Various aspects and new insights can help traders achieve success in forex trading, including local wisdom that often contains valuable lessons. As I’ve frequently mentioned, having a trading plan is crucial, especially for novice traders. This advice is also relevant for experienced traders who may lose motivation after experiencing several margin calls (MC).
As Benjamin Franklin wisely said, "If you fail to plan, you are planning to fail." This statement has been relevant for over 200 years and remains applicable today. While it doesn’t guarantee instant success, having a consistent trading plan can enhance your quality as a professional forex trader over time. Patience, dedication, and openness to new insights are key to achieving success.
Understanding a Trading Plan
Understanding a trading plan is not overly complex. It mainly consists of two essential parts:
Trading Strategy: This includes planning and anticipating that our analysis may not always be correct. It involves preparing for worst-case scenarios and having backup strategies.
Risk/Reward and Money Management: This is crucial for managing risk and potential returns. Understanding these techniques requires in-depth knowledge of various trading methods, monitoring global economic conditions, fundamental data, and external factors influencing market sentiment.
I also recommend supplementing your knowledge with insights into price action and candlestick patterns. These techniques often provide quicker indications of price movements compared to technical indicators.
Addressing Psychological Factors
Beyond technical elements, another challenging aspect to master is oneself. Emotions and feelings often affect our judgment and analysis in trading. A friend once said that forex trading is more about confronting oneself than dealing with the market or other traders, and I agree with this view.
The adage "Trade only what you see on charts" is often overlooked when our psychology or emotions are unstable. Unstable emotions can paralyze anyone, including professional traders. When facing psychological instability, I often suggest a simple solution: turn off your computer or laptop, take a deep breath, and engage in calming activities like drinking coffee, watching TV, or going for a walk. While this may seem simple, each individual might have a unique way to "conquer" their emotions.
Local Wisdom Insights
Our country is rich in local wisdom that can help maintain stability while consistently following a trading plan. One such example is the Javanese proverb "Ojo dumeh, ojo gumunan, ojo kagetan," which translates to: do not be arrogant, remain humble; do not be easily surprised or overly amazed; and do not be easily startled or overly reactive to certain conditions. Stay patient, self-aware, and vigilant about changes.
Both the proverb "If you fail to plan, you are planning to fail" and "Ojo dumeh, ojo gumunan, ojo kagetan" complement each other and remind us of timeless wisdom. Combining these principles can guide us towards success in trading and help maintain mental stability amidst the dynamic challenges of the market.
.jpg)
.png)
.jpg)
.png)
