FXP Stock Trading

Pianist Concert Tradestation

I frequently hear the question, "How much money will I make?" When we ask this question, we are looking at trading in the wrong way. Try to think of it this way: You are not trying to "make money," but instead you are trying to master a process.

Ask yourself this question: What does a concert pianist focus on when he is practicing? Most likely, he is concerned with the task at hand—"Are my dynamics correct? Am I hitting the keys too hard or too soft?" What does a brilliant hockey player like Alexander Ovechkin think about when he is blazing a path around the other team's defense and toward the net? I sincerely doubt that Alex the Great is thinking about money; he is probably calculating how sharply he can turn on his skates at his current speed without losing an edge. When Michelangelo applied his artistry to the ceiling of the Sistine Chapel, I somehow doubt that he was calculating his hourly pay for the project.

"When I go out on the ice, I just think about my skating. I forget it is a competition."

—Katarina Witt, Figure Skater, Olympic Gold Medalist

Anyone who does excellent work of any kind is probably focused on that work alone, and when the mind begins to wander toward the payoff, the work is likely to suffer. Focus instead on excellence, on performing the task flawlessly, and the money will follow.

I know this might sound crazy, but try not to think about money while you are trading. Money is an emotional topic, and when we think about money while trading, it tends to cloud our judgment. Our minds wander toward the things we could buy with that money, and away from the task at hand.

So, whether you are practicing in a demo account or trading in a live account, try thinking in terms of playing a game, as opposed to trading for money. You are playing a game, and the object is to collect points or pips. This might help to protect you from the emotional ramifications of thinking about money while you are trading.

Finally, whether you are practicing or playing, you must acquire an attitude of persistence. Consider the following quote, attributed to a heavyweight boxing champion.

"Fight one more round. When your feet are so tired that you have to shuffle back to the center of the ring, fight one more round. When your arms are so tired that you can hardly lift your hands to come on guard, fight one more round. When your nose is bleeding and your eyes are black and you are so tired that you wish your opponent would crack you one on the jaw and put you to sleep, fight one more round—remembering that the man who always fights one more round is never whipped."

—James J. "Gentleman Jim" Corbett, Heavyweight Boxing Champ

It's just like my American football coach always used to say, "We practice like we play." This means that, even though it's only practice, you run until your lungs feel they are about to burst—and then run harder. Even though that guy on the other side of the line of scrimmage is your good friend, you are going to hit him as hard as you possibly can on the next play. In other words, play like you mean it.

In the heat of battle, when you must react in a split second and have no time to think, your reaction will depend on the habits you've formed. The habits we take with us onto the field of play are created on the practice field. But winning doesn't take place when we step on to the field; we win or lose long before we press the key and place the trade. We win or lose based on our preparation for the game, or for the trade. In closing, consider the following statement from a book that has been lionized by traders for decades:

"The victorious strategist only seeks battle after victory has been won; whereas he who is destined to defeat first fights and afterwards looks for victory."