Whether you like it or not, spending a lot of time in the markets is bound to take over certain areas of your life, and that's not necessarily a bad thing. How many times have you had this experience?
will automatically consider the worst case
As traders, we are used to anticipating potential factors that could invalidate a trading idea.
Before entering a position, we usually look to see if there are events that may cause the price to move against our expectations, so that we can adopt an appropriate risk management strategy.
That's not to say we've been pessimistic all the time. It's just that we repeat a process: ruminating over what could go wrong so much that it becomes a habit in our daily lives.
I have my own trading experience and am thankful for being able to use this process when making major life decisions!
tend to think too much
When a setup is presented, traders are encouraged to consider various market conditions that could affect the trade in some way.
This typically involves considering what might happen if a report falls short or tops expectations, and what trading adjustments would need to be made.
It’s no surprise that we sometimes get too preoccupied with imagining all the different scenarios that could happen, even when it involves just one very simple decision.
It's good to think about situations, but sometimes it can be bad because you might feel overwhelmed and end up doing nothing.
Can control own expectations and reactions
In the trading process, planning transactions and making trading decisions also need to focus on the big picture.
Enough trading experience to understand why some top reports or central bank announcements don't trigger huge price reactions when expectations are priced in for a considerable period of time, or markets operate against a different backdrop.
Overall, this helps us put things in perspective. If several factors determine your anticipation of a particular event, you will generally not overreact, even if other people overreact. If the unexpected happens, you can take the time to adjust and rationalize your tendencies.
get out of trouble very quickly
Every trader experiences losses, and while it can be frustrating at first, you eventually learn how to work your way out of it.
Even seasoned traders experience losing trades or large drawdowns from time to time, but are mentally and emotionally strong enough to - as Taylor Swift says - get out of it, out of it.
Of course, this does not mean that trading can turn us into robots, completely free from negative emotions. Just a few examples of trying to bounce back from losses, giving us more confidence in overcoming small setbacks in trading and life.
You shake your head when you see the spread on the FX desk at the airport
Before starting your trading career, you probably didn't pay much attention to currency prices over the counter. At best it was compared to whether it was cheaper to buy foreign currency at the bank or at the airport and then whipped out cash without thinking.
But now that you've spent a fair amount of time looking at charts and noticing where certain currency pairs are at the end of the day or week, you're likely to be skeptical of what prices are being bought and sold on commercial forex desks. "300 pip spread? Are you kidding me?!
Add
