Understanding How to Switch Gears Without Hesitation While Trading
The market can be likened to a running stream that changes direction at will. I always tell people that you don’t predict market moves; you ride along with the flow. You are like debris thrown on flowing water; you flow in the direction of the water and not against it.
The skill of reversing your gears because the market says you do so is one that most traders don’t have, as they have learned to hold on to losing positions, expecting a change in market direction, and are rigid in their mental approach to the market.
Understanding Trading Fluidity
Trading fluidity is a trading skill that involves flexibility and changeability while trading. A trader with this skill is very open to what the market is doing at the moment and rides with the market instead of predicting its next move.
This trader does not find it difficult to close a trade the very instant he perceives that the market is not going in his anticipated direction anymore. He also does not hesitate to pull the trigger on the buy and sell buttons the very moment he gets a clear picture of the market direction.
A trader who lacks the skill of fluidity will always and most likely be caught on the wrong side of a big move because, even though he may have a clear perception of a change in market structure or a clear reversal pattern being printed, he will still find it hard to close his losing positions or reverse them to join the winning train.
Your inability to accept the obvious could leave you trading in a state of illusion and hoping that the market will reverse and go your way.
I always ask one question: why wait for a reversal when you can be in the swing or make an impulse move? Most traders trade this way. They can see that price is obviously set for an impulse move that is against their position, but instead of cutting their losses, they decide to remain in the trade, hoping that when the swing is over, there will be a retracement to their initial entry point. This is a signature of doom and not exactly a great way to kill the market.
Cutting Your Losses
You may have heard this weird quote: “Successful traders love to lose.” I have a firm belief that this is a definition of trading fluidity.
These traders understand that to gain, you must lose and that if it means closing a losing position to take a winning one later or even reversing a losing position in an instant, they will do all that without hesitation. Until you learn to take losses, you cannot learn to take wins. Losses are a doorway for wins.
Our mental framework has been wired by society to avoid failures and losses at all costs. These indoctrinations have made many so risk-averse that it has become a problem in their trading careers because they can’t even pull the trigger or close a losing position.
How Being Risk-Averse Affects Traders’ Perceptions
Your perception is at the mercy of your emotions. Emotions have a way of blocking perception or giving clarity to perception. Your fears can create an illusion that prevents objectivity while trading. Either the fear that comes before you take a trade in the form of avoiding a loss of trading equity in cases where the market goes against you or the fear that comes after you take a trade in the form of avoiding a loss by insisting that you must get out of that position at a profit, irrespective of what the market is currently saying.
Fear, like any other emotion, blocks trading fluidity by preventing the trader from acting on a clear-cut perception that would otherwise be in his favor.
Have you ever thought clearly in a state of strong emotional charge? You would agree with me that it’s very difficult to have a clear thought process with such an emotional framework.
Trading is an endeavor that requires a relaxed mind, free of any form of negative emotional charge. It is only when this is achieved that perception can be utilized to its full capacity.
Being a Fluid Trader
So what does it take to be a fluid trader?
The earlier sections of this article must have given you some instructional ideas as to what you need to do and the habits that must be changed to become a fluid trader. But let me bring specificity to this particular question.
To be a fluid trader, you need to first redefine your mindset by reevaluating your fears and why you think along a particular line of thought. You may need to be more risk-tolerant and accept the fact that trading is a high-risk game for the mentally strong. This means you must learn to be a responsible trader who does not shy away from the cost of success but pays that price at all costs.
When your mind has accepted the worst that can happen in any given trading scenario, you tend to be at rest, with the pathway of your perception unblocked and ready to grant you insight into the market direction or what the market may be doing at the moment.
When you have learned to take responsibility, you won’t find it difficult to close losing positions or even reverse them if need be.
Fluidity is a pathway to profitability. Assume that mental posture today.
