is about techniques to reduce or eliminate stress. Stress is unhealthy and
gets in the way of profitable trading. One of the keys to reducing stress is
to think in terms of probabilities rather than in absolutes.
Think of the stress when you put on a trade and naturally think, “I’m
going to make money on this trade.” That is what we normally think when
we put on a trade. Actually, we should be thinking, “I’m probably going to
make money on this trade.”
The first statement will create a lot of stress if you have a losing
trade. You internally predicted something that didn’t come true. You were
wrong. You don’t want to be wrong. You feel stress. The second statement
creates far less stress if you have a losing trade. You predicted
that you would make money but you also predicted that there was a fair
chance that you would lose money. You were sorta right and sorta wrong.
Big deal.
I turn a profit on less than 50 percent of my trades but I am still
a money-making trader. So my internal prediction is, “I’ll probably lose
money on this trade but I will make money on my trading.” How much
less stress is that? I’m actually predicting that I will lose money on this
particular trade so I feel like a smart guy when I do have that losing trade.
As traders, we must be both humble and bold at the same time. We
must be humble and realize that we will have many losing trades, hundreds
of them, thousands of them. Get used to it. It’s no big deal.
At the same time, we must be bold so that we have the courage and
discipline to get up tomorrow and put on a new trade. We must also be
consistent and persistent. We must be a machine. A money machine.
We have a winning trade. Then continue to execute flawlessly. We have
a losing trade. Then continue to execute flawlessly. We have five winning
trades in a row or five losing trades in a row. Then continue to execute
flawlessly.
Don’t get frustrated. Don’t get bored. Don’t even get excited. You are a
money machine. You are the casino. Execute. Execute. Execute.
Source: How to Make a Living Trading Foreign Exchange: A Guaranteed Income for Life (Wiley Trading)
