When starting to trade forex, setting clear trading expectations is key to planning and preparation. With endless possibilities for profit, novice forex traders can efficiently build an enjoyable trading career. Because of this, it is important to set healthy expectations and create the right systems to achieve your goals. With a calculated strategy and the right mindset, new traders can set the right target profits for success.
Healthy trading expectations can lead traders towards the path to success. According to Kevin Eikenberry, setting the right expectations can create great output, satisfaction and engagement. In the long run, understanding your expectations can inspire commitment, especially during challenging trades.
Why are expectations important in forex trading?
For long term success, it is important to set expectations to better manage all trading activities as well as emotional wellbeing. When pursuing forex trade, expectations can go from high to low. Depending on a trader’s resources and expertise, reaching a profitable level of forex trade can either be quick or extremely gradual. The most important thing to remember is that expectations must be realistic. This is based on the time spent mastering skills and optimizing performance in forex trade. Expectations should also come from your starting capital and your strategy in spend during executions. All these factors need to work together in order to build a thriving trading career.
Benefits of setting expectations as a forex trader
Expectations are great tools to communicate objectives, especially in a fast paced forex market. Though forex trading is a one man job, it is beneficial to set trading expectations for personal goals. Without them, traders may have a more difficult time with structure and motivation. For more efficiency and positivity, here are the best benefits of setting healthy expectations from trading:
- Applying personal management
- Creates a more proactive mindset
- Promotes positive self-identity
- Encourages problem solving
- Boosts organization and planning of strategies
How to set your expectations
Setting realistic expectations can create the right mindset and a clear direction for all trading activities. It enables traders to be in the moment and focus on every step of the process. To be more efficient in your goals, developing expectations for optimal emotional health will ultimately help in trading success. Here are 10 healthy ways to set expectations for the progress of your forex trading career:
Set the right expectations
Setting the right expectations for your career is key to continual development. When initially determining expectations, there is usually a discrepancy of setting them too high or too low. At the beginning stages of trading, extremely low expectations can possibly lessen efforts. Setting your expectations too high may also lead to negativity when unexpected trading losses occur. To initiate the correct expectations, traders need to be more business minded and objective. When looking at your expectations from trading, try not to view them as high or low. Analyze your current skills and resources. Depending on where you are in forex education and capital, what realistic goal can you set for that certain time frame?
Also set personal goals
Much of forex trading also deals with personal drive and self-motivation. Aside from career goals expectations are driven from the goals you set for yourself. Forex trading goals are vital in optimizing systems and executions. Aside from this, having personal goals can also drive continuous growth. Since traders are in control of their own time and dedication, setting personal goals can ensure the right path towards profitable trades.
Apply optimism in your expectations
To have healthy expectations from forex trading, keep in mind that being realistic and optimistic should go hand in hand. Being more practical can develop a clear guide towards accomplishments. Aside from this, it is greatly beneficial to also apply optimism. Since being realistic can mean realising personal strengths and weaknesses, applying a positive outlook can inspire motivation instead of discouragement. With a positive mindset, narrow down on what is achievable and plan on how to reach higher targets.
Observe and optimize
Oftentimes, expectations from forex trading can change after gaining more experience in the market. To help set the right expectations in every level, you will need to gain insight of your current performance and establish a baseline. This is a healthy way of setting expectations because it allows you to view your performance and trades without attachment. After experience from a live account or a demo account, review the results and observe the incoming information to be able to apply the right expectations. After getting feedback, optimize your strategy and implement expectations to keep momentum.
Know your limits
Learn your limits for all aspects of forex trading. To set expectations with a healthy mindset, it is beneficial to know your limits and work towards goals. Here are common limitations to consider when setting expectations in forex trading:
- The capital you are willing to set aside and invest for forex trading.
- The personal schedule that is best for you when trading multiple markets.
- The amount of time you will need to dedicate to proper forex education.
Consider to expect the unexpected
The forex market is unpredictable. With trades affected by world events or unforeseen financial activity, it is helpful for a trader’s wellbeing to think that unexpected movements are part of the process. When setting expectations from forex trading, it is a healthy practice to consider that the forex market may not move as you planned. When facing unexpected events, Finer Minds suggests to note down the lessons you can gain from the experience and the right action you can take from there.
Research and organize
Since forex trading requires a great understanding of the market, traders need to do research for the best sources of information and organize. Doing this can set healthy trading expectations because it provides the details on what you need to do to reach your profit goals. Researching allows traders to understand the full process of trading as well as success stories for motivation. After research, create an action plan with your expectations in mind.
Make better internal decisions
Internal decisions drive our expectations and, eventually, our actions. Making better internal decisions can help in setting expectations because it improves thought process as well as reactions.Expectations change as traders go from one profitable trade to the next. Because of this, personal mindset is essential when making better choices. From time to time, check on how you make decisions when trading. Does it come from a place of incoming data or from overconfidence?
Embrace the challenges
For those who truly know the forex market, the challenges involved in trading are part of the process and essential. When setting expectations, it is good to know that forex trading requires patience and hard work. This means following your own personal pace for optimizing strategies and performance. Embracing challenges can also help you to prepare both systems and mindset. This makes way for proactive efforts towards any trading failure.
Be honest with your expectations from the market
Lastly, it is highly necessary to know your reasons for forex trading, especially in the beginning of your journey. Oftentimes, new forex traders tend to have uninformed notions of instant profit or large yields. Because of this, be honest with what you expect from getting into forex trading. This enables new traders to avoid making assumptions of immediate success. When going through the learning curve, it creates better awareness of the work needed to be profitable in forex trading.
Let your expectations help you!
“The quality of our expectations determines the quality of our action.” – Jean-Baptiste André Godin
Make sure expectations are helping your trades. It is essential to make sure that expectations act as tools to achieve a more goal-oriented mindset. It is a way for traders to have a certain control over mindset towards trades. Over time, setting healthy expectations builds stronger trading character.When seeking success in forex trading, it is vital to set a realistic yet optimistic outcome. While understanding your limitations, apply the healthy ways to set expectations from the forex market while creating a guideline towards target goals.