Mindset of A Successful Trader

No Forex trader is without losses. But there’s a distinct difference between how the beginning trader loses and how the best Forex traders lose.

What’s the difference?

Mindset.

Most starting out in the Forex market view a loss as a bad thing. It’s a way of signaling that they did something wrong.

And doing something wrong is bad. At least that’s what we’ve come to believe over the course of our lives.

However, the successful trader doesn’t view a loss as a “bad” thing.

It’s also not something the market did to you. The Forex market doesn’t know where you entered or where your stop-loss order is located.

Unlike you, the market is always neutral. So when you lose, it’s a matter of reflecting on what you could have done better.

Don’t get me wrong, nobody likes to see a trade go against them. I don’t care if you’ve been trading for one month or ten years, it’s always more enjoyable to make money than to lose it.

That being said, just because a trade doesn’t go your way doesn’t mean you should take it personally. Thinking this way will only dig you a deeper hole.

The successful Forex trader has the mindset that a loss is simply feedback.

It’s the market’s way of disproving a trade setup. That’s the only thing the Forex market has the ability to do because it doesn’t know anything about you or where you entered the market, nor does it care.

Losses can be a powerful way to learn. Just remember that even a trade that ends up as a loss can be the right decision.

How is that possible, you ask?

If you’ve defined your edge, and the setup met all of your criteria to enter the market, then you did all you can do. The rest is up to the market, and some days the market just doesn’t play along.

Next time you have a loss, take it as constructive feedback. Analyze the situation to see how you can improve the next time. Keep in mind, though, that even an A+ setup doesn’t always work out.

I’ve had many trade setups that didn’t work out that I would gladly take every single week.

That’s because I know that my edge will win over time and put money in my account. In fact, a good exercise after a losing trade is to ask yourself, “would I take this same setup again next week if it presented itself?”

You should always be able to answer this question with a resounding “yes”.

If you answer with a “no”, you need to take a step back, determine where things went wrong and correct it for the next trade.

Start seeing trading losses as business investments rather than upsetting events. Each loss is an investment in your trading business and ultimately your trading education.

The money you put at risk on any given trade, whether it’s $5 or $500, is an investment with the best Forex coach in the world—the market. Keep an open mind and it’ll show you everything you need to know.