– Note: This is a very important article if you are wanting to set up your trading base for the rest of the year or start turning your Forex trading around with a new mindset. Make sure you have the time to give this lesson your 100% attention. Make yourself a coffee or cold drink and ensure you have 10 minutes of uninterrupted time to fully engage in what you are about to read. At the bottom of the article in the comments section I would love to hear what you want to achieve and what goals you have for your Forex trading in 2015. For now take your drink, get comfortable and enjoy!
Often a lot of traders will be right on the verge of success with their trading, but they don’t know it. How can you ever know how close you are too success until you actually get there – right? It is like when digging a hole for gold. You could dig for two weeks and stop, thinking that you are a mile away from the gold, when in reality you could be all but just one more dig of a shovel away for all you know and it could be that one more dig of the shovel that hits the gold vein and BAM – the gold starts flowing.
And so it is for a lot of traders that it often happens that exactly same way. Often with traders it is not a dig of a shovel, but a lightbulb moment where a trader understands or just ‘gets’ something where they previously did not fully comprehend it in the past and this watershed moment helps them in the future. This moment normally comes with something that a trader has battled with for a long time in their Forex trading until it just finally clicks and the trader has their ‘aha’ moment.
Traders will either persevere and continue digging until they become a success or they will quit not knowing whether they were just one more small shovel dig away or not, just like the picture of the man shows above turning and walking away just before he strikes it rich.
In this article I am about to take you through some strategies and tips that you can use both right now and through this year to get your trading started off on the right foot and also so that you start digging in the right direction closer to your gold.
Make This The Year You Stop System Hopping
Pick your method, commit to it and then perfect it. The reasons traders don’t make money with the many different methods that they are continually jumping to is not because of the systems. It is because of what the trader is continually doing. It is the same mistakes that no matter what system the trader goes to mean that they will continually lose money. These are the mistakes such as overtrading, entering trades even when they know they shouldn’t and when they then lose money taking revenge trades to get the losses back which costs more losing trades.
The other major mistakes that tend to be repeated time and again all revolve around emotions. For example; a trader has a few losses and instead of continuing to follow their plan and letting their trading edge play out, they begin to panic and worry. Instead of just continuing to trade the exact same setups like they should be, the trader moves away from their plan and starts trading different setups. As soon as the trader does this, they may as well move to another system because the whole idea of having a trading edge is that the edge will work out over time, but for it to work out the trader needs to play the exact same setups time and again. For the trading edge to work out it takes into account all the wins, losses, break evens and everything and has a profitable edge over all, but when a trader has a few losses and then stops playing the same types of setups they have just had losses on, they kill their edge.
The flip side to this is when traders get really aggressive and confident and whilst this is good whilst it lasts, this can be a sure-fire way to blow an account. This normally starts with the trader on a roll and on a winning streak. It then moves to the trader upping their risk levels because they get into the mindset of greed and thinking that with making so many winners they may as well make the most of it and risk more money right? Eventually and always the losses come and they do always come within a trading edge, but when the over-confident trader is trading they don’t factor in the losses. The problem for this trader is that they get really hurt and upset when they lose and want to quickly get that feeling back that they had of confidence and of being on a roll. The problem is that it is gone and if they are not very, very careful so will large chunks of their account.
These are just a few reasons why no matter what the method or system, traders have a lot more to learn than just a trading strategy of where to find a trigger signal on a chart. There are a lot of other reasons such as dealing with the uncertainty of the markets and having discipline. All of these things have nothing at all to do with a strategy, but have huge impacts on results and are why traders spend endless hours thinking it is the strategy that is the problem and is going to help them, when in fact it is themselves they need to work on if they want to find success.
When traders approach their trading from the mindset of the “I want to get rich now” and don’t want to put in the time or effort, they get out of it what they put in and that is what a lot of system hoppers get. All they are doing is just hopping from system to system looking for their “Holy Grail” of what is going to make them their next million bucks, rather than approaching trading as something that they are interested in and genuinely want to learn and study.
If you want to be a successful trader, then you need to stop system hopping and commit to a method that you feel suits your personal style. The only way that you are going to be able to work on yourself and work on perfecting the markets is by sticking with a method and then learning to perfect it overtime. You cannot expect to master any method or system over a few weeks and then start pumping out profits consistently.
Get a Forex Trading Education
Once you pick your method you need to pick and stick. You need to make a commitment to yourself that you are going to study the method and perfect it. You are not going to jump out at the first sign of trouble or hardship, but instead you are going to put in the study and chart time and in return you will reap your rewards. I know the following comparison is often made, but that is because it is accurate; so often traders expect to make money and consistently after only days or weeks with very minimal study and chart time experience. When we put this up against almost any other field in the world it just does not compare. For example; Doctors, Lawyers or Pilots all have years of study before having any earning capacity and with Forex trading the major difference is that the limit on how much a trader can earn is only capped by how good of trader they are.
Even other jobs without major education degrees like admin, secretary or truck driver for example all require study, education and some sort of experience before money can be made. For example; a person employed as an admin may need experience and skills with processors and software such as Microsoft word, PowerPoint, spreadsheets, touch typing and communication equipment before they can start working and making money. Forex and Futures trading is a very skilled and at times stressful business and yet it baffles me how many times I see smart people think they will succeed with zero education.
Make sure that this year you find a system or method that suits you and you get EDUCATED properly. Don’t make the same mistake that is made time and time again everyday in the markets by new traders. New traders fall into the trap of thinking they will educate themselves in the markets by using their live trading account. Instead of setting aside time to really learn their method or system that they have chosen and then taking the time to get accustomed to it, these traders jump into the market with the attitude “I will spend $500 of my live account money learning how to trade in the real markets”. The problem with this attitude is that after the trader has blown their $500 in the markets, all they have learned is how to lose $500 and they are right back at square one with no education and now $500 lighter. Don’t fall for this trap. Trading is a serious business and only those who treat it as such make money. Get educated and make sure you are profitable first before moving over onto your live account.
Prioritise Your Health
It is super important that your health is something your prioritise. Quite simply; when we don’t feel well, we don’t feel like working. No one wants to work when they are not feeling well because they instead feel lazy and lethargic. This is a problem for your trading. For your trading to be the best it can be you need to be on top of your game both physically and mentally.
I had a personal experience of this myself that showed me how our health can really affect our trading if we do not prioritise it and make sure that we continue to put our bodies and minds in the right spaces. With my situation I started to get very tired to the point where I was falling asleep in the afternoon and was often tired and lethargic even after having eight hours sleep. I was also finding it hard to concentrate for long periods of time. For me this was as simple as visiting my Doctor and working out that I had an iron deficiency and as soon as I upped my iron intake with a supplement and vitamin C, my whole health levels changed, including mood, mental state and concentration, not to mention that I am no longer tired and cranky for no reason.
The other major reason why you really need to prioritise your health is because you need to be at the top of your game. You need your memory to be functioning at the best that it can and the quicker you can think and act, the better you can trade and obviously the better your results are more likely to be. When you are not well or you are run down, this will affect your performance whether you realise it or not. If you are a bit off you won’t think as clearly which means you won’t act as fast. You won’t be able to count or add up as fast and your memory won’t be as sharp. You are also a lot more emotional when your physical body is weak or run down. I am sure you know the feeling of how much easier it is to feel strong in the mind when the body is also feeling strong.
Whilst you may not read too many other Forex blogs discussing your health, to start your Forex trading year off on the right foot you need to prioritise your health because it can have a HUGE impact on your trading results. Please make sure that you get your body and mind in order because as we know trading is done in the mind, not with the hands and for this we need to be fit and firing to be successful. You can read more about how you can do this with certain key supplements with the trading lesson;
Trade for 2015 – Not Just One Night
We now have a new year in front of us and that is really exciting! A really huge mistake that a massive proportion of especially new traders make is trying to make a lot of money too fast. In other words; these traders are trying to make a heap of trades and make huge percentages of their account in record time. They are trying to make their fortune in one night or one week. It is a bit like the system hopper, trying to make their riches with the different systems.
The problem with this is that it nearly always ends badly. Overtrading is the number one trading account killer – bar none. Whilst the trader thinks they are going to make a killing and they have all their sums worked out of how much they are going to make, what really happens is that they make a ton of trades really quickly that liquidate their account, and fast.
The best thing traders can do for their trading is to switch their mindset around. Whilst every trader in the world wants to make their money as quickly as they can, every trader also wants to be successful longterm as well and the switch that really helps is to switch from trying to become rich in just one night to thinking more longterm with your trading. With this mindset you are going to change from only thinking about making as much money right now to thinking about over the next medium to longer term period.
An example of this would be; instead of going into the market and trying to make 30 trades in one night and trying to make 50% of my account and ending up blowing my account because I am trying to make all my riches in my night, I would instead look towards the next 12 months and start setting some trading goals. Because I am thinking this way I am more relaxed. It allows me to take only the very best trades when they come up.
As soon as you change to this mindset it allows you to start thinking with a trading edge and that is the most important part of all. When the trader is trying to make their riches in one night they are not thinking with an edge and by trading like that it shows that they believe they don’t really have one. When you make the change to longer term thinking it does not influence your ability to make money any less fast, but it does allow you to think with an edge, which is crucial. Thinking and trading with a trading edge means that you will have a lot clearer mind that has a lot less stress and you are not pinning your whole trading business on winning every trade, but coming out on top overall after your edge works out. You can read about exactly what a trading edge is and how you can create one of your own here;
A lot of traders especially new traders think that the more they trade, the more they are going to make and whilst obviously the more trades you make the more chances you have of making money, more does not always equal more and with Forex trading it often does not. Traders can make really super gains from the markets with only 3 -6 killer trades per month and yet most traders are trying to play 6+ trades every single night. Those traders that have the discipline to wait and play the best setups and not blow their money every time any old setup comes along are the traders who more often than not out do the market, not the traders making the buckets of trades.
Whilst most traders are wanting to make a lot of trades, what they should be aiming for is making money and turning a consistent profit like a normal business. From there the trader can ramp it up and try and make more and more trades, but to start with profitability has to be found and with consistency. The best way to do this is by being the sniper trader hiding in the bushes waiting patiently for the optimum targets to come along and then when they do taking just one shot to take them down, rather than standing way out in the open with a shot gun splattering bullets everywhere hoping that a target gets hit.
Set Clear and Defined Trading Goals
At the start of the year we have a really excellent time to sit down, take stock and firstly go through and be grateful for the goals that we have achieved in the year just gone. It is super important that we acknowledge our goals as we achieve them and we celebrate them. It is no good just making goals to just tick them off a list. They need to mean something and really be enjoyed when we reach them. It is important that you get into the habit of celebrating them. For example; when traders first become profitable I often tell them to first spend some of their profit on themselves or buy something nice for their partner, but just use part of that profit to reinforce that the goal has been reached
A huge reason a lot of people including traders don’t reach their goals is because of how they set up their goals and then how they go about achieving them. Whether you are setting a goal for three months, one year or five years, you need to first really sit and think about it and visualise it. Make sure this goal you are thinking about is super clear in your mind as if it were happening in the moment and, then write it out. The reason I say to then write it out is because your goals need to be really clearly defined. Goals that are just wishy washy and unclear are going to leave you feeling the same when you are grasping for inspiration and guidance.
Your goals need to be clear, have a timeline i,e; three months or five years etc., and be kept in a spot where you can go through them regularly. I personally am very private and do not let others see my goals and keep them in my wallet. This means I see them many times a day because I have them written on a flashcard next to my business and credit cards.
When setting your trading goals you need to make sure that you set them around your trading processes, the way you want to trade and all the things that you can control. What you want to make sure you stay away from is setting goals around how much money you can make or how many trades you can make. The reason for this is because you cannot control the market or what it does and by setting goals over these things it can often lead to pressure to force the market to reach a goal. An example of this may be to play extra trades when the trades are not there to be played because the trader wants to reach the monetary goal they have set for themselves.
Have a Cracking 2015!
It is now over to you; I hope you take these strategies and put them to good use. 2015 is your year to turn your trading around and switch your mindset to a bit longer term so that you can start making higher probability trades.
One final word; a major proportion of a traders success is defined by how they think, act, cope and are mentally when placing and managing their trades. Whilst a huge amount of focus goes into looking for systems and entries etc., the trader that understands and has strategies for dealing with uncertainty in the markets, are super disciplined and are strong in the markets will make any profitable system or method work.
My advice to any trader wanting to become successful is to spend time learning how to deal with the psychology of the markets. A lot of traders think it is boring and will never bother looking at it and that is why a lot of traders struggle and will forever struggle. A traders psychology can mean the difference between a good trader being decisive and following their plan or being uncertain and cutting a trade when they shouldn’t and taking a loss.
I am going to leave you with a final quote from Thomas A. Edison that I have personally always found inspiring.
“Our greatest weakness lies in giving up. The most certain way to succeed is always to try just one more time.”
Thomas A. Edison
All the success and many profitable trades in 2015,
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