If I was to tell you that you that there was a 100% guaranteed way to be a better trader, that was also 100% risk free and doesn’t need any effort on your part, would you believe me?
I don’t really blame you if you don’t… it sounds like a rubbish sales pitch, but give me a minute to explain.
Even though it sounds way too good to be true, the 100% guaranteed way to climb the trading ranks is simple – just do nothing.
That’s it… just sit back, relax and whatever you do, don’t press ‘buy’ or ‘sell’. You see, if you believe the old adage that 90% of traders fail, then do nothing over a given time will automatically boost you into the top 10% of folks trading the Forex market.
Now, you’re probably thinking – I won’t lose money, but I won’t make any money either.
Well, that’s correct. But let’s go a little further into this concept.
The importance of one good trade
First, ask yourself how may trades you need to take each month to make decent money?
Obviously you might have your own definition of what ‘decent money’ is, but the answer to my questions is just one. That’s right, one A+ trade setup is all it takes to make decent money trading the Forex market.
It’s worth adding that not every trade is going to be a winner, but if you are being extremely selective in choosing that one trade per month, it should go without saying that you’ll be taking only the very best setup.
Now, whilst this is a hypothetical example and most traders will take more than one trade a month on average, the ‘less is more’ idea is still extremely valid.
The cost of opportunity
When it comes to trading, you can never underestimate the importance of maintaining emotional stability. The key element to maintaining this stability is to trade less frequently.
Truth be told, you’re never going to be 100% right with every trade, and all too often you’ll find yourself chasing setups all over the place which can only result in more losses. This creates emotional chaos and prevents you from seeing the forest through the trees so to speak. Ie, High quality trade setups that a worthy of your trading capital.
The market isn’t going anywhere
One word. FOMO! Probably the most common issue that new traders suffer from is the fear of missing out on potential profits.
These traders feel that they must always be in the market in order to make money. The truth is, Forex trading is a marathon, not a quick sprint. Yes, you have to trade to make money, but the idea that you have to trade every day to make money is just nonsense.
Out of the market and your capital, the market is the only thing that’s not going anywhere… but it’s completely up to you about your money. Knowing that the market has an endless lifespan as opposed to you cash should really hammer home the importance of preserving your trading capital.
Wrapping it up
Generally speaking, when you do nothing you’re considered lazy… it doesn’t accomplish goals and you don’t typically progress.
However, in the world of Forex trading, the ability to do nothing has an immensely strong correlation with making consistent profits. To truly turn a profit as a trader, you not only have to be able to do nothing when conditions aren’t favourable to your trading plan, but you have to embrace doing nothing in these times.
Only when you’ve learned to love being out of the market will you be able to make consistent gains.
Source: Vantage FX Blog