Why does Trading Require You to Put More Emphasis On The Strategy Than The Outcome?
It’s a common concern among novice forex traders to ponder how they can maximize their profits.
Targets are established, such as a certain amount of pips, in an effort to boost the likelihood of success. Instead of concentrating on the result. I believe focusing initially on the obeyed approach is more beneficial.
Any trade in which you stick to your strategy, win or lose, counts as a solid trade. The fact that you didn’t stick to your methodology makes the trade unethical, irrespective of the outcome. One of the most common rookie trading mistakes is driven by those who are just starting out.
Daily trading outcomes may become a major focus and inexperienced traders may check in on them or become obsessed. The effectiveness of each trade serves as a yardstick for them.
If they came out ahead, the trade was fruitful; otherwise, it was terrible. They focus on output rather than input and do not follow a standard operating procedure.
They have it wrong; the secret to developing into a successful trader over time is a systematic approach to the market. Within a specified timeframe, trading outcomes might be entirely unpredictable.
However, while amateur traders may be preoccupied with instantaneous profits, seasoned pros always keep an eye on the big picture to ensure that their trades result in long-term gains.
Frequently, novice traders have a very binary view of the world and often use monetary gains and losses as yardsticks for their trading victory.
In retrospect, you may evaluate a trend trader’s performance based on how closely they stuck to their trading style and how focused they stuck to their platform’s parameters.
When a trend trader is witnessing a downshift, they can comprehend the prospects that the market conditions in the near term haven’t been relevant for enforcing their trading method.
Inevitably, you won’t have much sensation generating cash if the markets you’re trading in are heading in the opposite direction of the trend for an extended period.
A results-oriented novice trader may quickly conclude that the trend trader’s approach is futile.
Simply put, a trend trader follows a certain method to profit from prevailing future trends.
For their part, they construct and thoroughly stretch a trading system and trade utilizing disciplined risk management and a well-thought-out strategy. It’s sometimes out of their hands whether the trades end up lucrative once they are engaged.
The one thing a trend trader can’t control is price activity; entrance, position, stop loss, and trailing stop is surely in their hands. I know and say this because I have been in their shoes.
Traders who focus on procedure and who follow trends do so because they believe:
- Their core competency due to their methodology will lead them to heightened profits over a certain time.
- They hold their focus on the big picture and do not let their moods or pride get in the way of finishing the task.
- Short-term outcomes are unpredictable as their experience tells them their trading journey is still lacking.
- They are mindful that their trades’ outcomes are freed from their ability to execute trades in a standardized manner.
- As they have no way of knowing how the market will behave in the future, they are not attempting to do so.
- When they execute a profitable deal, they do not experience exhilaration; instead, they develop melancholy.
- They do not require making forecasts, expressing opinions, or providing evidence; instead, they obey and go with the flow.
As soon as you’ve identified a trend in the market, your goal as a trader is to stick to it. Don’t worry too much about your outcomes and more about how you got there. Keep your attention on the things that you have the power to influence.
Don’t let the outcomes affect you dramatically. Your smaller trade positions make it easier to stick to your trading plan and avoid being emotionally or mentally sidetracked.
If you don’t stick to your standards, you’ll inevitably fail. I suggest you set parameters for profitability by documenting your trading strategy.
If what you’re doing is rational and articulated with your trading psyche, ultimately, you’ll see that the payoffs roll in.