We have heard plenty about the need for preparation in trading as well as the importance of risk management. Both of these are no doubt crucial to this business, but where does one stop?
Surely, when you are trying to get something done there should also be some prompt to actually do it.
Sometimes, the way to find out if something is right for you is to just do it.
So if you were looking for a sign to officially start, then this is it. Keep reading.
By overthinking we mean that you plan and think to the point that no course of action seems good enough to go through with.
This kind of block is faced by most people in business or even artistic pursuits. It causes a slump that one can find hard to climb out of.
The best way to deal with it is to dissect it. Ultimately you want to get to the root of the problem so that you can address it.
Getting to the root of the problem
It is important to understand what is causing this lack of action. What is the fear behind it?
There could be a number of reasons why you find yourself in this state of dormancy.
Let’s go over them one by one.
Ego is pride. Some may interpret it as being a person’s self-respect too. A lot of times we tend to think of it as something bad but it isn’t necessarily a negative entity in itself.
It is the desire to be right and to be successful. We all have it.
This is also that which will often cause a paralysis of sorts when trying something new because you don’t want to be wrong and make a fool of yourself.
If you want to make it as a trader you need to be able to put these thoughts down and get to work.
Everyone struggles. No one is great right from the start. That is just not a realistic expectation to have from yourself so don’t put that kind of pressure on yourself.
⦁ Past failures
Another very valid reason that might lead to overthinking and eventually not trusting yourself enough to make a move is failure.
Perhaps you have faced some failures in your past experience as a trader which have shaken your self-confidence in your abilities as a trader.
This is not a rare happening. In fact, it is unfortunately all too common.
The key here is to understand that losses are part of trading. There is no running from them.
The sooner you accept it the sooner you will be able to take them in your stride and move on after a loss.
It is a matter of perspective. You can either see a loss as just that, or you can see it as failure.
The way you look at it, the amount of pressure you put on yourself will decide where you are able to go from there.
⦁ Not having enough knowledge
This is an issue that many beginners face but one that can fortunately be tackled.
The extensive amount of information that is available online can become quite overwhelming. Some traders might just abandon the whole knowledge part altogether and move on to the practical hoping that they will learn in the field.
The issue with this type of learning is that it is your hard-earned money that’s at stake so it might end up proving to be more disheartening at the end of the day.
The way this can be solved is by starting small and taking baby steps up. To start, you can take a look at this free beginner’s course.
Once you’ve developed a basic understanding of these topics you can graduate to slightly more advanced ones.
⦁ Believing that there is a secret to winning
A lot of new traders or aspiring traders can be found asking; what is the secret to successful trading?
The thing they need to understand is that there is no secret to successful trading.
This is what successful traders do:
⦁ They develop a good understanding of the market by educating themselves and working on their analysis.
⦁ They can anticipate what direction it will take to a certain extent based on that understanding.
⦁ They don’t let small losses stop them.
⦁ They are consistent and disciplined.
If you refuse to believe that the secret is hard work there is nothing much anyone can do for you.
⦁ Information overload
While educating yourself is important you also need to know which information is important and which is not.
It is possible to get to a point where all you are doing is stuffing irrelevant information in your brain and crowding it.
This type of information overload will deprive a trader from being able to carry out an effective analysis.
You have to get rid of the noise in your mind and on the chart and train yourself to focus on the important bits only. This will of course take practice, like most things in forex, but if you are planning to do this for a long time then the more value you place on the habits you form in the start, the better it will be for you later.
The two ways in which a lot of traders overload their brain with unnecessary information are:
⦁ Using short time frame charts
⦁ Watching financial news all the time
Both of these do the same thing; they distract from the real information. You might be familiar with the concept ‘work smart, not hard’. That is what you need to apply to trading too.
Remember that excess of everything is bad and that ultimately hard work and discipline are your best friends.
To make sure that you are doing your best is to decide how much hours you should put into trading every day to be able to achieve the kind of results you are looking for and then do it. Do it consistently and use that time as efficiently as possible and surely you will find yourself in a much better place than you were at the start.