The 5 Types of Courage For Forex Success

Words like hard work, commitment and suffering are not strong enough to describe the amount of sacrifices needed to become a successful trader. The career itself is almost unachievable. Therefore, we need more than effort and determination… We need courage!

According to the dictionary courage means << the state or quality of mind or spirit that enables one to face danger, fear, or vicissitudes with self-possession, confidence, and resolution >>. In other words, courage is resistance to fear, mastery of fear…

Good Trading Books will urge us to specialize in one or two aspects of the market (entries, exits, trades management, market reversals…etc). The goal behind this advice is to get us sharpen our skills in these specific trading areas (where we are comfortable), and improve them so they become our trading edge.

But developing and building courage can also be a specialization, even a trading tool we could use like any other technical indicators the market is full of.

Truly speaking, building a tremendous internal courage is an effort-worthy specialization, but an endless one. Because courage is never reached, it is constantly challenged, therefore, always to rebuild. Only this kind of mindset will allow us to make money in the forex market.

Here are the 5 types of courage that will generate an enormous success for any trader.

1. The Courage To Wait For The Setup

A successful trader is a strategy trader, one who enters and exits trades only and exclusively based on his criteria. Let’s say, your entry technique suggests you to enter when 3 criteria are completed. Like you buy when:

– price is at a support level

– support is confirmed by a 4hr reversal candle pattern

– on the lower time frame, the candlestick closes above the Fibonacci retracement channel

Discipline of success requires that if 1 of these conditions is not in place, there is no trade! If the candlestick needs to close above a certain level, you have to wait for the close of the candlestick, not just a break of this area by the candle. Otherwise you are gambling and taking chances.

And gambling, forcing trades is what we’ve been doing all the time. Behavior modification is first and foremost if we want real changes in our trading results. Graham bell said: “Insanity is repeating the same behavior and expecting different results”.

But it takes a tremendous courage to achieve such discipline. The courage to wait for the setup is the same like a lion awaiting calmly and patiently its prey come to him, resisting the temptation of precipitation. Without self-transcendence, there is no significant results…

2. The Courage To Enter The Trade

According to Alexander Elder, “Fear of placing a trade is the biggest problem a serious trader can have. There is no way to handle this problem with ease and comfort. IT has to be handled hard, by a sheer of effort”.

As soon as our entry criteria are met, and we want to pull the trigger, there is always an inner voice telling us not to do so. This problem is created by the fear of losing, and it is more difficult to take a trade (meeting our ideal criteria) when we are facing series of losing trades. Taking a loss is emotionally hard. And a new loss will be harder to handle.

The problem is so serious that some traders spend years on demo accounts…Here is Alexander Elder’s insight about this: “Traders try to weasel out of making trading decisions. They paper trade for years, buy automatic trading systems, and so on…Several traders have even asked me to hypnotize them. These games must end. It is time to make an effort of will !” Taking a trade is a matter of great courage.

3. The Courage To Keep The Winning Trade

Taking a loss can be emotionally hard. But taking a profit can be even harder…the magic secret in trading is to cut losses short and let profit run. Basically a trader whose system performs a 50% win on all his trades with a winning ratio of 1:2R (he makes twice his investment each time he wins) will end up with some serious profits at the end of the year.

Because, one win clears 2 losses. But achieving this requires having the courage to keep winning trades running for a fairly long time. Letting winning trades run can be very difficult, especially for a day trader, even a swing trader, because of several supports and resistances levels causing severe retracements, wiping out our hard earned profits.

It takes an exceptional courage to keep a winning position open, especially during the week-end…

4. The Courage To Exit The Losing Trade

The biggest mistake a trader could ever make is not to accept a loss and move his stop loss hoping for a hypothetical market reversal. No one is perfect! And this is particularly true for the trading community where emotions are the master of our decisions.

According to studies trading-related, 20% of our trading decisions are emotion-based. It means that 1 out of 5 trading decisions are based on our gut feelings. But even with a trade taken emotionally, we will still hope for that trade to work, instead of closing it when the market turns against us.

We need a tremendous courage to take a loss. Accepting this pain requires an extraordinary humility and self-transcendence.

5. The Courage To Re-enter A Trade Immediately After A Loss

Did I make a good analysis? Are all my entries conditions met? Am I respecting my own trading strategy?

If the answer to these questions is yes, then you have to re-enter the trade, at the condition that your daily maximum loss is not reached yet.

We need an enormous courage for that. Because, most of the time we will start doubting the strategy…