When its Good to be Wrong
Forget everything you ever learned about being successful at work, in forex spread betting it counts for nothing. There’s a reason for everything we do, mostly its sub-concious but it exists whether you like it or not. So, if we want to change an existing behaviour we need to understand why we’re behaving that way.
Psychologists will tell you that a majority of our beliefs and perceptions – the things that determine our behaviour – were formed in early childhood. They exist in our unconscious mind, so for the most part we are unaware of them, but they dictate the choices we make and the way we deal with our environment. Hopefully our beliefs and perceptions serve us well, and help lead a happier life, but we must accept that many don’t. Some never did, others have just gone past their use by date.
Take an infant for example. In the beginning he doesn’t know that touching a hot plate is painful and dangerous. At some point in early life he will touch a hot plate and burn himself. This will ingrain a belief into his mind that will determine his future choices and protect him from getting burned again. In adult life he will not remember the first time he was burned, or the real reason why he does not touch hot plates, but for the rest of his life this one experience will influence his decisions.
When it comes to forex spread betting, a lot of what we have learned, and the beliefs we have formed about success, are in fact counter-productive. Lets examine these for a bit.
What we are taught about general success in work:
- Don’t ever quit.
- Be decisive, don’t ‘umm and aah’.
- Take charge and be in control.
- Lead the way.
- Always be certain.
But, when forex spread betting, we need to:
- Quickly get out of a bad trade (quit).
- Always change our minds based on new market condition (don’t make quick decisions).
- Follow the market (don’t try to control or lead the market).
- Be comfortable with risk (be uncertain).
This list is by no means exhaustive. But, do you see how the two belief systems are completely at odds with each other. The first list will undermine your success in forex spread betting.
Let’s go a bit further. Why would you not use a stop loss, or not cut a losing trade? Or, why would you take profit too quickly? What type of belief system would cause you to behave this way?
- Losing is a bad thing (don’t be a loser).
- Don’t ever be wrong, always be right (we’re taught this in school).
- Take what’s on offer, don’t miss an opportunity.
- Don’t lose what you’ve worked hard to earn (fall from grace).
- Achieve a sense of well-being through success and not failure.
- There’s nothing wrong with the above list, in other aspects of life these are prerequisite for success, fulfillment and happiness. The problem is that we look to the markets to affirm these beliefs, and enable them. But, in the end, the market doesn’t even know you exist, let alone care about your beliefs.
So, what do I do now that I know this?
Well that’s the really hard part. First of all accept that acting out your need to be successful is irrelevant and futile when it comes to profitable forex spread betting. Forget everything you believe, it will get you no where. The next step I suppose, is to continue your forex spread betting education by reading, practicing and sharing.
Remember that trading is the one thing in your life where being wrong is a good thing.