One of our enemies on Forex

Hello, ladies and gentlemen. I would like to continue the theme that was raised in the article “How Not To Become a Dull Trader Loser?” Namely, the desire to be perfect, i.e. perfectionism.

You have probably thought about those moments sometimes when you closed the position too early, only to see a further rise of prices, which may have been outside your target level of profit. Or when you close your position at a loss, only to return and continue to go according to your strategy; or maybe it was a case where you have not entered the market because of not quite a correct setup or market price has not reached the required level for entrance, you have missed the opportunity to become the winner.

Similarly, there may have been times when you turned up luck in such situations. The nature of markets and human nature creates an environment of imperfection. Perfectionism is a wonderful quality deep down, but however, being expressed in an extreme degree, it can often be devastating and it will very likely be a hindrance to you as a Forex trader.

Do you have a penchant for perfectionism?

Thus, the biggest question is whether you have a penchant for perfectionism?
“Perfectionists are people whose standards are very high and are beyond the reach, they are people who go tensely, involuntarily and consistently for unattainable goals and understand their own advantages solely from the point of view of efficiency and performance of the tasks».

Does this sound like you?

Perfectionists suffer from setting excessively high standards, fear of failure, procrastination, they never content with their successes and can become emotionally disturbed if their standards are not adhered to, that often can take place in trading; they fear competition, they are unteachable, meticulous in the way of their thinking, being overly self-critical and intolerant of mistakes and they can be prone to high level of anxiety in the face of possible failure.

Fear of loss, hesitation, fear of pressing the trigger, the confluence of extreme frustration or anger when your trading strategy is undergoing failure or when you miss the point of entering a position, or if you are extremely self-critical in your trading activities in the Forex market, can be the evidence that you have a propensity to perfectionism.

One of the ways to check you on the tendency to perfectionism is the presence in your vocabulary or mindset such words as “must” and “should”.

7 ways to overcome the tendency to perfectionism

So, if you have some perfectionist tendencies, what can you do?

1. One of the most useful things and important guidelines that you should remember is that people tend to make mistakes (that he is imperfect), and consequently, you, as a Forex trader, also prone to make mistakes (you are imperfect also). Following this principle, as one of your trading beliefs, as part of your mental map, can be very useful in the sense that it will keep your reactions to events more realistic and less emotional.

2. Since you are working in an imperfect and uncertain environment, it is crucial for you to learn to think in probabilities. It is interesting, that researches conducted in the field of behavioral finance, invariably show that people do not know how to so effectively draw conclusions or to think in probabilities, that it is a skill that many people need to develop in themselves. Mark Douglas (author of “Zonal trading”) writes: “every transaction has a probabilistic result which does not exclude the possibility of loss”. The shift in thinking from the concept of perfection to the concept of probability will contribute to the formation of trading behavior that can improve the quality of transactions and be respond to events.

3. Try to do your best to strive for excellence, rather than obsessing about how to be the best; set a goal to become a good trader (but not the best in the world) and focus on it. Focus on learning and improvement, including understanding that you accept mistakes and learn from them.

4. Focus on your trading process and not only on the result. Focusing on your trading process, you surround yourself some of the anxieties and frustrations that occur when you are too attached to their results. Try to focus on how well you trade, and not only on how much money you earned or lost.

5. Learn to take the challenge in trading and seek enjoyment in what you do. The process of getting fun along with learning is the basis of efficiency. By taking this, you will also allow yourself to take a look at the highs and lows in trading from a different angle, and this rethinking will give you the opportunity to get another perception of these events, with less frustration and emotional turmoil.

6. It is important to note that the ability to see the defeat and fall in Forex, as opportunities for learning is not self-condemnation. One of the drawbacks of a perfectionist can be a negative reaction to mistakes, confusion and inability to draw lessons from them. Mistakes provide us with opportunities for learning and efficiency, but only when we actually perceive them as they are.

7. And finally, it is important to learn to accept that your personal fortune is not your own capital, that you are a worthy person regardless of your trading results at any time. At a fundamental and deep level, this is a key belief for optimal human functioning, happiness, and successful trading.

Conclusion

You will not win every trade. And this is absolutely normal. Remember that people make mistakes in an uncertain environment – the world of perfection is unreachable; we live in a probabilistic world.

Take care,

Michael