In the legal profession, lawyers and advocates are always guided by one major ethical code throughout their practice, whether in the courts or their outdoor legal engagements; they must never disclose or discuss details shared to them by their clients in confidence with outside parties. This practice is commonly referred to as ‘The Rule of Confidentiality.’ With this code of practice, any details shared by a lawyer in a court of law that was disclosed to them in confidence by their clients is dismissible and can be rendered futile by the presiding judge/advocate. This rule holds grounds throughout their practice unless the courts or the Law otherwise demands or provides grounds strong enough to necessitate the lawyer/advocate to disclose such confidential information.
That’s too much legal talk for a Forex & CFD’s trading article, right? All this will make total sense in a moment. Let’s call it ‘the preempting before the sentence.’
The rule of information confidentiality applies equally for the esteemed medical profession. No doctor or medical practitioner is allowed to discuss their patients’ diagnosis and treatment status with their colleagues or spouses. The ‘Confidentiality Rule’ holds grounds and guides their professional practice, the same way as the legal profession.It is with this resonance that as professional Forex and CFD’s traders, we must as well uphold this healthy code of ethical practice when going about our trading activities, and to stay truthful to the Rule of Confidentiality. Never at any point and time should a trader share or make public their open/running trades to their friends or to the public. The fact that isn’t an oversight body to keep us in-check in our adherence to this rule must be our very reason to develop self-engraved discipline if we are to achieve meaningful and long term trading success. There are very few professions, not even the legal nor the medical profession, where the rule of confidentiality has ever been so imperative to the welfare and value-based performance than in the trading business. The ability to develop strong self-restraint and discipline among traders cannot be overstated. This principle falls on the significance of upholding the right trading psychology as a strategic ingredient in achieving long term successful trading.
The main reasoning behind this rule is that once a trader makes their trades known to their peers or to the public, or any other party for that matter, (even worse to their spouses) is that it invites the emotional burden of ego and pride, driven by the desire ‘to be right’. Human beings possess an inborn urge to be right. Over the years, society has condemned failure and losses as if they define your ultimate destiny. On the contrary, it is the challenges, failures, and losses we encounter in life that grow our resilience and grit to break free and make a mark in achieving success. As a rule of the thumb, anyone who doesn’t experience failure or losses, whether in trading or in life, is either not trying at all or not doing enough, and is therefore self-limiting.
At Fourthstreet Consultants, we don’t discuss or publicize our live trades. This only causes one to grow the ‘need’ to convince the other party of how ‘right’ they were. Consequently, this mounts their ego and clouds their judgment, thereby distorting their actions, which ultimately leads to costly mistakes. Mistakes that could easily be avoided by keeping calm, and strictly following your trading plan to guide all your actions in the markets.
It’s okay to share trading ideas and thoughts as that shows one’s command and understanding of their trading business, but no trader should ever make their personal open trades public, unless one is doing it purely for educational purposes only.
For instance, Module (III) of our comprehensive Forex course covers a full three months of live trading. We took our time to record every trade we took live on the market charts for our trainees/traders, recording both the losing and the winning trades. We adopted this approach because there’s no better way of teaching than illustrating live. Every trainer must demonstrate their craft or skills live to their students. Otherwise how can you teach that which you can’t practice? The recorded live trading sessions, together with the test of the Forex trading course educational content is only accessible to our members who sign up for our Online course.
The goal was to illustrate and teach our traders that losses are part of the trading business, the same way you cannot avoid losses in life or in any other ‘real’ business. You can only control and keep the losses small, while locking in big profitable trades. At the end of the three months of our live trading as is covered in our Online Forex course, (which is essentially a quarter of a year) we made a great deal of net profit, even with the few losses we encountered factored in.
Lesson of the day; whether you’re a novice or an experienced trader, strive to develop the discipline of ‘not disclosing your open trades,’ keep them private. In case you get the urge to talk about them, it’s advised you write them down in your trading journal to keep track of your progress and performance. Otherwise they will dent your ego and confidence in your trading system, especially if your trades end up as losers.
Founder, Fourthstreet Consultants.