Getting StartedPsychology

Looking at the Big Picture

When you begin trading, the one thing you want most is success. You are trying something new. Most traders first starting out feel unsure, a bit uneasy. You’re taking a chance with your hard-earned money; there is big risk involved. I don’t know of any beginning trader who plans on failing, yet the possibility is there, and it is beyond your imagination to consider what you’ll do next in the event you fail. It has been our experience here at Trading Educators, that many beginning traders never even consider failure as a possible outcome of their attempt at trading. In fact, it is often just the opposite. Apart from being a bit apprehensive, most feel impervious to failure, if they think of it at all. I have never met a beginner who had to fight off catastrophic thoughts of what might happen if he blew out his account. This is true even after reading (if he read it at all) the many warnings that trading is a high risk occupation and there is a possibility that one can lose all of his money.

It is not until you experience your first loss or first series of losses that you begin to feel a sense of urgency and desperation; seeing your money rapidly disappearing before your eyes can be overwhelming and distracting. The impending or realized losses cause you to focus on the current set of trades, and you feel you have to succeed.

Interestingly, beginning traders, as well as many experienced traders we have met, exhibit a strong tendency to believe that all of their short-term objectives must immediately be met. But in the long-run, it is actually better to hold a long-term perspective.

You find yourself "between a rock and hard place."

On one hand you are urgent in your feelings that you must succeed. This sense of urgency causes you to put a lot of pressure on yourself. That pressure can cause you to make some serious mistakes when a trade is going against you. On the other hand, you subconsciously know that trading can’t be all that easy. You know from reading, studying, and hearing about other traders, that even though you are experiencing losses, if you are persistent, ultimately you will become a successful trader. Others have done it, why not you?

If you want to succeed in this business, you have to look at the big picture, and sometimes that big picture takes a lot longer to paint than you ever imagined when you first looked into becoming a trader. For some traders, it takes many years of disappointment before they finally become successful. Only those few who never give up tend to achieve success.

All businesses experience losses. I cannot think of a single one that can escape them. Yet losses in trading seem to loom larger than losses in other businesses. I believe it is because in trading the responsibility for losses all fall on you, the trader.

In the long-term, any individual trade is not very significant. At any point in your trading career you have to avoid placing too much importance on the outcome of a single trade. You must not allow yourself to feel badly about yourself when you lose, or feel good about yourself only when you win. Strive to keep your emotions and your self-image separate from your trading. Doing so takes effort, but it is an effort that pays off in the long-run. If you allow yourself to feel confident and successful only when you win, losses can eventually destroy your image of who you are. Keep in mind that even the most seasoned traders have losses.

An experienced trader knows that in trading, there are more things beyond your control than there are things within your control. Realizing that trading is an art form, and not rocket science, helps you to have the right perspective on each single trade. If you have proper risk and trade management in place, losing or winning on a single trade is not going to make or break you.

Looking at the big picture has mental and emotional advantages, especially for a beginning trader. Realize that it can take a long time to become a successful trader, just as it can take long to become successful in any other business. You need time to build your trading skills. You need time to acquire experience in the market. Experience and skill ensure that, over the long term, you will become consistently profitable. Until such time as you are able to paint the big picture, it is crucial that you manage risk and manage trades so that what happens with a single trade has little impact on your account balance. The experience of trading over the long-term allows you to learn how to deal with adversity and to build up the skill-set you need to trade in a variety of market conditions. Time also enables you to develop as an intuitive trader, one able to "feel" the market.

Joe Ross, trader, author, educator, is one of the most eclectic traders in the business.  His experience of 47+ years includes position trading of shares and futures.  He daytrades stock indices, currencies, and forex.  He trades futures spreads and options on futures, and has written books about it all—12 to be exact.Joe is the discoverer of The Law of Charts™, and is famous for the Ross hook™ and the Traders Trick Entry™ . These concepts are explained in detail in a free e-book at Joe's site TradingEducators.comJoe also runs a site focused on futures spread trading, which can be found at http://www.spread-trading.comJoe holds a Bachelor of Science degree in Business Administration from the University of California at Los Angeles. He did his Masters work in Computer Sciences at the George Washington University extension in Norfolk, Virginia.

Joe Ross, trader, author, educator, is one of the most eclectic traders in the business.  His experience of 47+ years includes position trading of sh...

VERTAIR7

Newbie
1 0
BIG THANK YOU

Thanks Joe Ross for your excellent 20/20 hindsight or insight. I feel much better equiped now
with your wisdom to have the foresight needed for the long run as a beginner. Like most Ive read/listened to a ton of get rich quick gurus but i felt apprehensive about buying "The System". Thats how i ended up here...searching reviews on a gurus system. not that some of them may actually work. a BIG THANK YOU as you may have saved me years of costly mistakes...GOD BLESS
 

malaguti

Senior member
2,370 459
Thanks for this thread. It is true that the FX could be worse than quicksand and traders could need more than two eyes to succeed. But the care traders now employ has hatched to financial cowardice. Some traders move slowly about the market because their boots are too heavy with their hearts (afraid). They are very HARD on their HARD-earned money and miss out on opportunities wrapped with risks. There minds can't grasp the big picture as they prefer the smaller picture which is safer and quicker. Like some FX Job, they would patiently allow their profits grow in lazy pips and can quickly close their potentially promising position if the trend slips a little; and are annoyingly leverage-allergic. But I don't see why traders get even afraid of calculated risks. Thomas Edison took a risk a THOUSAND times and got BILLIONS of applause.
traders could need more than two eyes to succeed
you mean 3 eyes, so your saying successful traders must have 3 or more eyes?

miss out on opportunities wrapped with risks
every trading opportunity has a risk associated surely?

Some traders move slowly about the market because their boots are too heavy with their hearts (afraid). They are very HARD on their HARD-earned money and miss out on opportunities wrapped with risks. There minds can't grasp the big picture as they prefer the smaller picture which is safer and quicker
so traders move slowly, but then you say they prefer quicker?

Thomas Edison took a risk a THOUSAND times and got BILLIONS of applause.
You make a thousand losses and see whether you can invent a trading system!

Mightypen I have to say is not a particularly apt profile name
 

wackypete2

Legendary member
10,200 2,044
Like some FX Job, they would patiently allow their profits grow in lazy pips and can quickly close their potentially promising position if the trend slips a little; and are annoyingly leverage-allergic. But I don't see why traders get even afraid of calculated risks. Thomas Edison took a risk a THOUSAND times and got BILLIONS of applause.
Eh, what leverage did Mr. Edison use during his THOUSAND times, or was he also annoyingly leverage-allergic?

Peter
 
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