Taking Responsibility for Your Actions - the Forex Way
By: Christopher Lewis
It is something we try to teach our children, but when it comes to trading there are plenty of traders that are not willing to do just this. Taking responsibility for your actions is one of the most important things a trader can do, mainly because it leads to real and true introspection. The trader simply has to be able to be honest with themselves as to what happened in a trade if they are going to learn anything at all by their losses.
The whole point of learning to trade is to understand what works, what doesn’t, and be able to adjust to changing conditions in order to come out ahead in your trading account. It is nearly impossible to do any of these things if you are not honest with yourself, and what actually happened during a trade.
When I speak to traders, I will often hear things like, “The broker decided to do a stop loss hunt.” I hear this one often enough to recognize it for what it truly is: A flat-out denial of responsibility in taking the loss. The big thing with this person is that they feel the need to be right 100% of the time. This is a person that is setting themselves up for failure as the pressure will be far too great for them to feel they can function in an efficient manner.
Another one I hear a lot is a variation of “Trichet came out and killed the trade.” I can assure you that the person that made the announcement wasn’t watching your position. Traders that get upset about this kind of event seem to suggest that the announcement was aimed directly at them, and not as a statement the central banker, politician, or whoever felt necessary to make. It is like anything else in life: things happen. Timing isn’t always going to work in your favor. Besides, the person who complains about this very thing thinks they are a trading genius when the announcement goes in their favor and they make large profits from it.
The main point is that you cannot fall into the “blame the other guy” trap I see so many others get involved with. It is a loser’s game that will only allow you to make the same mistakes over and over as you don’t look in the mirror for the answers to your losses. Also, I should mention that sometimes a loss is a fairly random thing. Sometimes, there is no real deep answer. The market ebbs and flows, and sometimes you are on the wrong side of it is all.
Either way, unless you are honest with analyzing yourself, you will never be able to analyze the market.