Looking back to when I first started trading… well, it was an experience and a half to say the least.
One day I thought I was the best trader to have ever existed, and the next I never wanted to look at the stupid chart again.
It was an emotional rollercoaster and it is needless to say that the money was going out much faster than coming in.
My Forex game was comical. An absolute disaster. But don’t get me wrong, I didn’t think so then, I only do now.
Every time I lost a good trade, I went and got a new ‘’’’’’better’’’’’’ strategy.
On a couple of occasions, I even paid for them.
Yup, I did.
And then I got overly optimistic, naive, wasted more money and went back to square one.
Or in other words, I had fallen victim to the Cycle of Doom.
The Cycle of Doom can be described as a stage in one’s trading career where forex traders start being profitable using their own strategy, followed by big losses leading them to abandon their strategies and consequently searching for a better trading system.
To put it simply, let’s say it’s you going though the Cycle of Doom.
You got yourself a strategy.
It doesn’t matter whether you created it yourself, copied it, found it online or bought it from a farmer in India.
You pull the trigger and off the bat, you win a trade. And then you win another one. And the one after that!
You’re making some real $$$ … Things are going G.R.E.A.T !!!
What happens next?
The wins are replaced by losses. A lot of them. And the problem?
YOUR STRATEGY FOR SURE….. right???
You start panicking and decide it’s time to tweak and optimise it.
You add some minor changes here and there and off you go again, with a ‘better, more reliable strategy’.
You win a couple of trades before you’re hit by the losses… Time to adjust the strategy again? Yup!
Same things happens and eventually, after tweaking it hundreds of times, it’s time to get a brand new strategy to replace the old one.
And then you go round and round the circle, or as we call it in Forex, the Cycle of Doom.
Changing strategies in the hope that you’ll find the Holy Grail.
Well, guess what, it doesn’t exist!
Let’s state the obvious.
You are in the Forex market to make money.
And there’s absolutely no chance you will become a consistently profitable trader if you go changing strategies every time a trade goes against you.
If anything, this is a great way to burn through your capital.
In order to make money, you need to have a good strategy and stick with it!
It is super mega important you’re confident in your strategy, even if it goes against you sometimes.
And if you’re not confident in your strategy? Backtest it!
Seriously, fully backtest it. Put it through all the historical data and properly determine what works and what doesn’t.
Remember, there is no such thing as a perfect trading strategy… even if online ‘gurus’ trading from the beach tell you so.
You will stumble upon some losses along the way but before you go changing it up, ensure you always ask yourself WWALD.
WHAT WOULD ANDREW LOCKWOOD DO?
And if you want to ask me personally, join the Trading Room today!
I am always there to help you, as well as our fantastic mentors and fellow traders.
I hope to see you there.