Forex Faculty proposes that a good trading strategy should be constituted by:
- The enabling force: having an appropriate motivation: why should you trade forex in the first place.
- The constraint force: possessing an appropriate formulation: why you should do what you do when you trade forex.
The motivation is covered in this foundation section while the formulation (that shapes Forex Faculty's trading principals; see learn. (we will explain about this later; don't worry about this for now :)) will be spread through Forex Faculty's lessons.
We define the trading foundation as a collective reasons of why we should invest or participate in Forex Trading, that is, the trading foundation is the motivation. A strong and appropriate motivation will be a very sturdy foundation for your forex trading. This foundation is important as a stronghold that you can rely on for your forex trading. Will you invest in something you can't depend on? We know we would not.
It is important to have an appropriate motivation. Having a good motivation does not mean that it will thereby be appropriate and adaptive. Wanting to support your family is a very good motivation. But is it appropriate?
Having an inappropriate motivation, especially for forex trading, can kill your future. Please realize that however good or even altruistic your motivation is, it might not be appropriate. Forex Trading is a real business. If you face it with an inappropriate motivation, you will lose.
Now on to the motivation: the psychological aspect. We frequently state that good psychology is the basis of successful trading. We must know why we should invest in Forex Trading in the first place from the perspective of psychology. What benefits, in psychological terms, can it bring? And as crucially, if possible, the benefits should be reciprocal in nature: what can psychology give as a support for forex trading? A reciprocal/mutual connection is very important because it forms a very strong foundation compared to a one way connection. As an analogy, a relationship lasts much longer if you love your partner and your partner loves you.
That brings us to "What is the appropriate psychological motivation?" We believe that "to maintain a peace of mind" is the necessary condition of an appropriate motivation for forex trading because it is evolutionary effective for helping you attain the adaptive mindset for forex trading.
We are also aware that psychology alone is not sufficient as a strong foundation. Psychology all by itself does not make money. Psychology is necessary as a foundation of successful trading, but it is not sufficient. We also need the crucial financial aspects.
Much like the psychological aspect, we must know why, from the financial perspective, we should invest in Forex Trading in the first place. What benefits, in financial terms, can it bring? Again, a reciprocal connection is important here: what can the financial aspect give as a support for forex trading? As an illustration as to why reciprocal connection is important: a business started by John and Joseph will persists much longer if John trusts Joseph and Joseph trusts John.
A good financial aspect of a trading foundation can be figured out by thinking about the followings:
- achieving financial freedom
- why forex trading can take us to a financial freedom
- the advantage of forex trading compared to other kinds of investment
- how robust is forex trading as an investment?
So where are we now? We have come from introducing the 2 different aspects that constitute a strong trading foundation. But why is that important? We are now at our first point of integration: Forex Faculty trading foundation is a result of integrating psychology with finance. Why is an integration between the two important?
Forex Trading is not just about finance. Forex Trading is also a play of mass psychology. We are fighting against the rest of the traders in the world. They are real people! They are the true mover of the market because they are the ones who take actions. Market news do not directly move the market. Instead, the news touch people's cognition and psychology. And because people think that they see there is an opportunity due to the news, they then take action (buy/sell). However, nothing will happen if no one takes action. Winning the Forex Trading is to excel among other traders: significant edge in both financial strategy and psychological expertise is compulsory.
Conclusion: our foundation is built with 2 distinct aspects of a strong trading foundation: psychological and financial. This foundation explicates the reasons why we should invest in Forex Trading in the first place (i.e. having the appropriate motivation) from both psychological and financial perspectives and more importantly, why knowing the reasons (so you can rely on the motivation) is also as important.
