I can’t think of a better way to describe the “style” of trading I do.
I don’t mean IQ smart, but more “EQ” smart about your own personality, risk tolerance, and understanding that you don’t become a millionaire overnight. Be smart about trading. It takes work. Patience. Discipline, and lots of self reflection. Be smart about asking yourself “what is my edge over the other side of the trade?”.
Know what you don’t know, and ask yourself if you really need to know it. I have no background in economics, no masters in financial analysis nor technical analysis. So I cannot claim to be smarter that those who passed the rigorous tests and exams to be certified. But I know what is my edge over them. I know what I can do, and cannot do.
You don’t turn smart overnight. Experience makes you street smart, not books. Knowledge is important, but more importantly, know what you don’t know, acknowledge it, and don’t pretend to trade like you’re better than the person on the opposite side of the trade. Chances are, you’re not.
Play it smart, not hard.
I don’t have 6 screens and a TV in front of me with 27 charts open at the same time. I trade the hourly and 4 hourly charts on major pairs mostly, sometimes the crosses and exotics if the trade looks really good. I spend about 10-15minutes every 4 hours scanning the charts and most of the time, there’s nothing good to enter.
I don’t trade when there are no trades to make.
I don’t stare at my screen on the 1 minute chart, hoping for a setup to happen, and fumble my way through the trade when it pops out of the sudden. I take my time to “shop”, compare which position is cheaper to enter, which pair has a better profit:cost ratio.
I don’t stress over open positions and stare at the P/L going up and down. When in a position, I just let it go, and manage it along the way.
Being casual is not easy when trading the forex market, but to me, it’s a must.
Get casual, or get burnt.
I embrace the fact that trading is speculation and you should too. Speculation is admitting you don’t know the results of the future, and embracing this fact will make your life as a trader a lot easier. If you cling on to analysis, that trading is about predictions, being “right” more than being wrong, than you will become very emotional when things go right, and, more often, when things go wrong. Emotional trading has no place here. Only smart, casual trading.