The other day my 18-year-old daughter, who is wise beyond her years, said, "Dad creativity is failure." Truer words have not been spoken. What she meant of course was that any creative endeavour, any act of exploration implies the prospect of failure. The very definition of creativity is to do something out of the ordinary, to experiment with the unknown.

Typically, exploration and experimentation end in failure not just once or twice, but hundreds of times. Legend has it that it took Thomas Edison 10,000 tries to invent the light bulb. Thomas Edison was interviewed by a young reporter who boldly asked if he felt like a failure and if he thought he should just give up. Perplexed, Edison replied, "Young man, why would I feel like a failure? And why would I ever give up? I now know definitively over 9,000 ways that an electric light bulb will not work. Success is almost in my grasp."

Somehow in all other areas of our life we accept the fact that failure is just a normal part of the process. When it comes to trading however, we expect nothing but perfection. The reason is money. As human beings, we are more than willing to sacrifice time and labor in our pursuit of creativity, because we do not assign any clear monetary value to it. But the moment we lose a few pips on some new strategy, we are ready to fold up our tent and go home. That’s a very big mistake. Most traders never get beyond the novice stage, not because they are not smart enough to figure out the market but because they are afraid to lose money. Dismayed and dispirited, they quit before they ever get a chance to learn how to play the game.

That's why it is vital to have a live "experimental" account in FX. This should be a completely separate account from your "serious" money. Ideally, it should be situated at a different broker in order to avoid any temptation to commingle funds. The only function of this account is to give you complete and total freedom to try any trade you like and your only mandate is to keep the equity of the account as close to even as possible. The idea is to preserve your "play" capital for as long as you can while you experiment with a variety of methodologies.

Giving yourself the freedom to fail will ultimately put you on a path to success. You stop being afraid of the market and start taking the trades that you want. Paradoxically, since you know that this money "doesn’t count", you are actually much quicker to take a loss, focusing less on the value of the equity in your account and more on the merit of your strategy. In short you trade teh way you should and as you become more comfortable with the market those good trading habits are transferred to your “real” account. You learn to take stops with equanimity. Take only those trades that setup to your plan while minimizing your use of leverage. Best of all the experimental account serves as living laboratory for new ideas and hopefully turns you into a better trader as time goes by.

As my daughter said, creativity is failure. So here to failing hard and failing often as you strive towards success.

Boris Schlossberg serves as director of currency research at GFT, and runs bktraderfx.com.