Exposing Our True Colors

One of the first things I learned trading futures and forex is that trading will expose your true colors. Many people may think they have patience but the market will let you know if your deceiving yourself. The market will expose every character flaw you have to the point of wanting to start taking medication for it. If you are greedy the market will tell you. If you are quick to anger the market will show you. Now, if you've been trading long enough you'll know exactly what I'm talking about. In fact, I would bet that many of you reading this have been tempted to throw your pc right out the window. This is very normal.

The obstacle of greed can be overcome but we must face our expectations. To do that we must deal with our own ignorance. Now ignorance is not necessarily a bad thing. It's just lack of proper education thats all. Remember the movie Karate kid? Mr Miagi once said, "There no such thing as bad student, only bad teacher." Forex teachers are a dime a dozen but what makes then good verses bad is all the hype they teach or don't teach. This business is loaded with it, and educators use it to lure in every newbie they can market to. Ever go to a website that sounds more like infomercial? Red flags!

When I first began trading I had a teacher that taught some decent technical analysis but he also hyped us up a lot by making us believe that his system was the only one out there that was of any value and it was important that we isolated ourselves from anyone but him. Eventually, he convinced us that he was some kind of Wall Street prophet. Grant it, he did teach some valuable things about technical analysis but he set us up for utter failure by teaching us how to be greedy. To make a long story short he taught us that our returns were "expected" to be around 40 to 50 percent per month. Now I have seen 50 percent returns, but not every month! In fact, 50 percent returns for most successful traders are maybe once in a blue moon. But you see, that is what we were taught to "expect" and it set us up for disaster as all we could see were dollar signs. Eventually, I got educated and I learned the truth!

It hasn't been an easy thing to do as I had to unlearn what I had learned. Expectation with something you cannot control (being the market) causes discontentment. Discontentment causes stress, lack of patience, and eventually a blown up trading account. To overcome this, I had to accept a very valuable principle and that is, 50% "annual" returns is not a bad thing! In fact, it is foolish to believe that it is. Thats just over 4% return every month. Thats better than any 401k I've ever heard of.

If a trader/student can accept this principle whole heartedly, then the bigger returns are much easier to attain. But the first thing that needs to happen is that you should never expect it. If you made anything, you did good. If you made 10% in one month, hey thats really good! Learning to be content as a trader is great gain in itself, and quite possibly, can lead to greater gain within your trading account. Wow, good character and success! Who knew?

Cheers! Richard............... Copyright December 30th. 2008 Do not copy without permission