What do Michael Jordan, Martha Stewart, and Taylor Swift have in common?
If you answered “They all have Netflix documentaries,” then you’re right. You also probably have too much time on your hands.
Another thing they have in common is that they excel in their respective fields and look for ways to improve their craft.
They expose themselves to different environments to try out different things to see what works best for them.
In other words, they approach change positively.
Michael Jordan changed his game from relying on pure, explosive athleticism to having a sweet, fade-away jump shot to score points.
Martha Stewart turned domestic skills into a media empire by mastering everything from flower arranging to financial strategy, then rebranded herself after serving time.
Last but not least, Taytay has grown as a singer-songwriter, constantly making waves in the music industry throughout the years instead of simply resting on her laurels.
These elite performers owe much of their success to embracing change, and this is what we, as traders, should strive to do.
The problem that many traders face is not in introducing needed changes, but in failing to follow through. This is what separates the “greats” from the “not-so-greats.”
The greats follow through with their changes and never stop practicing, while the not-so-greats tend to get lazy and feel lax over time, eventually slipping back into old habits. As a result, the greats get better, and the not-so-greats do not grow.
But embracing change is not easy. And even if a trader were to step outside his comfort zone to try new methods and techniques, he may not have the perseverance to push through if things get rocky.
One mistake that forex traders make when first implementing changes to their trading style is concentrating immediately on the results of the change. More specifically, they focus on trading profits and losses (and what did we say about doing that, huh?).
A trader may initially see that the changes have generated profits. Naturally, the trader feels that the forex system is profitable and immediately starts trading live at his usual risk levels.
The problem with this is that the trader is not fully aware of all the effects that the implemented changes may have on their overall trading system and risk management plans.
This problem stems from the lack of experience, both in understanding the new parameters of the system and how to deal with the changes to the system.
Many forex traders try out new methods but lack the fortitude and discipline to practice and gain the necessary information to effectively gauge whether the results are meaningful or not.
They stop halfway, mostly because they feel that it isn’t worth the time, effort, and/or pain to see whether the changes can be profitable.
In the end, if a trader gets burned, both mentally and financially, by trying a new trading system or trading tool, it can be quite traumatizing. It may even cause the trader to refrain from exposing himself to change, thereby stunting his growth as a trader.
A great way to implement change is to create a controlled atmosphere where you can freely make mistakes. By doing this, you are able to speed up your learning curve WITHOUT running the risk of permanently damaging your finances.
Two ways to do this are by reviewing charts and trading a demo account.
Chart Reviews
While reviewing charts lacks the feel of real-time forex trading since you are looking at everything in hindsight, it helps you figure out what you could have done during the day. The next time a similar setup appears, you’ll know what to do.
It’s kinda like watching a replay of your basketball game. You can see all the wrong and right things you did and adjust accordingly.
Demo Trading
Demo trading is helpful as it allows you to participate in the market real time without putting your capital at risk.
You can take as many setups as you want, which enables you to accumulate weeks’ worth of trading experience in just a single day. You can rehearse a trading system repeatedly or focus your attention on trading-specific news reports.
By doing these two exercises, you place yourself in a controlled environment, giving yourself a training ground where you can continuously practice, train, and put your skills to the test without the pressure of losing your hard-earned cash.
Hopefully, this will help you follow through and fully embrace change, allowing you to grow as a trader.