WHAT DOES “TRADE WHAT YOU SEE” MEAN?
🔵 As a forex trader, you've probably heard about how important it is to keep your emotions under control and follow reason and objective rather than acting on impulses fueled by greed, hope, or fear. But knowing not to trade emotionally is one thing; understanding HOW NOT to trade emotionally and putting that information into practice is quite another.
Because of the prehistoric "fight or flight" reflexes that have guided our existence as a species for thousands of years, the human brain is designed to operate against us in the market. The majority of traders, regrettably, are unable to perform to their full capacity on the market due to the same causes. The more rational and objective frontal lobe of the brain, which is the newest section of the human brain and allows us to plan, reason, and make sense of complicated ideas, must thus be used to design a strategy if you want to become a consistently profitable trader.
We may ensure that we act on reason and objectivity rather than emotion by learning to trade in what we see rather than what we think. The following information will help you to better understand why it is important to trade what you see rather than simply what you think as well as how to make sure you do so.
🔲 Stop trying to "outsmart" the market
Trying to guess what the market will do next, with no real basis or trading setup, is like gambling on a slot machine or a roulette wheel. Yet every day, novice traders, as well as unsuccessful experienced traders, make exactly this emotional trading mistake. Instead of looking at the price chart and checking it against their forex trading plan to see if any price action setups are present, many traders simply "manifest" some idea of what price "should" be doing.
When you are not trading on obvious and visible price events or according to a pre-designed trading strategy, you are simply acting on emotions and feelings rather than objective analysis of price movement. Many traders trade emotionally after a losing trade or after a winning trade because they succumb to the feelings of revenge that a losing trade causes, or the greed that a winning trade often causes. It is in these moments that traders stop trading based on what they see on the chart and start trading based on what they "think" or feel, and it is these moments that separate consistently profitable traders from unsuccessful amateurs.
🔲 Don't marry a trade
It is important to understand that just because you "think" that something will happen in the market, it does not mean that it will. Similarly, even if you find a very obvious and "perfect" at first glance setup, you must always remember that the Forex market is a dynamic and constantly changing arena where anything can happen at any moment, so do not bet on the farm just because you think you have spotted the "right thing", because that does not happen in Forex, or in any market in general.
Instead of allowing yourself to get emotionally attached to any trade or any idea of what the market might do, you need to learn to trade emotionally detached from your trades. Allow price action to light your way through the noise and confusion of the market, while remembering that you must constantly manage your risk even when trading setups look "perfect." Always make sure you are trading according to the concepts of your forex trading strategy and not just on a "whim", if you are trading on price action, then follow the tracks left by price, instead of going astray and succumbing to what you think the market "should" do or "might" do.
🔲 Learn to control yourself
One obvious but often overlooked fact about Forex trading is that the market simply does not care whether you win or lose money, it is unaware of your existence and has no emotional reactions to you. However, most traders react emotionally to their trades and to the market, thereby allowing an inanimate being to control their behavior instead of controlling it itself. You won't be able to consistently make money in the market until you learn to control your emotions and reactions to the market.
Once you learn to trade only what you see on the price chart and not what you think, you will be on your way to becoming a consistently profitable trader, because trading what you see and not only what you think means that you control yourself, not the market. The key is to consistently trade only what you see, not what you think or feel. This will help you avoid succumbing to the emotions of revenge or greed after a losing or winning trade. Traders who consistently trade only what they see on the price chart and not what they think "might happen," along with effective risk management, are the traders who make money in forex. When you learn how to trade with a high probability of price events while controlling your emotions and risk, you will find yourself in an even better position to make money in the forex market.
🔲 Ask questions before opening a trade
Advice on how to ensure that you only trade what you can see, not what you can think. To truly make sure you only trade what you see and not what you think is quite another from simply understanding why you should. Here are some practical suggestions you may use to make sure you only trade what you can see and avoid giving in to emotion.
Take the time to consider the following questions before entering into any trade: "Am I doing according to my plan?" "Where is my setup and does it meet the requirement?" "Is the market controlling me?" and "Am I acting logically or emotionally?" "Is it only my imagination, or do you have a bad attitude?". It's a good idea to ask yourself all of these questions before starting any trade. You'll be forced to think through your choices more carefully and decide whether your trade is reasonable or simply motivated by emotion.
If you are trading a particular trading strategy, such as price action, make sure that every trade you make is consistent with the concepts you learned in the trading course or study material. Ask yourself any or all of the above questions before every trade you make, until trading only what you see becomes second nature. Eventually, you will develop a sophisticated discretionary trading perspective that allows you to look at the price chart almost instantly and identify price setups. Trading only obvious price action trading setups that are already formed and are not just "possible" setups provides us with a kind of "control and balance" to make sure we are not trading on emotion.
Because of the prehistoric "fight or flight" reflexes that have guided our existence as a species for thousands of years, the human brain is designed to operate against us in the market. The majority of traders, regrettably, are unable to perform to their full capacity on the market due to the same causes. The more rational and objective frontal lobe of the brain, which is the newest section of the human brain and allows us to plan, reason, and make sense of complicated ideas, must thus be used to design a strategy if you want to become a consistently profitable trader.
We may ensure that we act on reason and objectivity rather than emotion by learning to trade in what we see rather than what we think. The following information will help you to better understand why it is important to trade what you see rather than simply what you think as well as how to make sure you do so.
🔲 Stop trying to "outsmart" the market
Trying to guess what the market will do next, with no real basis or trading setup, is like gambling on a slot machine or a roulette wheel. Yet every day, novice traders, as well as unsuccessful experienced traders, make exactly this emotional trading mistake. Instead of looking at the price chart and checking it against their forex trading plan to see if any price action setups are present, many traders simply "manifest" some idea of what price "should" be doing.
When you are not trading on obvious and visible price events or according to a pre-designed trading strategy, you are simply acting on emotions and feelings rather than objective analysis of price movement. Many traders trade emotionally after a losing trade or after a winning trade because they succumb to the feelings of revenge that a losing trade causes, or the greed that a winning trade often causes. It is in these moments that traders stop trading based on what they see on the chart and start trading based on what they "think" or feel, and it is these moments that separate consistently profitable traders from unsuccessful amateurs.
🔲 Don't marry a trade
It is important to understand that just because you "think" that something will happen in the market, it does not mean that it will. Similarly, even if you find a very obvious and "perfect" at first glance setup, you must always remember that the Forex market is a dynamic and constantly changing arena where anything can happen at any moment, so do not bet on the farm just because you think you have spotted the "right thing", because that does not happen in Forex, or in any market in general.
Instead of allowing yourself to get emotionally attached to any trade or any idea of what the market might do, you need to learn to trade emotionally detached from your trades. Allow price action to light your way through the noise and confusion of the market, while remembering that you must constantly manage your risk even when trading setups look "perfect." Always make sure you are trading according to the concepts of your forex trading strategy and not just on a "whim", if you are trading on price action, then follow the tracks left by price, instead of going astray and succumbing to what you think the market "should" do or "might" do.
🔲 Learn to control yourself
One obvious but often overlooked fact about Forex trading is that the market simply does not care whether you win or lose money, it is unaware of your existence and has no emotional reactions to you. However, most traders react emotionally to their trades and to the market, thereby allowing an inanimate being to control their behavior instead of controlling it itself. You won't be able to consistently make money in the market until you learn to control your emotions and reactions to the market.
Once you learn to trade only what you see on the price chart and not what you think, you will be on your way to becoming a consistently profitable trader, because trading what you see and not only what you think means that you control yourself, not the market. The key is to consistently trade only what you see, not what you think or feel. This will help you avoid succumbing to the emotions of revenge or greed after a losing or winning trade. Traders who consistently trade only what they see on the price chart and not what they think "might happen," along with effective risk management, are the traders who make money in forex. When you learn how to trade with a high probability of price events while controlling your emotions and risk, you will find yourself in an even better position to make money in the forex market.
🔲 Ask questions before opening a trade
Advice on how to ensure that you only trade what you can see, not what you can think. To truly make sure you only trade what you see and not what you think is quite another from simply understanding why you should. Here are some practical suggestions you may use to make sure you only trade what you can see and avoid giving in to emotion.
Take the time to consider the following questions before entering into any trade: "Am I doing according to my plan?" "Where is my setup and does it meet the requirement?" "Is the market controlling me?" and "Am I acting logically or emotionally?" "Is it only my imagination, or do you have a bad attitude?". It's a good idea to ask yourself all of these questions before starting any trade. You'll be forced to think through your choices more carefully and decide whether your trade is reasonable or simply motivated by emotion.
If you are trading a particular trading strategy, such as price action, make sure that every trade you make is consistent with the concepts you learned in the trading course or study material. Ask yourself any or all of the above questions before every trade you make, until trading only what you see becomes second nature. Eventually, you will develop a sophisticated discretionary trading perspective that allows you to look at the price chart almost instantly and identify price setups. Trading only obvious price action trading setups that are already formed and are not just "possible" setups provides us with a kind of "control and balance" to make sure we are not trading on emotion.
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