Our goal as forex traders is ultimately to make money, but the idea that you can make money everyday isn’t realistic with what the market offers us in terms of trading opportunities. Today we’ll look at why people expect to make money everyday from the markets and what problems can arise by expecting to make money each day.
Trading Is Not A Typical Job
Forex trading is like no other job on the planet.
You decide when you want to go work and you’re in charge of making all the key decisions. It has far more in common with running a business than it does with normal job. Few people actually treat forex trading as a business, instead they treat it the same as going to work, i.e you should make money every day and you should always be doing something which occupies your time throughout the day.
These beliefs of making money every day and doing something which occupies your time come from the experience forex traders have of going to work.
In any other job you would be paid a wage for the work you do, it doesn’t matter how much effort you put into the work or how you feel when you’re at work you know at the end of each day/week or month you are going to be paid by your boss or employer.
Forex trading is different, there isn’t anyone who is going to pay us money for trading the markets, it’s up to us to make our own money. In a way this is a good thing because the amount of money to be made trading forex far outweighs that of any other job, the problem is the emotional turmoil we face in trying to make that money is much much greater than we could possibly have in other jobs.
The traders who work in banks have it much easier than us because they get paid a salary onto of a bonus they make from their trading profits. They do not feel the emotional ups and downs of making and losing money because they know at the end of each day they going to be paid. Dealing with losses is much easier for them as the money they are losing and winning is not there’s, it’s the banks, so the bank trader have very little attachment to the money to the money they are putting at risk allowing them to trade in the most conductive frame of mind.
The Problems Of Expecting To Make Money Everyday
If you go into the market expecting to make money each day you will be putting a huge amount of pressure on yourself to perform at a level which is nigh on impossible.
The pressure is what will cause you to make mistakes. If people feel like they need to be making money each day then they’ll do things which they feel will help them achieve that goal such as taking trades which do not meet the criteria of their trading plan or risking more money than what they should be risking.
The biggest issue which I believe manifests itself when people expect to make money every day is placing too many trades.
Typically in normal jobs your required to do some sort of task in order to get paid. This task usually requires effort and will occupy you for most of the day. In forex trading our task is to make money using our own money, making money means we have to wait for setups to appear on our charts which we define as an opportunity to make a potential profit.
This ‘waiting’ is the reason why people end up placing too many trades.
Transition from a normal job to trading forex can be really hard for most people to deal with because of the fact they have to sit in front of the computer all day and wait for a trading setup to appear. In their previous jobs they’ve probably spent the working day occupied with some kind of task they have needed to complete, with trading there isn’t any task to do which means people can become easily become bored with the lack of action taking place.
People think if they’re not doing anything then they’re not working, therefore they must be doing something in order for them to feel like what they’re doing is actually work.
What this translates into is the trader placing lots of trades.
He’s not placing trades because lots of opportunities have appeared, he’s placing them due to the fact he’s bored and sat around not doing anything, he thinks trading is the same as going to work and that sitting around not doing anything means he isn’t working.
The trader hasn’t understood that forex trading requires you to learn skills which have likely not been in use when working in other jobs. Skills like patience are essential to successfully trade the forex markets yet the trader hasn’t learned how to be patient because it’s not something he has needed in previous jobs.
Making money everyday is an unrealistic expectation which will do nothing but harm your trading of the markets. You need to shift your thinking from making money everyday to making money every week or month. This way you wont put yourself under any pressure which will cause you to make silly mistakes, like taking setups not part of your trading plan.
Really it makes no difference if you make money every day, consistent profitability is measured over weeks and months, if you think making money every day means you’re a consistently profitable trader then I can guarantee far fewer consistently profitable traders exists than what you have been led to believe.