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| - | BARELY a week goes by without a report on the level of confidence among consumers, businesspeople and investors. Optimism is what�s wanted�Keynes talked of the �animal spirits� that influence economic activity. Pessimists are routinely denounced as Jeremiahs. Those who try to bet on falling prices find their activities are restricted.
| + | "People who are successsful in anything are successful in all aspects of their lives. Success is not something that just happens in one area of your life. Success happens, because that's your personality. Success happens because you put that level of focus and motivation into every aspect of your life. To be successful, you really need to have a success mentality." |
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| - | A cheery disposition may be necessary for societies to function. Daniel Kahneman, a psychologist and Nobel economics laureate, has a chapter in his book �Thinking Fast and Slow� which describes overconfidence as �the engine of capitalism�. No entrepreneur can be sure that his planned investment will succeed but if no one took a risk, new products and jobs would never be created. A certain blindness to the odds may be necessary. According to Mr Kahneman, the chances of an American small business surviving for five years are just 35%. But ask individual entrepreneurs about their prospects and 81% think they have a better than seven-in-ten chance of success.
| + | This really struck home with me. In fact, it was a turning point in my life. |
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| | + | In order to succeed, I had to have a "success mindset" and not let anyone tell me that I couldn't achieve anything I set my mind to. |
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| - | This self-confidence may be innate, just as most people think they are better-than-average drivers. And it would seem logical that the most optimistic people gravitate towards entrepreneurship. That is good for consumers, who can select from a wider variety of products. Even the failed businesses serve a purpose. Daniel Gross, a journalist, wrote a book claiming that bubbles were good for economies since they leave behind infrastructure (canals, railways, fibre-optic cable) that can last for generations. | + | This is critically important for you in your quest to become a profitable Forex trader. |
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| - | But it is hard to make such a case for all bubbles. Anyone who has driven past a row of empty houses in the Irish countryside will realise that optimism can lead to wasteful investment. And Mr Kahneman cites studies that show how overoptimistic chief executives (as measured by the amount of stock they own) were more likely to gear up their balance-sheets and pay too much for acquisitions.
| + | Forex trading is something that many people try, but give up before they succeed. |
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| - | The problem with overoptimism was illustrated by the investment-bank collapses of 2008. The men who reached the top of such risk-taking organisations had, by definition, been successful in their previous bets. They believed this was due to skill, not luck, making them too sanguine about their ability to ride out the crisis.
| + | When I first set out to become a successful Forex trader, I |
| | + | didn't have any money, and a lot of people were telling me it was a big scam. |
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| - | A further problem with optimism is thus that it is pro-cyclical. The greatest moment of success for optimists will occur at the peak of a boom, when they will feel their instincts have been justified. Previous house-price rises will make buyers more optimistic about borrowing more money; and banks will be more optimistic about the prospect of being repaid.
| + | Everyone told me I couldn't make it happen, because I'd barely made it out of high school, and I didn't go to college. |
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| - | Financial assets are highly unusual in that rising prices tend to elicit higher demand. Analysts extrapolate recent rapid profits growth into the future, even though profits cannot rise faster than GDP indefinitely. If markets were truly efficient, price-earnings ratios should be lower than average at the top of the cycle, since investors should anticipate a reversion to the mean. Instead, high p/e ratios and rapid profits growth tend to go together.
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Current revision as of 15:18, 26 March 2013
"People who are successsful in anything are successful in all aspects of their lives. Success is not something that just happens in one area of your life. Success happens, because that's your personality. Success happens because you put that level of focus and motivation into every aspect of your life. To be successful, you really need to have a success mentality."
This really struck home with me. In fact, it was a turning point in my life.
In order to succeed, I had to have a "success mindset" and not let anyone tell me that I couldn't achieve anything I set my mind to.
This is critically important for you in your quest to become a profitable Forex trader.
Forex trading is something that many people try, but give up before they succeed.
When I first set out to become a successful Forex trader, I
didn't have any money, and a lot of people were telling me it was a big scam.
Everyone told me I couldn't make it happen, because I'd barely made it out of high school, and I didn't go to college.
