The Psychology of Breakeven Forex Trades

The Psychology of Breakeven Forex Trades

We all want to make profits from the Forex Market. We measure these profits by quantifying our results in terms of profits vs. losses. However, this measurement cannot be sufficient to sustain our individual motivation. In fact, all traders have periods of getting losses as well as profits. And, at the beginning most of the traders face some losses and these losses turn into disappointments. As a result, the experience of disappointment may then unleash a host of destructive emotions. So, now the question is, “How can a trader overcome becoming obsessed with profits and being emotionally unprepared for the realities of losses?

The Solution

The solution is to step outside the disappointments, as well as the conventional profits and loss paradigm that dominates us. You need to realize the realm of profits and losses there is a neutral zone that allows the trader to pause.

But having trades that are break-even, which means ZERO (0) on the profit and loss register or reasonably near that range is actually a very good outcome. A break-even trade may be the outcome of a quick exit by the trader. A frequent number of these break-even trades in one’s account are usually the reason for setting in of destructive emotions such as anxiety, guilt, fear or greed. Everyone who belongs to trade know that, this is not an uncommon experience. The break-even trade also can become a huge opportunity to evolve into a mature trader by going beyond an obsession for profits.

Let go of your attachment to trades

Many of us approach each trade in an arrogant fashion as the chance to grab pips. This concept reflects a commonly held view that trading is a zero-sum battle between the trader and the market. It is the view of the battle process where the trader wins or loses. But some of the best trading methods produce a win ratio just above 50% or less. It is true that the majority of trades are roughly break-even. Almost every flat or small losing trade keeps us in the game. And traders get in trouble when they stubbornly hold on to a trade, refusing to believe their system or simply their timing is wrong.

However, there is a better and ultimately more effective approach out there, but you need to analyze well first. What if we humbly reconfigure our mindset and view the forex market as a magnificently complex place with full of opportunity? We would experience a shift in our entire mental and emotional focus. Then the market will not become our enemy but a field of opportunities that when understood, surely can produce profits. In fact, those who take this stance do not demand nor expect pips to be handed over as if they belong to them. Without getting disappointed, they aspire to obtain a great trade by recognizing winning price action patterns.

Remember one thing that, profit becomes what we earn by applying our knowledge. If we acquire knowledge at a satisfactory level, then the market becomes our partner, and it is a reciprocal relationship. However, the ability to trade each day by emptying ourselves first of ego satisfaction may not be easy, but it is the distinguishing characteristic of traders in the process of transforming and evolving themselves from frenetic beginnings to a level of competence.

We all want to make profits from the Forex Market. We measure these profits by quantifying our results in terms of profits vs. losses. However, this measurement cannot be sufficient to sustain our individual motivation. In fact, all traders have periods of getting losses as well as profits. And, at the beginning most of the traders face some losses and these losses turn into disappointments. As a result, the experience of disappointment may then unleash a host of destructive emotions. So, now ...
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