Forex education: Trust is the X-factor in trading
Is free money free?
Scientists did an experiment
They put up a sign that said ‘Free Money” near a busy sidewalk. It was exact what it said it was. On a table was a bill ranging in value from $1 to $50 with an attendant standing by. People approached the table and asked if the money was truly free. Yes, they were told, go ahead and take it. They were skeptical and questioned it but there was no catch. Eventually they took the free money and hustled away.
The thing is, only about one in every 20 people who walked by bothered to stop. The rest were so conditioned by lies, ripoffs and hidden catches that they didn’t even ask. The ones who took it probably felt lucky but in truth, they were the ones who were brave enough to ask, investigate and take action.
That kind of skepticism about taking money from the market can make traders miss 19 good trades for everyone they make. If the market tries to give us something for free we hesitate because we’re skeptical. When the market takes something from us we fight like hell, hang on too long or double-down on bad ideas.
There’s also mistrust of the system. Paranoia is a natural reaction when the market runs cold but it’s irrational. Trust that the market is a level playing field. The liquidity in the FX market is mind-boggling and it’s nonsense to think your broker is moving a pair 10 pips to hit your stop.
In the market, things are what they appear. If you’re here, you have 98% of the information that anyone in the market has. Sure, there is some forex order flow data we’d all like to have in real time but there is never an complete picture. Trade what you see, trade what you know and trust that 98% of the time you know enough to make the right decision. When the money is on the table take it.
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