Humans are naturally self-serving. When we win, we are quick to think it was due to our talent, intelligence, or skill. When we fail, however, people naturally try to explain it away. “It wasn’t my fault. It was just bad luck.” Social psychologists call this phenomenon the “self-serving bias.” People have a strong need to explain and understand their actions. When they succeed, their explanations are based on internal
traits: “I was talented, creative, and brilliant. I’m a natural born trader.” When they fail, their explanations are based on external, situational circumstances: “Institutional traders ripped me off.” “That signal service is crappy.” That course I took was just not worth it.” In most areas of our lives, self-serving biases work well. They help us cope with a stressful, uncertain world. It doesn’t hurt to build ourselves up when we do well, and discount our limitations, in many areas of our lives, but trading is a challenging profession that requires objective evaluations. When pursuing a difficult endeavor like trading, you must be brutally honest with yourself, identify potential problems, and take decisive action to overcome your limitations. Masking your limitations with self-serving biases will lead to even more setbacks in the long run.

In order to take responsibility for your trading actions, it’s necessary to overcome the self-serving bias. But it is difficult to overcome this bias. It is hard to avoid thinking highly of ourselves when we do well, and it is even harder to admit that trading mistakes may be our fault.

Why is it difficult to change our ways of explaining events? Our feelings are often closely tied to how we explain what happens in our lives. How we look at events often determines how we feel about them. When we explain success as due to our talents, we feel happy, even proud. But when we explain a failure as due to our talents, we feel disappointed. Indeed, research on the hopelessness theory of depression has shown that depressed people tend to attribute their failures to global, internal, and stable causes, such as a lack of intelligence or lack of ability. Depressed people tend to take too much responsibility for their actions, but on the other hand, they tend to be more accurate when it comes to judging how much control they have over events. In other words, non-depressed people tend to sacrifice accuracy for feeling good.

It’s vital to feel neutral about events. It is necessary to identify what you can control and to take precautions. An effective thinking strategy is to avoid global, internal, and stable attributions for wins or losses. In other words, don’t tell yourself that your wins or losses are due to your talents. It doesn’t do you any good. You may potentially feel overconfident when you do well or disappointed when you don’t. Identify specific reasons why an event occurs. Although it may be difficult, it is also useful to try to think of ways that you could have taken control.

Sometimes there may be nothing you could have done, and in those instances, it is useful to chalk up the circumstance to fate. But many times you could have taken action. As long as you don’t attribute an event to a lack of talent or ability, you will be willing to look at setbacks objectively and be willing to take action. In the end, your success depends on taking responsibility for your actions and trying to take as much control as possible. Winners aren’t afraid to take an honest look at themselves. They take responsibility for their actions, appreciate a challenge, and take action. As long as you avoid blaming yourself for setbacks, you can look at trading events objectively, conquer them, and reap the benefits.

Steve DeWitt
Forex Confidential – www.forexconfidential.com

Motivating Thought

In Rocky Balboa, Rocky’s son is in a career slump and making excuses for not reaching his goals in life. Rocky advises, “The world ain’t all sunshine and rainbows. It is a very mean and nasty place. It will beat you to your knees and keep you there permanently if you let it. You, me, or nobody is going to hit as hard as life. But it ain’t about how hard you hit. It is about how hard you can get hit and keep moving forward, how much can you take and keep moving forward. That’s how winning is done.”

In a recent infomercial, people were asked if they believed in get-rich-quick schemes. Most of the people shown did not. But there were a few who falsely believed that trading the markets was a way to earn easy money, but as all traders eventually learn, it can be “very mean and nasty,” and as many know, a very difficult way to make easy money. And when you are in a severe drawdown, you may feel beaten “to your knees,”
and if you are not an eternal optimist, you may stay beaten.

Mastering the markets is not about getting beaten down by losses, but about how you recover from setbacks and make sure you keep moving forward.
Even if you are broke, working an extra job to restore your trading capital, and learning new trading strategies in a heroic effort to stage a comeback, you have to believe that you can make it. That’s the only way to win when trading the markets.

People don’t like to lose. If you are achievement-oriented and driven to experience success, you don’t want anyone telling you that you can’t achieve your goals. But when you look to most trading experts, they estimate the odds of success as extremely low. Perhaps no one knows for sure how many traders succeed in this profession, but many trading educators estimate that less than 5% of the novices who enter the profession survive the learning curve. It’s natural to be on the defensive, and to think, “I’m one of the few who are going make it.”

There are a few different ways that novices can tackle a challenging endeavor like trading. First, they can build up their ego in an arrogant defensive way by telling themselves that they are going to beat the odds.
Second, they can cave in to the pessimistic input out there and just give up. Third, they can find a balance between extreme overconfidence and an outlook of gloom and doom.

Pessimists are usually more realistic than optimists, but they usually give up easily. If trading were simply a matter of putting in time and effort and achieving success, huge profits would be almost guaranteed. But the markets are uncertain, and if you can’t handle the stress of uncertainty, you might crack under the pressure. It may seem obvious, but you must learn to take responsibility for events that you can control and accept what you cannot control.

But taking responsibility for your actions isn’t as easy as it looks.
Trading involves coping with uncertainty. There are potentially endless factors that may go against your trading plan. For example, your DSL line may go down at a critical moment, an analyst may predict that a stock that you are trading will miss earnings expectations, or a stock or commodity in a related sector may suddenly move against you. When one of these unexpected events ruins our plans, our first instinct is to find an
excuse: “It’s not my fault. Everything is just going against me.” It’s easy to find excuses and many times there is, indeed, little we can do. It is tempting to avoid responsibility to make yourself feel better. Research studies suggest that people who take too much responsibility for their actions tend to believe that setbacks were due to enduring characteristics, such as a lack of talent. People who take responsibility are more likely to account for anything that can go wrong, but since so much can potentially go wrong, they tend to feel overwhelmed trying to control the world. It’s a lot like Mr. Monk on television. He spends so much time trying to obsessively control every minor detail that he cannot function without the help of his nurse or assistant.

Most people take credit for their success, but explain their failures away by blaming others or attributing a setback to a force that was beyond their control. It’s an adaptive strategy, but it doesn’t work well for trading.
Again, you must identify what you can control and control it.

To what extent do you feel you are in control of your success?
Psychologists have studied a concept called locus of control. People with an external locus of control attribute the causes of events to external events, while people with an internal locus of control tend to believe that they were responsible for what happens to them. Traders with an external locus of control have some advantages. Research studies have shown that people who have an external locus of control tend to easily take risks, and tend to sell off losers, rather than hold them under the false hope that they will turn around.

Trading the markets with aplomb requires that you astutely decide when to accept responsibility and when to chalk up a setback to fate and just move on. But whatever you do, you can’t be the kind of trader who lives in a state of denial.

In the short term, it may feel good to ignore our limitations and build up our egos. In a tough field like trading, a little denial helps us cope with the uncertainty of the markets. But in the long run, traders who live in a state of denial will devote the bulk of their psychological energy to defending themselves against their mistakes. Rather than cultivating a pristine view of the markets, they will tend to hold a view distorted by their burning desire to avoid admitting their limitations and taking responsibility for their actions. As they waste time and energy finding an excuse for a setback, no time and energy is devoted to anticipating adverse events and thinking of preventative strategies to neutralize them. In the long run, it’s better to take responsibility and take precautions for what may go wrong. It may not be easy to face what you can control and brush off what you can’t, but it is the only way to trade with the proper mental edge.

Steve DeWitt
Forex Confidential – www.forexconfidential.com

Here is a great quote for you…

“When you make a mistake or get ridiculed or rejected, look at mistakes as learning experiences, and ridicule as ignorance… Look at rejection as part of one performance, not as a turn down of the performer.” Denis Waitley

And now the feature article…

5 Reasons Why Dreams Don’t Take Flight
by Dr. John C. Maxwell

Most of us never see our dreams come true. Instead of soaring through the clouds, our dreams languish like a broken-down airplane confined to its hangar. Through life, I have come to identify five common reasons why dreams don’t take flight.

#1 We Have Been Discouraged from Dreaming by Others

We have to pilot our own dreams; we cannot entrust them to anyone else.
People who aren’t following their own dreams resent us pursuing ours. Such people feel inadequate when we succeed, so they try to drag us down.

If we listen to external voices, then we allow our dreams to be hijacked.
At some point, other people will place limitations on us by doubting our abilities. When surrounded by the turbulence of criticism, we have to grasp the controls tightly to keep from being knocked off course.

#2 We Are Hindered by Past Disappointments and Hurts

In the movie Top Gun, Tom Cruise plays Maverick, a young, talented, and cocky aviator who dreams of being the premier pilot in the U.S. Navy. In the film’s opening scenes, Maverick showcases his flying ability but also displays a knack for pushing the envelope with regards to safety. Midway through the movie, Maverick’s characteristic aggression spells disaster.
His plane crashes, killing his best friend and co-pilot.

Although cleared of wrongdoing, the painful memory of the accident haunts Maverick. He quits taking risks and loses his edge. Struggling to regain his poise, he considers giving up on his dream. Although the incident nearly wrecks Maverick’s career, he eventually reaches within to find the strength to return to the sky.

Like Maverick, many of us live with the memory of failure embedded in our psyche. Perhaps a business we started went broke, or we were fired from a position of leadership. Disappointment is the gap that exists between expectation and reality, and all of us have encountered that gap. Failure is a necessary and natural part of life, but if we’re going to attain our dreams, then, like Maverick, we have to summon the courage to deal with past hurts.

#3 We Fall into the Habit of Settling for Average

Average is the norm for a reason. Being exceptional demands extra effort, sustained inspiration, and uncommon discipline. When we attempt to give flight to our dreams, we have to overcome the weight of opposition. Like gravity, life’s circumstances constantly pull on our dreams, tugging us down to mediocrity.
Most of us don’t pay the price to overcome the opposition to our dreams.
We may start out inspired, but through time we fatigue. Although never intending to abandon our dreams, we begin to make concessions here and there. Through time, our lives become mundane, and our dreams slip away.

#4 We Lack the Confidence Needed to Pursue Our Dreams

Dreams are fragile. They will be buffeted by assaults from all sides. As such, they must be supplied with the extra strength of self-confidence.

In Amelia Earhart’s day, women were not supposed to fly airplanes. If she had lacked self-assurance, she never would have even attempted to be a pilot. Instead, Earhart confidently chased after her dream, and she was rewarded with both fulfillment and fame.

#5 We Lack the Imagination to Dream

For thousands of years, mankind traveled along the ground: by foot, by horse-and-buggy, by locomotive, and eventually by automobile. Thanks to the dreams of Orville and Wilbur Wright, we now hop across oceans in a matter of hours. The imaginative brothers overcame ridicule and doubt to pioneer human flight, and the world has never been the same.

Many of us play small because we do not allow ourselves to dream. We trap ourselves in reality and never dare to go beyond what we can see with our eyes. Imagination lifts us beyond average by giving us a vision of life that surpasses what we are experiencing currently. Dreams infuse our spirit with energy and spur us on to greatness.

– John C. Maxwell

Steve DeWitt
Forex Confidential – www.forexconfidential.com

Motivating Thought

In The Psychology of Smart Investing, Ira Epstein and David Garfield recommend, “When you lose, don’t look at the loss as a reflection of your self-worth. Likewise, when you win, don’t let it go to your head.” It’s vital to remember that trading with the proper mental edge not only requires an upbeat attitude, but also the ability to rein in a big ego after significant triumphs. Research studies have shown that impulsive behavior is not restricted to a bad mood. People may act impulsively when they are either too disappointed or too euphoric. Don’t let your need to celebrate a victory get the better of you. Stay disciplined no matter what.

Does your personality get in the way of trading profitably?

Despite academic arguments about whether personality is consistent across time and across situations, and whether or not personality influences job performance, I’m sure that you can think of ways that your personality may get in the way of everyday life as well as during your trading day (or you can think of ways in which a friend or relative has a personality that interfered with his or her everyday life).

A person who is extremely shy, for example, will have trouble speaking in front of a large audience or asking an attractive person out on a date.
You don’t need a scientific study to convince you of this fact. But there are individual differences in terms of the extent to which personality may interfere with daily living. Some people may be shy and unassertive in some situations yet not in others, while other people may be so extremely shy and unassertive that they would rather spend their life in a cocoon. You might see that if you were a personnel manager for a department store, you may not want to put such people on the sales floor. And that’s what personnel consultants often suggest. The commonsense idea is to match people’s personality to an appropriate occupation. If a person has trouble interacting with people, then he or she may not be the best person to try to move merchandise. Although this is a logical argument, you may see a flaw. Some people may not prefer to interact with people, but if they put in the effort, they can learn how to make sales. In other words, people can overcome the limits of their personality if they try hard enough. In this example, high sales may also depend on the product a person is trying to sell. If the product is complex, such as electronic equipment, it may be more important to find people who have the self-control and discipline to learn about electronics. Extremely sociable people, who often lack discipline and self-control, may not be the ideal salespeople for a product requiring a complicated sales pitch.

The link between personality and job duties may not be straightforward, and when it comes to trading, it may not be necessary to have the characteristics of the ideal trader personality. A person can merely identify which elements of his or her personality get in the way of effective trading, and make a plan to work around these patterns.

Even though it is possible to work around your personality, it’s not a good idea to completely ignore it. Just as Dr. Van Tharp reminds us in his Market Wizards interview, we can all think of the ideal personality type that would be conducive to trading with the proper mental edge. The ideal trader personality style consists of a combination of experience, skill, knowledge, discipline, and intuition. The problem with ideals, however, is that they sometimes exist only in our imagination, with few actual candidates who fit the bill. That said, Dr. Tharp’s description of the trader who cannot easily handle stress, is overly emotional, defensive, and unable to take responsibility for his or her actions is the type of person who will have difficulty trading the markets. If you tend to behave in this way in your everyday life and have done so for years, you are probably “at-risk” for blowing out your account. Again, it doesn’t mean you are doomed, but it does suggest that as a trader you must take precautions to work around your personal limitations.

The ability to handle stress and control emotions are not the only traits a trader needs for success. Consider the traits of discipline and intuition. A profitable trader must make a detailed trading plan and trade the plan, and that means following rules. If you are the kind of person who struggles with following the rules, however, you may have difficulty sticking with a trading plan.

How do you handle risk? Many people have difficulty taking risks. They prefer to seek out security and certainty, and prefer facts to abstract theories and ideas. Yet there is an intuitive side to trading that is equally important. The market only follows the rules when it does; the rest of the time it goes another way. There are an endless number of inputs and it takes an intuitive mind to piece them together to come up with a reasonable plan of action.

Perhaps no person has the ideal trader personality. At best, all we can hope for is the right blend of core personality traits. And thus, it is useful to know where you stand in terms of your personality, so you can adapt and change, and bring your trader personality closer to the ideal.
It is useful to appreciate the characteristics that accentuate your trading while also recognizing the characteristics that don’t. Once you identify your personal limitations, you can either develop the personality traits you need to maximize your mental edge, or devise trading methods to work around your limitations.

It is necessary to identify the trading circumstances that may bring out the dark side of your trading personality. Novice traders may find that trading brings out the worst side of their personality all the time, where more experienced traders may discover that specific situations precede their tendency to act impulsively or with extreme emotions. Whatever you do, however, don’t let your personality get the better of you. Take an honest look at your trader personality, identify your potential problems, and develop a psychological strategy to ensure that you trade with the proper winning, mental edge.

Steve DeWitt
Forex Confidential – www.forexconfidential.com

Maintaining Honesty and Integrity
by Jim Rohn
(excerpted from Cultivating an Unshakable Character)

For a leader, honesty and integrity are absolutely essential to survival.
A lot of business people don’t realize how closely they’re being watched by their subordinates. Remember when you were a kid in grammar school, how you used to sit there staring at your teacher all day? By the end of the school year, you could do a perfect imitation of all your teacher’s mannerisms. You were aware of the slightest nuances in your teacher’s voice – all the little clues that distinguished levels of meaning that told you the difference between bluff and “now I mean business.”

And you were able to do that after eight or nine months of observation.
Suppose you had five or 10 years. Do you think there would have been anything about your teacher you didn’t know?

Now fast forward and use that analogy as a manager. Do you think there’s anything your people don’t know about you right this minute? If you haven’t been totally aboveboard and honest with them, do you really think you’ve gotten away with it? Not too likely. But if you’ve been led to believe that you’ve gotten away with it, there might be a good probability that people are afraid of you, and that’s a problem in its own right.

But there is another side of this coin. In any organization, people want to believe in their leaders. If you give them reason to trust you, they’re not going to go looking for reasons to think otherwise, and they’ll be just as perceptive about your positive qualities as they are about the negative ones.

A situation that happened some years ago at a company in the Midwest illustrates this perfectly. The wife of a new employee experienced complications in the delivery of a baby. There was a medical bill of more than $10,000, and the health insurance company didn’t want to cover it.
The employee hadn’t been on the payroll long enough, the pregnancy was a preexisting condition, etc, etc,..

In any case, the employee was desperate. He approached the company CEO and asked him to talk to the insurance people. The CEO agreed, and the next thing the employee knew, the bill was gone and the charges were rescinded.

Then he told some colleagues about the way the CEO had so readily used his influence with the insurance company, they just shook their heads and smiled. The CEO had paid the bill out of his own pocket, and everybody knew it, no matter how quietly it had been done.

Now an act of dishonesty can’t be hidden either, and it will instantly undermine the authority of a leader. But an act of integrity and kindness like the example above is just as obvious to all concerned. When you’re in a leadership position, you have the choice of how you will be seen, but you will be seen one way or the other, make no mistake about it.

One of the most challenging areas of leadership is your family. Leadership of a family demands even higher standards of honesty and integrity, and the stakes are higher too. You can replace disgruntled employees and start over. You can even get a new job for yourself, if it comes to that. But your family can’t be shuffled like a deck of cards. If you haven’t noticed, kids are great moral philosophers, especially as they get into adolescence. They’re determined to discover and expose any kind of hypocrisy, phoniness, or lack of integrity on the part of authority figures, and if we’re parents, that means us. It’s frightening how unforgiving kids can be about this, but it really isn’t a conscious decision on their part; it’s just a necessary phase of growing up.

They’re testing everything, especially their parents.

As a person of integrity yourself, you’ll find it easy to teach integrity to your kids, and they in turn will find it easy to accept you as a teacher. This is a great opportunity and also a supreme responsibility, because kids simply must be taught to tell the truth: to mean what they say and to say what they mean.

Praise is one of the world’s most effective teaching and leadership tools.
Criticism and blame, even if deserved, are counterproductive unless all other approaches have failed.

Now for the other side of the equation, we all know people who have gotten ahead as a result of dishonest or unethical behavior. When you’re a kid, you might naively think that never happens, but when you get older, you realize that it does. Then you think you’ve really wised up. But that’s not the real end of it. When you get older, you see the long-term consequences of dishonest gain, and you realize that in the end it doesn’t pay.

“Hope of dishonest gain is the beginning of loss.” I don’t think that old saying refers to loss of money. I think it actually means loss of self-respect. You can have all the material things in the world, but if you’ve lost respect for yourself, what do you really have? The only way to ever attain success and enjoy it is to achieve it honestly with pride in what you’ve done.

This isn’t just a sermon, it’s very practical advice. Not only can you take it to heart – you can take it to the bank.

To Your Success,
Jim Rohn

Steve DeWitt
Forex Confidential – www.forexconfidential.com

In my years teaching people to be successful, I have seen that basically people break their lives down into two major parts: Wealth-building and the rest of their lives. Having done a lot of reflection on these two topics – wealth and life – I am coming to some new conclusions about how to perceive the two.

Until recently I thought that there was a significant difference in how we should tackle the two areas. In fact, I thought that the two topics should be addressed in almost opposite fashion.

You see, wealth-building is just math. While life — Life is art.

Think back with me to high school. Most of us were required to take math and most of us probably took art as well.

Now, think about your final exams in the two areas. Your math paper was graded on hard facts:

Ten times ten is always one-hundred
Thirty divided by three is always ten
Seven plus seven is always fourteen
Fifty minus twenty-five is always twenty-five

There is always just one answer in math. The answers are hard fact, set in stone. Math is a science. It is formulaic. You can know the outcome before it happens, every time.

But what about your final art project? Art is much more subjective.
“Beauty,” they say, “is in the eye of the beholder.” There is no one right answer.

Think of the different styles of the famous artists: Renoir. Monet.
Picasso. Rockwell. Warhol.

Different people find different styles beautiful, and that is what makes art, art. So how does this fit with wealth-building and life? Wealth-building is like math: If you add $1000 to your retirement account each month and gain seven percent interest over twenty years, you can know now how much you will have then. It is math. If you buy a rental property for $200,000 now and it increases in value by three percent a year, you know exactly how much you will be able to sell it for in ten years. The beauty of math is in the knowing. You can work the system, set it on auto-pilot and the math does the work for you, and you know the outcome.

But life? Life is art. And that is the beauty of life. You do not know how it is going to turn out. Life, like art, is always changing. Different people provide different colors. When you make a mistake, you can go back, erase it or even paint right over it. You can change the scenery. Life, like art, is ever evolving, and what looks good to one person is of no interest to another. And that is what makes life beautiful.
Another lesson I think we can draw is that in life we should do our math, of course, but life isn’t made up of just wealth-building. Wealth-building should serve our ability to live our lives. Jesus, the master teacher, said that our lives are not made up of the abundance of our possessions. He didn’t mean that possessions aren’t good, just that wealth isn’t what life is all about.

So let me ask you: Are you spending more time on your math or your art? Do your math. Everybody should do their very best at their wealth-building plan so they can take care of themselves and their families.

But life is about the art. What does your canvas look like? What kind of picture are you painting? What kind of pot are you creating? What kind of statue are you sculpting? Take your time, make bold strokes, use brilliant colors, and make of your life the most beautiful masterpiece that you can.

In other words, do your math so you can focus on your art.

To Your Success,

Steve DeWitt
Forex Confidential – www.forexconfidential.com

Many times, we look at high achievers and assume they had a string of lucky breaks or made it without much effort. Usually, the opposite is true, and the so-called superstar had an incredibly rough time before he or she attained any lasting success.

It may motivate you more toward your own goals to know that some of the most famous and well-known people in modern times had to overcome as difficult obstacles as anyone before they finally reached the top. It takes persistence and total commitment to your goals, but it's possible!

You may not know the background of a certain laundry worker who earned sixty dollars a week at his job but had the burning desire to be a writer. His wife worked nights, and he spent nights and weekends typing manuscripts to send to publishers and agents. Each one was rejected with a form letter that gave him no assurance that his manuscripts had even been read. I've received a few of those special valentines myself through the years, and I can tell you first hand that they're not the greatest self-esteem builders.

But finally, a warm, more personal rejection letter came in the mail to the laundry worker, stating that although his work was not good enough at this point to warrant publishing, he had promise as a writer and he should keep trying.

He forwarded two more manuscripts to the same friendly-yet-rejecting publisher over the next eighteen months, and as before, he struck out with both of them too. Finances got so tight for the young couple that they had to disconnect their telephone to pay for medicine for their baby.

Feeling totally discouraged, he threw his latest manuscript into the garbage. His wife, totally committed to his life goals and believing in his talent, took the manuscript out of the trash and sent it back to Doubleday, the publisher who had sent the friendly rejections. The book, titled Carrie, sold over five million copies, and as a movie, became one of the top-grossing films in 1976. The laundry worker, of course, was Stephen King.

The main message – believe in your ability to turn obstacles into opportunities. Too often people try to storm their obstacles as if they're forts that need to be taken. It's better to step back and ask yourself: "Did I cause this obstacle by my own actions or lack of them? Did someone else cause this obstacle? Is this obstacle one that grew out of the natural progression of circumstances?"

This last question may seem complex, but it holds a secret to the way you can set and reach your goals and achieve your destiny!

Steve DeWitt
Forex Confidential – www.forexconfidential.com

Some ideas of the questions to ask in this regard might be: was the trade analyzed in accordance with the system? If not, why not? How did the trader feel about the trade before entering? After? What did the trader do during the trade that was not consistent with the system? If so, why? What would the trader do differently with a similar trade? How would the trader rate confidence in the trade? At what point did that confidence weaken?

Analyzing these questions will help the trader focus on areas that need to be examined and to develop a strategy to deal with these weaknesses. Once identified, they can be overcome. But without the awareness that there is a problem, emotions will run the show.

Depending on a trader’s level of financial and educational commitment to becoming a successful trader, a mentor program is highly recommended. Although this can be a bit expensive, having an experienced and insightful mentor to help teach, guide and debrief trading activity can be very effective in “After each trade is completed, successful traders review and grade the trading process.”

Trading can be an isolated and lonely undertaking and having communications with other more experienced traders is probably a wise investment. Consider it the cost of doing business. There is, however, a segment of the trading education industry that provides a middle ground for developing the important aspects of the trading psyche. These vendors are usually experienced traders and psychologists working together to help develop and maintain the proper “attitude” for traders to succeed at a cost effective price.

In conclusion, having trouble pulling the trigger on either the buy or sell side of a trade can just be symptomatic of the lack of confidence in the system and oneself. Learning to handle the stresses of revealing ourselves against a cold, measurable standard is not easy for most intelligent and competitive persons. But to become a successful trader there needs to be particular attention paid to the “head” part of the game. Talk to any successful trader and they will readily admit that at least 50% of trading is mental emotional.

So the question is: what are you doing to develop this important factor in your trading skill set? If your gut response is: “I don’t need it,” then you probably really need it.

Steve DeWitt
Forex Confidential – www.forexconfidential.com

You Deserve to Be Happy
By Brian Tracy

Achieving your own happiness is the best measure of how well you are living your life and enjoying your relationships. You can learn how to be happier and more fulfilled in everything you do.

Everyone is Different

Happiness in life is like a smorgasbord. If 100 people went to a smorgasbord and each put food on their plate in the quantity and mix that each felt would be most pleasing to him, every plate would be different.
Even a husband and wife would go up to the smorgasbord and come back with plates that looked completely different. Happiness is the same way. Each person requires a particular combination of those ingredients to feel the very best about himself or herself.

Listen to Your Heart

And your mix is changing continually. If you went to the same smorgasbord every day for a year, you probably would come back with a different plateful of food each time. Each day-sometimes each hour – only you can tell what it takes to make you happy. Therefore, the only way to judge whether a job, a relationship, an investment, or any decision, is right for you is to get in touch with your feelings and listen to your heart.

Be True to Yourself

You´re true to yourself only when you follow your inner light, when you listen to what Ralph Waldo Emerson called the “still, small voice within.”
You´re being the very best person you can be only when you have the courage and the fortitude to allow your definition of happiness, whatever it may be, to be the guiding light of every part of your life.

There Are No Limits

A very important point on the subject of happiness is whether or not you feel that you “deserve” to be happy. Accept the notion that you deserve all the happiness you can honestly attain through the application of your talents and abilities. The more you like and respect yourself, the more deserving you will feel of the good things in life. And the more deserving you feel, the more likely you will attain and hold on to the happiness you are working toward.

Make Happiness Your Key Measure

You should make happiness the organizing principle of your life. Compare every possible action and decision you make against your standard of happiness to see whether that action would make you happier or unhappier.

Soon, you will discover that almost all of the problems in your life come from choices that you have made – or are currently making – that do not contribute to your happiness.

Pay the Price

Of course, there are countless times when you will have to do little things that don´t make you happy along the way toward those larger things that make you very happy indeed. We call this paying the price of success in advance. You must pay your dues.

Sometimes these interim steps don’t make you happy directly, but the happiness you achieve from attaining your goal will be so great that it totally overwhelms the temporary inconveniences and dissatisfactions you have to endure in order to get there.

Action Exercises

Here are three steps you can take immediately to put these ideas into action.

First, accept that you deserve all the joy and happiness you can possibly achieve through your own efforts.

Second, make your own happiness the chief organizing principle of your life and judge everything against that standard.

Third, be willing to work hard and pay the price for the satisfaction and rewards you desire. Always go the extra mile and your success will be assured.

Steve DeWitt
Forex Confidential – www.forexconfidential.com

In the trading environment, when you lose a trade, what is the first idea that pops up in your mind? It would probably be, “There must be something wrong with my system,” or “I knew it, I shouldn’t have taken this trade”
(even when your system signaled it). But sometimes we need to dig a little deeper in order to see the nature of our mistake, and then work on it accordingly.

When it comes to trading the Forex market as well as other markets, only 5% of traders achieve the ultimate goal: to be consistent in profits. What is interesting though is that there is just a tiny difference between this 5% of traders and the rest of them. The top 5% grow from mistakes. Mistakes are a learning experience; they learn an invaluable lesson on every single mistake made. Deep in their minds, a mistake is one more chance to try it harder and do it better the next time, because they know they might not get a chance the next time. And at the end, this tiny difference becomes THE BIG DIFFERENCE.

Mistakes in the Trading Environment

Most of us relate a trading mistake to the outcome (in terms of money) of any given trade. The truth is: a mistake has nothing to do with it; mistakes are made when certain guidelines are not followed, and when the rules you trade by are violated. Take for instance the following scenarios:

First Scenario

The system signals a trade.

Signal taken and trade turns out to be a profitable trade.

Outcome of the trade: Positive – made money.

Experience gained: It’s good to follow the system; if I do this consistently the odds will turn in my favor. Confidence is gained in both the trader and the system.

Mistake made: None.

***********************

Signal taken and trade turns out to be a losing trade.

Outcome of the trade: Negative – lost money.

Experience gained: It is impossible to win every single trade, a losing trade is just part of the business; our raw material, we know we can’t get them all right. Even with this lost trade, the trader is proud about himself for following the system. Confidence in the trader is gained.

Mistake made: None.

**********************

Signal not taken and trade turns out to be a profitable trade.

Outcome of the trade: Neutral.

Experience gained: Frustration – the trader always seems to get in trades that turned out to be losing trades and let the profitable trades go away. Confidence is lost in the trader self.

Mistake made: Not taking a trade when the system signaled it.

***********************

Signal not taken and trade turns out to be a losing trade.

Outcome of the trade: Neutral.

Experience gained: The trader will start to think, “Hey, I’m better than my system.” Even if the trader doesn’t think on it consciously, the trader will rationalize on every signal given by the system because deep in his or her mind, his or her “feeling” is more intelligent than the system itself. From this point on, the trader will try to outguess the system.

This mistake has catastrophic effects on our confidence to the system. The confidence on the trader turns into overconfidence.

Mistake made: Not taking a trade when system signaled it

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Second Scenario

System does not signal a trade.

No trade is taken

Outcome of the trade: Neutral

Experience gained: Good discipline – we only need to take trades when the odds are in our favor, just when the system signals it. Confidence gained in both the trader self and the system.

Mistake made: None

***************************

A trade is taken, turns out to be a profitable trade.

Outcome of the trade: Positive – made money.

Experience gained: This mistake has the most catastrophic effects in the trader self, the system, and most importantly in the trader’s trading career. You will start to think you need no system, you know better from them all. From this point on, you will start to trade based on what you think. Confidence in the system is totally lost. Confidence in the trader self turns into overconfidence.

Mistake made: Take a trade when there was no signal from the system.

*************************

A trade is taken, turned out to be a losing trade.

Outcome of the trade: Negative – lost money.

Experience gained: The trader will rethink his strategy. The next time, the trader will think twice before getting in a trade when the system does not signal it. The trader will go, “Ok, it is better to get in the market when my system signals it; only those trades have a higher probability of success.” Confidence is gained in the system.

Mistake made: Take a trade when there was no signal from the system.

*************************

As you can see, there is absolutely no correlation between the outcome of the trade and a mistake. The most catastrophic mistake even has a positive trade outcome (made money), but this could be the beginning of the end of the trader’s career. As we have already stated, mistakes must only be related to the violation of rules a trader trades by.

All these mistakes were directly related to the signals given by a system, but the same is applied when getting out of a trade. There are also mistakes related to following a trading plan. For example, risking more money on a given trade than the amount the trader should have risked and many more.

Most mistakes can be avoided by first having a trading plan. A trading plan includes the system: the criteria we use to get in and out the market, and the money management plan: how much we will risk on any given trade, and many other points. Secondly, and most important, we need to have the discipline to follow strictly our plan. We created our plan when no trade was placed on, thus no psychology barriers were up front. So, the only thing we are certain about is that if we follow our plan, the decision taken is on our best interests, and in the long run, these decisions will help us have better results. We don’t have to worry about isolated events, or trades that could have given us better results at first, but then they could have catastrophic results in our trading career.

How to Deal with Mistakes

There are many possible ways to properly manage mistakes. We will suggest the one that works better for us.

Step One: Belief change.
Every mistake is a learning experience. They all have something valuable to offer. Try to counteract the natural tendency of feeling frustrated and approach mistakes in a positive manner. Instead of yelling to everyone around and feeling disappointed, say to yourself, “Ok, I did something wrong, what happened? What is it?”

Step Two: Identify the mistake made.
Define the mistake, find out what caused the mistake, and try as hard as you can to effectively see the nature of that mistake. Finding the mistake nature will prevent you from making the same mistake again. More than often you will find the answer where you less expected. Take for instance a trader that doesn’t follow the system. The reason behind this could be that the trader is afraid of losing. But then, why is he or she afraid?

It could be that the trader is using a system that does not fit him or her, and finds difficult to follow every signal. In this case, as you can see, the nature of the mistake is not in the surface. You need to try as hard as you can to find the real reason of the given mistake.

Step Three: Measure the consequences of the mistake.
List the consequences of making that particular mistake, both good and bad. Good consequences are those that make us better traders after dealing with the mistake. Think on all possible reasons you can learn from what happened. For the same example above, what are the consequences of making that mistake? Well, if you don’t follow the system, you will gradually lose confidence in it, and this at the end will put you into trades you don’t really want to be, and out of trades you should be in.

Step Four: Take action.
Taking proper action is the last and most important step. In order to learn, you need to change your behavior. Make sure that whatever you do, you become “this-mistake-proof.” By taking action we turn every single mistake into a small part of success in our trading career. Continuing with the same example, redefining the system would be the trader’s final step. The trader would put a system that perfectly fits him or her, so the trader doesn’t find any trouble following it in future signals.

Understanding the fact that the outcome of any trade has nothing to do with a mistake will open your mind to other possibilities, where you will be able to understand the nature of every mistake made. This at the same time will open the doors for your trading career as you work and take proper action on every mistake made.

The process of success is slow, and plenty of times it is attributed to repeated mistakes made and the constant struggle to get past these mistakes, working on them accordingly. How we deal with them will shape our future as a trader, and most importantly as a person.

Now, it is time for us to take action!!!

Finest Regards,

Steve DeWitt – Forex Confidential – www.forexconfidential.com