The proactive trader
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    The proactive trader

    How do you think – what is the most important psychological ability for a trader? I know, you will answer, that this is discipline. But it’s sort of characteristic that describes certain type of behavior (in fact, relevance of actual and required behavior), but what about psychological characteristic, or, better – characteristic of mindset?

    I would not be wrong if say, that this core ability is ability to be proactive.
    Term «proactive» was brought to vocabulary by Stephen Covey – author of numerous books on productivity. Now, this term is used by many authors, whilst proactivity has tremendous impact on self-productivity not only in trading, but in other performance oriented activities as well.

    The best way to explain proactivity is to talk about it’s opposite – «reactivity». Since early childhood we are taught to be reactive. Parents who teach children to operate in the world of threats and dangers, help them build reactive behavior. When you have something repeated so frequently that is becomes automatic, you can act in «autopilot mode». When you, say, drive a car or do something very familiar, you are not thinking about it – you are just acting. It’s nothing wrong about us, that’s how our brain operates – that’s the way brain uses to reduce costs of energy to process information. Automatic way of response to a certain event is highly useful when we deal with action that can be successfully reproduced many times.

    But reality in performance and highly competitive fields (which, of course, concerns trading as well) is so that no actions can be successfully reproduced in complete autopilot mode. In fact, every field that requires creative thinking can’t be mastered by constructing a template and simply responding to new challenges with limited set of pre-constructed actions. There are several reasons for that.

    1. Data is ambiguous

    You will always have arguments for both destinations (long and short). That’s reality of the market. If you have no ambiguity – you have no opportunity (who otherwise will trade on the opposite side?). When you drive a car, you have almost no ambiguity – if you see red traffic light, you should stop, if you see green – you should drive.
    But in the marketplace, when you have both destinations and chances for any scenario, level of ambiguity can be overwhelming. Our brain is unable to build a template that can successfully adapt to market conditions. Experts say that about 3 months is required to build a neural network for solid mental template – when you’ve adapted to the certain type of market conditions, market changes and leaves you with confusion and frustration.

    So, reactive thinking doesn’t work in trading.

    2. Data flow is too frequent

    Reality is that when you are actively daytrading, data flow can be too frequent and our brain will be simply pushed in reactive thinking. When you don’t have enough time to process information, to put it in a context of big picture, to pause and reflect, your perception will be very superficial and as a result – reactive.
    You will unlikely go a step ahead from the market, you will be most likely act like a crowd and apply conventional wisdom or practice traditional «fight-or-flight» response and get «normal» results that mean that you will suffer financially.


    What is the solution?

    The solution is to develop proactive type of thinking and response. It occurs when you operate from metaposition, sit back and relax. It occurs when you observe all the mess out there but can combine all nuances together and eventually act in your own best interest.

    Proactivity is ability to choose your response (you can’t choose events or circumstances, but you choose your response to them). In trading, unless you are large market maker, you can’t influence markets and cause even a small fluctuation of price. That’s why all we can do in trading is to choose our response to events.

    And good news that proactivity as ability to make conscious choices, can be developed and trained. To become more creative you should increase your self-awareness as well as emotional intelligence, take responsibility for everything that is happening and train processing power of your brain.

    You can attend a new webinar on this topic. It is called «Decision making skills in trading». You can register here

    Good luck!

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    So far I understand with my less knowledge that we need to show our creativity in proper trading. Proper market analysis is also very important. With the self-initiative we need to develop our trading skill. In general I can say that trading with good ability is needed and for that we need to develop our trading ability.

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    Registered user PetraFX's Avatar
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    In this case, the reader or especially traders, should think that proactive trading is different with over trade. I think that a proactive trader must know his position, when does the best time to open a trading position and when does he exist from market. It will help him in taking profit, I mean maximize his profit and minimize his money gone. While over trade is negative for a trader. I think over trading can make him losing all fund in his forex trading activity.

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    Quote Originally Posted by Jamuna View Post
    So far I understand with my less knowledge that we need to show our creativity in proper trading. Proper market analysis is also very important. With the self-initiative we need to develop our trading skill. In general I can say that trading with good ability is needed and for that we need to develop our trading ability.
    Creativity is what you have to have in a process of trade selection. If we are discretionary traders (and most traders are discretionary traders), we should be flexible, open minded that are features of proactivity.

    In a nutshell, we should have wide set of choices instead of rigid. If we have wide set of choices, we will more often than not have opportunity to pick good trades and understand - what the market is doing?

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    Registered user lawners1791's Avatar
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    yes to work with the good basics of the technical preference to be as remarkable with the returnas delivered with the work of the manage. that is to put something more with the coffeecup with the different favour to add the difference as the remarks of the better relatives of the system to work with the request.

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    In this situation, people or especially investors, should think that practical dealing is different with over business. I think that a practical investor must know his place, when does the perfect time to start a dealing place and when does he are available from industry. It will help him in getting benefit, I mean increase his benefit and reduce his cash gone. While over business is adverse for a investor. I think over dealing can create him dropping all finance in his currency dealing action.

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    Quote Originally Posted by rai504 View Post
    In this situation, people or especially investors, should think that practical dealing is different with over business. I think that a practical investor must know his place, when does the perfect time to start a dealing place and when does he are available from industry. It will help him in getting benefit, I mean increase his benefit and reduce his cash gone. While over business is adverse for a investor. I think over dealing can create him dropping all finance in his currency dealing action.
    true what you say that a trader must memag better have the ability to trade with them using money management in trading and traders on the other hand should be better in the analysis in their trading because after all we are aware of in this trade that the trade will be well if we already know the market and the analytical skills that will be able to follow where the price will move and the risk management can reduce the risk of loss in error

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    yes i am agree with you that we should be proactive that is we should be active from the beginning and that is the best for forex trading and you also said should not reactive after conflict if one trader is proactive then he will be successfull in forex market one day and this is the best process for us and i am a proactive so that's my think..

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    My dear sir yes to work with the good basics of the technical preference to be as remarkable with the returnas delivered with the work of the manage. that is to put something more with the coffeecup with the different favour to add the difference as the remarks of the better relatives of the system to work with the request.

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    Quote Originally Posted by Value trader View Post
    1. Data is ambiguous

    You will always have arguments for both destinations (long and short). That’s reality of the market. If you have no ambiguity – you have no opportunity (who otherwise will trade on the opposite side?). When you drive a car, you have almost no ambiguity – if you see red traffic light, you should stop, if you see green – you should drive.
    to enter with the good trace with the further with the better preference to appeals of risks with the good implementation of the distinct of strategics to have with the commons. that is to shift more of relatives with the good commons on deliberating risks with the excellence.

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