The Importance of Mental Preparation when Trading Forex
This aspect of trading is considered by many to be the most important one of any Forex trading methodology. Those traders who expend the necessary effort on mastering their mental preparation can significantly reduce the emotional and psychological difficulties that others often encounter. Mental preparation is all about your trading mindset. Great traders have the ability to mentally rehearse all their trades and rules. These top traders train themselves to preview their potential trades in their mind before they actually occur. Most people will say, “I’ll believe it when I see it.” In contrast, top traders, state “I’ll see it when I believe it.”
One does not have to look far to see the power of mental rehearsal because it is very common in professional sports. For example, when attending skiing events, you will find that it is a common sight to see professional skiers mentally rehearsing their runs even before they have strapped on their skis. Golfers are another sports group that practice mental rehearsal. Jack Nicklaus was quoted as saying that he has never missed a putt in his mind.
These professional athletes have developed a process for mental rehearsal. They have done so because they clearly acknowledge the value in performing this task since it certainly assists them in being the top at their game. Similarly, we as traders want to be at the top of our game whenever we open new positions. As these examples clearly demonstrate, there is great value in studying your trading rules through your mind’s eye as well as taking your new potential trades through mental rehearsal in a similar way to that employed by top performers as just described.
Now that you have mastered the intricacies of a methodology, you want to measure how successful you have been with understanding its concepts. You can achieve this task by utilizing the key benefits of the demo accounts that many Forex brokers allow their potential or full clients to use. One of the most important points about trading a demo account is to be disciplined in using a methodology exactly in the same way as you have learned it. What this exactly means is that during the phases you must not introduce any new ideas such as new indicators, a new methodology or tweaking your robot.
That does not mean that you cannot take notes of any new key distinctions or improvements that you learn about the market, your methodology or your robot as you are trading your demo account. Do record all your new findings. However, before you can implement them into your overall trading plan, you will need to recommence your methodology by starting again from the first stage in order to systematically integrate your findings to your trading strategy.
One of the main attributes of top professional Forex traders is that they never stop learning about their markets, their brokers, their methodologies, other strategies, their charting software, their robots, and most of all about themselves. A methodology is usually outlined in a linear fashion. However, in reality it should be presented using a circular format. This means that when you have reached this last stage your learning is not over. To become a great trader and remain so, you will need to commit yourself to continuously cycling through all the stages.
One of the most awesome aspects of professional Forex trading is that you can receive immediate feedback on how you are doing. There comes a time in every expert’s trading life when they start to struggle or go into a slump. A proven methodology can help any trader bounce back to peak performance very quickly.
All top traders, regardless of the market they trade, have a detailed checklist for reviewing new potential positions. Consequently, they know immediately if they are not following their own trading rules or if they are not mentally geared to trade the current market conditions. Also, top traders have the ability to constantly find new ideas, new ways to trade and new methods in order to increase their profitability by undertaking constant reviews.
In summary, a methodology is the mental process that you will apply to trade Forex using a strategy or robot, etc. Consequently, it is necessary to perfect your mindset as a top priority in order to ensure that you are in full control of your trading actions.