What Forex Trading and Basketball Have in Common

The foreign exchange market is a very lucrative one. The possibilities for personal profit are literally endless. A trader can make more money trading Forex then they will know what to do with.

However, the flip side is true as well, with a little catch. Just as you can make endless money trading currencies, the risk of devastating loss is also there, but unfortunately, unlike profits, losses have a cap and it's called a margin call. Basically, you have a certain amount of capital to spend and when your account reaches a predefined red line, your broker will close the account.

While your profits can go on forever, your losses cannot. It is every traders aspiration to maximize their goals and minimize their losses, but I am pretty sure I do not have to tell you that. The thought of the tremendous profit potential, can get traders overly excited and ambitious, which might lead them down the path of failure, eventually ending with the inevitable margin call.

There are hundreds if not thousands of articles online guiding traders on how to avoid Forex failures. This list includes choosing a good Forex broker, using an effective strategy, implementing Stop Losses and Take Profits, and much more.

So what does Forex trading and basketball have in common? The answer is , If you have ever played or watched a basketball game, you probably know that there are two types of players. The first one, who is generally less successful likes to “force shots”.

This type of player will get the ball, ignore the number of defenders, and shoot the ball, just for the sake of shooting. Now, of course this player thinks they have some sort of a chance to score, otherwise they would not have shot, but did they take the time to see if shooting at that very moment was really their best option? No.

Did that player think about the team's strategy and what is best for the entire team, or were they thinking about their own statistics at the moment they took their shot? If, for example, that player would have seen that he/she has two defenders on them at that moment, put one and one together and realized that means they have a teammate who does not have any defenders, then passed the ball, chances are the results would have been different.

What they did instead was ignored the open teammate, took the shot, and nine out of ten times, missed. So, what does this have to do with the way you trade Forex you ask? Everything!

When trading your account, you need to take the big picture into consideration. Think about your strategy and implement it to perfection. DO NOT FORCE TRADES! Just like in the game, there will always be another shot, so too, in your trading, there will always be another trade. The best trading option is quite often not to trade. Step back and wait, wait for the next trade to come around. Make a plan and stick to it.

If you force your trades, nine out of ten times, it will lead to losses. However, just like in basketball, missing a shot or losing a trade is not the worst part. The worst part is the kind of player/trader you become. If you force one shot in the game, it is not the end of the world, but when you miss that shot, and force the next shot, chances are your coach will take you out in the best case scenario, and in the worst, you will lose the game for your team.

Same goes for Forex. You force one trade and lose. You think you will stop after one? What will end up happening is that you will attempt to cover your losses by forcing another trade, but this time, the pressure is even higher than your first trade, since you are already in losses.

If you continue down this path, it wont be long before you are taken out of the game. In basketball and in your Forex trading, wait for the right time to make your move, then do it with the highest level of confidence. Do not let the pressure get to you, there will always be another shot to take, just make sure to keep the shot clock in mind.

Lucky for Forex traders, there is no time limit for your trading. You are given endless time? Make sure to use it!