We have a tendency to use anchors, or strongly held initial beliefs, to make decisions, and sometimes these lead us astray. “ It is important to understand that "anchor bias" is everywhere. and is a negative for traders.
The anchor bias that most commonly affects amateur traders is that all it takes to succeed in Forex trading is hard work. That a person can succeed just as long as they are willing to put their head down, push through, and keep making trades.
Let's address why the misconception still stands to begin with. Why is that we can agree not everyone can be a lawyer, but somehow anyone can walk off the street and become a Forex trader?
The issue starts with the fact that most people don't know enough about the investment world to question if they have the right skill set and personality to survive in the industry. Most people can understand that a lawyer or chef needs a specific personality and skill to enter the field. They realize that simply reading law books or taking a cooking class is not going to make the average person qualified to work in the field. But when it comes to the financial world, most people are still left in mystery as to how it actually functions. In fact, most people truly believe there are no required skills for investment. That it's all a gamble.
Anyone can gamble. You don't need any special qualifications or personality traits to play the slots. You simply need money. If you have enough of it, your chances are just as good as the next guys. Right? Well, that's the misconception. If trading is conceived as a game then it's inevitable that a person will place no priority on considering whether or not they have the right traits.
But the fact is, Forex does require skills, because even if it were all just a game there would still be winners and losers. And which side you ended up on would depend on the skills you have for the game. In other words, like being a lawyer there are some people who will be far more advantageous than others because they have the right traits, talents, and personality for the field.
Every trader will develop a trading personality. But the fact of the matter is some types of personalities are more beneficial for Forex than others. Another thing to keep in mind is that your trading personality is heavily constructed by your normal personality. For example, if you are someone who struggles with decision making, has difficulty trusting yourself, or has a high level of fear and doubt, you will have a difficult journey in Forex. Such weaknesses will work against you. To truly improve your chances of success as a trader, you would have to recognize and overcome these hurdles before you commit to being a trader. The key phrase here is “before you commit to trading.” Most people don't do this however. They enter Forex without having dealt with personality issues that become obstacles for them.
The trouble is people don't realize how much of a commitment they are making if they plan to be traders. Time span alone, it takes five to ten years to build up your skill. To have to resolve personality weaknesses while you try to learn Forex makes the task more exhausting. This isn't to say it can't be done, but you have to realize you are competing with traders who already have the right traits to become consistently profitable traders. They are able to focus on building their edge and honing their skills without having to “build” the right personality.
We can't all be lawyers because not everyone has the personality to make them successful in that field, and this also applies to Forex. You must consider carefully before entering Forex if you have traits that will work against you, and if you are truly cut out for the industry.