3 Reasons Why You Fail to Reach Your Trading Goals
Most people upon learning forex trading is obsessed with making quick profits. They focus more on the profit rather than the process. However, to be a successful trader, you should focus more on latter.
A disciplined trader following his trading plan since day one can turn odds in his favor and know when to put the feeling of greed in check. Controlling your emotions when placing a trade is one of the most important skill you can learn as a trader to minimize the risk of setting mindless trades.
Although experience is likely one of the best modes of learning in forex trading, learning by experience without following your own discipline, trading plan and risk management is as good as not learning anything at all because without this certain set of rules that you should impose to yourself, you will never know why a certain trade went against you or what went wrong in your trading decision.
In the end, without coming to any conclusion as to why the market seems to go against you, frustration will set in and giving up might be the only option you will have.
As a beginner trader, you will come across a lot of issues or problems in the succeeding months of your trading. If you find yourself stuck in the same issue month after month or maybe years, the reason might be one of the following:
You don’t have a plan
Always remember that if you failed to plan, it just means that you plan to fail. Solutions to your trading problems should be taken seriously and no matter what happens in the market, you should always execute this plan whether the market is in your favor or goes against you.
Each trader has his/her own trading plan and it varies depending on their mental and emotional capacity and one that suits their everyday lifestyle and needs. You should make your plans based on how you react to the market and only risk a percentage of your entire account per trade that is viable to you.
Set a trading goal that works. List down concrete steps that you can take religiously every time you go in a trade and set a schedule to follow them through. Set metrics to help you gauge your success if that helps.
You should actively think about your plans in every trade
Let’s say you have made the most detailed trading plan but if you don’t think of your plan consciously every time you make a trade, you will definitely fail in meeting your trading goals.
Let’s say in every trade, you plan to risk only 0.50% per trade to minimize any risk when a trade goes against you. Suddenly, an intraday trade opportunity pops in and you see a very high volatility in the market in this particular trade. Your emotions kick in and you tell yourself that you can take advantage of this volatility and that you are so sure that you will profit in this trade in just a matter of minutes.
You increased your risk to 4% in this trade. By doing this, you completely blew your trading plan just because you “felt” so sure about this trade without even putting into consideration what your trading plan tells you to do.
After a few minutes, your 4% trade turned out to be a profit. What will happen next? Most likely, greed will kick in and will obliterate your trading plan completely. After this profitable trade, you will feel that you can keep on taking advantage of this market more and you will keep on placing trades like this for fear of “missing out” on a great opportunity.
These little cheats and breaks that you give yourself might not affect you in the short-term, but they will eventually add up to break your momentum. The next thing you know you’ll be listing “use dynamic position sizes” in your goals next year.
You’re not tracking your progress
The most common reason why you can’t solve your issues or problems in trading is because you don’t know how much you have progressed or you can’t point out the areas in which you are having problems with.
A trading journal is where you can see if you are closer to your goals than you were a week ago, which areas you should improve on, which strategies works best for you, which trading session you are more comfortable in trading, and so on. The trading journal is perfect for this purpose.
Regularly revisiting your progress not only serves as a “cheat sheet” in case you slip and repeat at bad habit, but it also helps put your trading goals in your thought process when you trade.
Remember that trading is a marathon and not a sprint.
If you want to continue your trading career and be consistently profitable, you must address your trading issues and get into the habit on working on your trading plan and follow it religiously.
The rewards in forex trading is tantamount, but before you harvest these rewards, you should put in the time and effort in studying it and to discipline yourself to be mentally and emotionally ready for the surprises in the market.
Don’t forget to follow and subscribe for more updates about market trends, analysis, forex news, strategies and more!
Do you want to learn more about forex trading? Sign up now on our FREE forex webinar and reserve your FREE seats while it still lasts!
Risk Disclaimer:
Information on this page is solely for educational purposes only and is not in any way a recommendation to buy or sell certain assets. You should do your thorough research before investing in any type of asset. Learn to trade does not fully guarantee that this information is free from errors or misstatements. It also does not ensure that the information is completely timely. Investing in the Foreign Exchange Market involves a great deal of risk, resulting in the loss of a portion or your full investment. All risks, losses, and costs associated with investing, including total loss of principal and emotional distress, are your responsibility.
Don’t forget to follow and subscribe for more updates about market trends, analysis, forex news, strategies and more!
