hunt for a new guru.

Such traders will never find success. It will always elude them. Not necessarily because they would have been bad traders, but because they never gave themselves the chance to find out!

It is important to note that all traders are trading off of the same information. We have the same government reports, interest rates, and press conferences. We are all looking at the same charts, and seeing the same patterns.

Last week we saw two triangle patterns in the euro. The first one paid out nicely. The second turned into a stop loss. Why? Simply because the market is not identically the same time after time. Many times it is. Triangle patterns have a 70-80% success rate according to some. But sometimes they just don't produce the intended results. At that point, instead of breaking out to the upside, other traders were looking to weakness to fall through the rising trend line. It was the weakness which prevailed that day. Does that mean it was a bad trade?

Not at all!

It was a good trade, even though it was a loser. We followed our parameters, looking for continuation in an uptrend. What I am trying to say is that good trades can be losers, too. It is up to us at that point to shake it off, knowing that sometimes that is exactly what will happen. There's no going back to it to re-examine the pattern and say, "if only I had seen this, or done this."

Generally that kind of retrospection is more dangerous than helpful. It leads you to doubt your system, and makes it very hard to trade. No system is perfect. And if there was a perfect system, there are no traders which are perfect. Put together imperfect systems with imperfect traders, it's a wonder any of us ever make money.

But you have to stick at it. See it through. Sure---feel free to make improvements, or add new indicators. But once you have a good system, don't try to re-engineer it. Don't try to tweak it indefinitely. When losses come, just take them as the inevitable part of the life of a trader and move on.

DON'T GIVE UP!

Trading for a living really is possible.

Bill
www.thefxtradingmasters.com
bill@thefxtradingmasters.com