Why Do You Want To Trade Forex?

The answer to the question above could be simple. "To make money, of course!", you will very likely say. Certainly, there is nothing wrong with that answer. However, one needs to be clearer about one's money goals and the motivation that drives these goals. Otherwise, your trading is very likely influenced by some negative beliefs and thinking habits when you come face to face with fluctuations in market prices. The level of success achieved in any pursuit of wealth will certainly be related to the individual's beliefs about money.

For many Forex traders, their beliefs about the Forex market lead them to display poor trading behaviour and take insane risk levels without realising that they are actually doing so. They believe that the Forex market is a get-rich-quick cash-dispensing "machine", and as a result, all their perceptions of trading strategies and risk management techniques will be distorted by their counter-productive beliefs about the market.

Some people believe that financial freedom is about being able to parade their ownership of many large cars and houses, even if it involves taking huge amounts of loans. As a result, they could be funding their trading accounts with borrowed funds, such that their trading psychology is distorted by fear and anxiety, leading to a snow-balling of their levels of debt, which in turn give rise to a host of negative emotions which are damaging to trading performance.

Furthermore, the attitudes of many towards money are excessively misrepresented by greed and laziness. Inevitably, these people take excessive risk when trading the market, because they are senselessly driven by a desire to generate quick profits. There have been too many aspiring traders falling prey to their own uncontrolled instincts of greed. In addition, traders who allow their laziness to overwhelm their trading behaviour will surely display bad trading performance.

We need to start this business with a clear mind with regard to our financial goals and motivations. Regardless of your financial situations, there are certainly some worthwhile goals in your life which need money. However, many of us are negatively conditioned by certain beliefs about money that lead us to mindlessly run after money without being aware of how our greed tends to distort our ability to act soundly.

As long as we are trading the markets, we cannot escape the fact that we are driven by a desire to make money. In fact, all the emotional mistakes we make when trading the markets stem from a sense of insecurity, i.e. feelings of uncertainty about how much our trading account balance will increase or decrease in value. If you think about it, this insecurity is rooted in a psychological attachment to money, which naturally becomes a sense of greed when it is not controlled. Greed in an excessive desire to acquire greater levels of wealth, and such a desire is often not backed by a rational explanation of the underlying purpose that drives it.

Certainly, our money making quest in trading the Forex market can be ridden by a healthy ambition to acquire wealth, as long as we are able to clearly see that material wealth is rightfully a means to an end, and not an end in itself. In a culture saturated with greed and senseless money-grubbing, it is critical to evaluate our beliefs about money and our psychological relationship with this entity.

To do a personal assessment of some of our attitudes which are very relevant to our success in Forex trading, we need to ask ourselves the following questions:

1. Do I consider Forex trading as a form of business?
2. Have I clearly and specifically defined my objectives in this business?
3. Do I have a systematic way of ensuring that the probability of achieving my objectives is reasonably high despite all kinds of changes in market dynamics?
4. Do I know the reasons for my choice of Forex trading as a business?
5. Do I have a regular routine to follow in order to guide my trading process on a daily basis?
6. Do I have tested and proven trading strategies that regulate all my trading decisions in all market conditions?
7. Do I really understand the importance of taking losses in the Forex market?
8. Do I have systematic ways of cutting losses short and letting profits run?
9. Do I have a plan for determining how big or small each trading position should be?
10. Do I truly understand the significance of how my beliefs about money and about the market will impact every aspect of my trading process?

If you can emphatically answer "Yes" to each of the questions above, then you are way ahead of most traders!