How Do I Deal With The Pressure?

You are beginning to like forex trading. You have read every article you can find. You enjoy doing the research, developing your plan and choosing your target currencies. You are comfortable with your forex broker and his trading system. You are gaining valuable experience each day, but for some reason, you are still having difficulty pulling the trigger, perhaps more on sell signals than on buys, but the chatter in your brain is distracting. How do I deal with this kind of pressure?

First of all, let's assume that you have done the basics. You always have a defined and disciplined plan of attack when you approach any market. You do not let yourself get "emotionally married" to any position or pattern that beckons you to stick with it. And, you have learned how to manage your greed and balance it with caution, never backing yourself into a vulnerable position that is difficult to unwind. Now what do you do?

The issue now is all about calming the mind, allowing your experiential programming to take over with the good judgment that you have developed, and then reaping the results. There have been many studies in this area, particularly with professional athletes, so why no let them be your guide.

I am a golfer. You never beat golf. You may get better or worse, but the mental aspects of the game are a mirror image of what an individual trader must deal with in order to be successful. Coincidentally, in order to perform, an athlete or trader must be able to shift his focus from distractions and concentrate on the moment at hand.

Watch professional golfers on television, particularly when they are putting. One putt per round is all that separates them from the minor leagues, so the pressure is intense to putt well. To deal with this pressure, every Pro has developed his own personal putting routine, i.e., line up the putt, take two practice strokes, look at the cup, and then putt. They practice this routine ad nauseum so that it becomes second nature and requires no thought to invoke it. Then, when the real pressure is on, they do not succumb to any distraction, feeling of doubt or anxious second-guessing.

As a trader, we face similar situations that require quick and nearly automatic responses. Our emotional thoughts do affect our physiology, and therefore, our ability to perform on the spot. Even neutral thoughts can be a distraction unto themselves. The more we can develop a "trading routine", the more dispassionate we can be when we have to execute a Buy or Sell transaction. The more practiced your routine, the more confident you will feel. You will know with certainty what to expect, and performance will become effortless, nearly always exceeding your own high expectations.

So, develop your own personalized practice trading routine. Lay out the logical decision steps and repeat them until they flow effortlessly. Remember that pressure and anxiety can be motivators, but if they are distractions, they must be dealt with accordingly.