Focus on the trading process not the money

[analyst75]

It may seem a contradiction to say that you don’t want to pay attention to the profit of a trade.  In fact, many of you might be saying that this guy must be smoking rope to say that profit is unimportant.  Well, to clarify, that is not what is being said.  Of course, profit is one of the main reasons why you are involved in trading in the financial markets.

 

However, when we discuss how you will garner your mental and emotional resources in order to become consistently successful, profit (in any one trade) is not where you want your focus to be. Profits come as a result of “probabilities” over a series of trades. In fact, profit can be a major distraction and the cause of erratic behaviors that beget unwanted results.  Let’s face it, results, consistent positive results, are what you want.Tweet: Let’s face it, results, consistent positive results, are what you want. Anything else is unacceptable.  So, your main trading trajectory must encompass this reality.  Consistently successful trading requires a laser focus on what-matters-most; alignment of body, mind and emotions; and an ability to be truly disciplined, for starters.

 

Honing your trading process and the focus of your trades.

 

The Distraction of Trading Profits

Let’s look at how focusing on profit can position you to attract the very undesirable results that you want to avoid.  Profit is transient which means that it is not only variable but it is random to the point of being capricious.  No matter how good your methodology, you cannot predict what price action will do.  The only thing that is certain about the markets is that they are unpredictable.   Due to this level of randomness, profit is an extremely inefficient data point to measure against results.

 

In fact, one of the worst things that can happen to you as a trader is to be profitable early in the game before you intimately know your strategy.  This type of profit is almost invariably luck.  Luck is totally unsustainable; and in your attempt to replicate these results you will reinforce bad rule violating behavior that is very hard to halt, creating many more losses as you attempt to extricate yourself from that abyss.  Furthermore, when you focus on profit alone, your attention is fragmented and your mental state is susceptible to distorting data due to a confirmation bias (the tendency to only perceive information that confirms your limiting beliefs about the current market and consequently denying information that is contrary but critically important).

 

Actually, you want to approach the trading process with your eyes wide open and embracing the fact that any trade can lose, and some will.  No matter how strong your strategy, you must accept the randomness of the markets and therefore be very serious about protecting your capital; in other words, using and relying on your stops.  In this way, you will begin to manage your fear…a very important skill.

 

One of the facts about consistently successful traders is that many of them have blown up accounts; and they came back.  When this happened, they realized that the world didn’t come to an end and developed a deeper appreciation for the importance of their stops.  They created consistency in planning their trades, trading their plan, following all of their rules, and thereby developed the capacity for emotional strength and endurance in the trade.

 

Trading is a process oriented endeavor for those who are serious about becoming and remaining a consistently successful trader.  In any one trade, it is not about the outcome.  You must remain dispassionate about that and reserve all of your focus to be honed on what you are doing and how you are doing it.  This is what we teach in Mastering the Mental Game online and on-location courses.  Ask your Online Trading Academy representative for more information.  Also, get my book: From Pain to Profit: Secrets of the Peak Performance Trader.

 

Joyous Trading

 

Author: Dr. Woody Johnson

 

Article reproduced with kind permission of the author.

 

Source: http://www.tradingacademy.com/lessons/article/focus-trading-process-not-money/

 

 

  The article is ended with more helpful quotes:

 

“One of the biggest mistakes that newbie traders make is to give up on a trading strategy after a run of losing trades. The thinking behind doing this is understandable but very wrong. The thought is “If a strategy is losing trades, why keep doing it?” The point is that every trading strategy has losing trades!” – Jasper Lawler 

 

 

“Always keep in mind that trading is mainly a mind-game playing probabilities. Try to find a strategy that you understand and that fits to your personality and possibilities and then try to build the trade management together with the risk management around it. This will lead to much better results then searching for the best entry technique of all times.” – Andy Jordan

 

 

“Trading is not for anyone who has an unquenchable thirst for certainty. Uncertainty in trading is co-equal with insecurity.” – Joe Ross

 

 

“However, the truth is probably like most things somewhere in the middle and eventually with a level playing field (which there will probably never be) it comes down to the individual. In part this is why I like trading, it is a reflection of who you truly are, not what your circumstances have made. The market has no idea where you are from, what your social status is, your colour, your religion or your sex. It merely knows whether you have the attributes of a good trader or you don’t.” – Chris Tate

 

 

 

www.tallinex.com wants you to make money from the markets

 

[arjumand]

In my opinion if we try to earn pips we will at the end of day earn $$$ automatically so the more processes we learn the more we will be earning from this forex trading market.

[Sininfinity]

“One of the biggest mistakes that newbie traders make is to give up on a trading strategy after a run of losing trades. The thinking behind doing this is understandable but very wrong. The thought is “If a strategy is losing trades, why keep doing it?” The point is that every trading strategy has losing trades!” – Jasper Lawler 

 

 

This is true. At the beginning I did this and changed several systems because they did several consecutive losses. It took time to accept the fact that losses with every strategy will happen but mistakes were mistakes. Good thing I learned from them.

[pepy]

I really do agree with the thread starter here, many of us focusing on the result but tend to forget the process which teach us a lot of how to reach the end. Well, the result or money is important but if we messed up with the process(analyzing and manage the risk) we won't be able to trade better than what we want.

[bigxy]

In my opinion if we try to earn pips we will at the end of day earn $$$ automatically so the more processes we learn the more we will be earning from this forex trading market.

I think forex trading is a complete cycle, learning it and earning money requires some time so better learning it before jumping into earning.

[myregister]

You made the mistake if you think that our purpose to trade is not money, it is actually money. We make profit by trade and we speculate in the market, 80-90% which makes the movement of the price on foreign exchange is speculation from all players inside. The process is still important but it doesn't mean your purpose(profit) is not. Both are important things to take care of, so focusing on both are a good idea especially in sequences.

[pepy]

You made the mistake if you think that our purpose to trade is not money, it is actually money. We make profit by trade and we speculate in the market, 80-90% which makes the movement of the price on foreign exchange is speculation from all players inside. The process is still important but it doesn't mean your purpose(profit) is not. Both are important things to take care of, so focusing on both are a good idea especially in sequences.

Denial of the fact that we trade in forex because of money, yes we are money oriented. Who wants to spend their time to trade in a business where the income is lower than typical current offline job which is safer than forex? But actually the very first thing is money and then second is flexibility which attracts people to join forex.

[Sininfinity]

I think forex trading is a complete cycle, learning it and earning money requires some time so better learning it before jumping into earning.

 

Actually it will require a trader to have a trading plan which will bring positive pips over the long term. Learning is a never ending process and should be that way in my opinion. But we are in this market for profit while we are working in this market we should be able to generate profit for us.

[myregister]

Denial of the fact that we trade in forex because of money, yes we are money oriented. Who wants to spend their time to trade in a business where the income is lower than typical current offline job which is safer than forex? But actually the very first thing is money and then second is flexibility which attracts people to join forex.

Sure, I don't see any viable reason why somebody wants to trade in forex for the sake of the hobby, the market itself is money or profit oriented which makes it a pure market speculation except when you are a trader which hired by central banks which doesn't have any interest in making profit, just a stable currency movement.

[pepy]

Sure, I don't see any viable reason why somebody wants to trade in forex for the sake of the hobby, the market itself is money or profit oriented which makes it a pure market speculation except when you are a trader which hired by central banks which doesn't have any interest in making profit, just a stable currency movement.

I agree with you we are not central banks which up to now still don't have any signal to make profit. We are speculators, traders, or someone who want to make profit. We are just small fry but trying to make money in this big ocean. The focus should be both risk management and an accurate analysis for better prediction.

[gds221]

As for me, everyone can focus on what he is comfortable with - whether it is trading, or money. The main thing is that the goal is still one - to make a profit.

[Vaabum]

It is important to do this in order to properly process all signals and information. The profit will be the result of the right work.