Have you ever thought that delayed gratification could be beneficial if you are a Forex trader? Why is it beneficial? What could I get from it? In order to answer that, first, let us look at the definition of delayed gratification below here. After that, I would try to analyze the relations between delayed gratification and trading in the Forex market.
Delayed Gratification
Okay, what is delayed gratification? For those who do not know, according to Conti (2019), delayed gratification is the ability where a person could resist the urge to gain an instant reward to get a better reward than the instant reward. This means a person who has this ability would be able to be patient in achieving what he or she really wants.
It could be seen when you go out of your house yet did not eat food first. Then, when you are outside of your house, you feel your hunger is irresistible. At the same time, you previously have planned to save your money by not spending a certain amount of money. However, in front of you, there is a street food vendor which makes you want to buy food from there.
This is where delayed gratification played its role where you have two choices. The first choice is you could not resist your hunger and choose the instant reward, that is, you buy that tasty food at the street food vendor and you failed to save your money. However, if you are able to delay gratification and be patient enough to wait and eat at your house or you previously have eaten at your house, then, you would be able to save your money.
The Reason Why It Is Beneficial For Forex Traders
Now, we already know the definition of delayed gratification plus the example I have given you from the previous paragraph. If you have understood it, then, let me try to analyze why it is beneficial to Forex traders who have this delayed gratification ability to their trading performance in the Forex market with the simple example below.
However, before that, do remember that this is part of trading psychology and others may have different methods to approach the Forex market. Okay, let us delve into the example. Just called Budi is a Forex trader who has delayed gratification ability while Anton is also a Forex trader but he does not have the ability that Budi has.
Time after time, Budi performed better than Anton who lost much money in the Forex market. Why is it happening? Well, coincidentally, Budi and Anton, at first, have the same solid following the trend trading plan. However, Budi knows that this trading plan has a low accuracy yet is profitable in the long run while Anton wants an instant reward so Anton rationalizes to change his trading plan whenever he is on a losing streak in the Forex market but when the losing streak comes again, Anton did the same thing again that is, changing his plan in search for a "perfect plan" which leads Anton to an inconsistent set of actions that eventually lead to the inconsistent results.
Conclusion
Delayed gratification is certainly a useful skill to master not just for Forex traders but in your whole life too because you could train your patience to get a better reward than an instant reward in front of you. In forex, this could be seen when you do not have patience with the result you want so you try to change from one plan to another plan and it would be repeated like that if you do not have delayed gratification ability. While In life, you could see the example below the definition of delayed gratification where you could save your money instead of buying food from a street food vendor if you are able to resist your hunger or you previously have eaten food at your house. Thank you for reading.
Written by Andre I.
Reference
Conti, Regina. 2019. Delay of Gratification. Retrieved from Britannica. (Accessed 20 January 2022): https://www.britannica.com/science/delay-of-gratification