First and foremost, the following vision for the FX365 Institute and its students is wholly my personal view as a student and instructor.
Why the change from two trading products to one? In my opinion, the answer is simple—to more quickly than ever before bring all of our students to higher levels of success as professional Forex currency traders.
Technically, the school’s reinvigorated mission statement is to get our students into real money accounts sooner, and, up the lot ladder faster. Ideally, by the end of year one, we’d like to see our students earning at least $1,000 a month in their Forex trading accounts and be on their way to $100 PIPs and beyond in year two.
So, what can our students expect as they are taught the Market Maker course employing the SMP trading software?
Certainly, we WealthSmart traders will, no doubt at first, go through a period of adjustment and uncomfortableness. It’s sort of like putting on a new high collar dress shirt and shiny new shoes. Initially, the collar might cause a little neck irritation and the shoes might feel a bit stiff to the feet; but, in time, these sartorial changes can ‘make you look like a million dollars.’ With the changeover to SMP, I believe it will not ‘make you look like a million dollars’ … but … perhaps … ‘make you a million dollars.’
What else? Certainly SMP offers more trading choices. As a major advocate of WealthSmart’s moment in momentum trading, I want to assure everyone that you can do precision moment in momentum trading with SMP, and, if you choose, you can extend your trades because SMP helps you see the Market Maker’s price targets and you may decide to go along for the ride. Taking SMP trading one step further, you can even decide to go beyond intra-day trading and do inter-day swing trading if that suits you. More choices, that’s a good thing.
Finally, as I see it, two really big game changers. First, with the SMP software, we now have a map with which to see each Market Maker business cycle play out. Many retail traders, by placing entry orders, provide the Market Makers with a map of where their entries, stops and profit-limits are located. We now get to turn the table on the Market Makers and to some degree get to see their entries, stops and profit-limits. This is a game changer.
The second game changer, as I see it, gives us the ability to speed up our learning curve. How? WealthSmart did not allow hindsight or historical studies of the charts because its indicators are signals that change size, color, shape and location. SMP does allow hindsight, that is, historical studies of the charts because it uses locations to provide information on Market Maker actions. Locations on a map don’t change.
I say … WOW! If we choose, we can do some homework called ‘back testing (looking left).’ We can invoke ‘hindsight is 20/20’ and look back at prior Market Maker business cycles of accumulation, manipulation and profit release using SMP’s location tools (boxes, dots, average price, best price, liquidity lines, grid lines). We can learn to read Market Maker maps that will help us find the gold.
So, let’s see … more choices in our trading, a map to help us navigate the Market Maker landscape, and the ability to personally speed up our learning process. The ‘long and short of it’ is clear—the school’s getting better at what we teach so that our students get better at trading. This is a win-win outcome.
The value of patience and discipline in Forex trading cannot be overstated. In order to be a successful trader, you must possess these two traits with unwavering consistency. As I have gone through various phases of learning, failure, and success over the past 17 months, I have had moments and weeks where I have been extremely patient and disciplined. However, maintaining that unwavering consistency has been one of the biggest challenges in my trading.
Lately, for a little over a month now, I have finally started to exhibit some reasonable level of self control. I realize I have not yet absolutely mastered these essential survival skills. Even during the past month, I experienced back to back days where I allowed myself to over-trade (the only two truly bad trading days I have experienced since mid-May). As such, I am constantly seeking new thoughts and inspirations for how and why to maintain steadfast patience and discipline. I believe I am starting to turn the corner. I find that I am no longer easy prey for the market. I now lie in wait and take quick small bites out of the market.
So, what has been working? What is helping me maintain my patience and discipline? I go through a routine before each trading session. The first thing I do is look at the lot ladder. I must warn you, without the right mindset, this can be a double-edged sword. The lot ladder allows you enter the number of pips you expect to average per day (along with some other variables) and then see how much money you will be making each week if you climb the lot ladder one rung at a time. The reason this is so dangerous is that you can make the mistake of raising your daily pip goal so that you can make huge money so much faster. This is completely counter-productive as it leads to over-trading, not covering profits, etc.
However, I have set my daily pip goal at the Fx365 Institute’s long-time suggestion of just 7 pips a day. Once you have been trading on the Smart Money Profile platform for some time, you know this is truly a modest goal. Before any trading session, I look at where this highly obtainable goal can take me. Here is a screen shot of what one part of my lot ladder looks like:
I take a few moments to really focus on the truth that averaging just 7 pips day turns a $1,000 account into a $20,000 a month income in a ridiculously short time frame. I mean, this is incredibly powerful stuff. It helps me cover smaller trades rather than trying to swing for the fences. I still need to get better at not caring if the trade runs another 30, 50, 100+ pips. It’s tough knowing that I could have made my whole week on one trade, or hearing that someone else pulled a 40 when I had better entry and only pulled a 10 or 20. However, I come back and look at the lot ladder again and realize I only need 2-4 of my modest winners a week. I have to always remember, trading is a long-term race. By taking those smaller positives, I avoid taking negatives that make it harder to reach my goal. Then, at the end of the week when I have made my goal and am moving up the lot ladder again, I am one week closer to the financial freedom that $20,000 a month brings. Isn’t that the whole idea?
My other monumental struggle has been to avoid over-trading after taking a negative. Now, although I am making significant progress towards trading at indifference, there are still times when I take a negative trade and literally feel the stress prickling through my body (what a horrible feeling). When this happens, I absolutely must exhibit tremendous discipline and STOP TRADING until I have calmed down. If I look at where I want to be by the end of 2015, I ABSOLUTELY CANNOT ALLOW MYSELF TO DAMAGE MY ACCOUNT.
At those crucial moments, I lean on something Fx365i’s Head Trader Wade Guth once told me. He asked if I was planning to trade tomorrow. I said yes. He asked if I was planning to trade next week. I said yes. Next month, next year, etc? Yes, yes, and yes. So he asked me, “Why on earth would you get worked up about one trade or one negative day?” I also reflect on Shane Guth recently telling me that the biggest thing he NEVER wants to do is let one bad day cause him to lose his buying power. Live to fight another day!
Over this past month, I have also started telling my wife how my trading went each and every day. She has believed in me and allowed me to stay on this journey despite several months without positive results. Believe me, it is not easy to tell her when I am down for the day. However, when I have taken a couple of wrong trades and walked away with relatively small losses, I can proudly tell her I kept my discipline and didn’t throw money out the window like an idiot. Knowing I will have to report to my wife on a daily basis helps me maintain steadfast discipline and patience in my trading.
One last thing I think about is basically a lesson from Rhonda Byrne’s famous book, The Secret.” The Secret teaches that if we want something, we have to hold it in our mind’s eye, believe we have already obtained it, and be fully grateful for having received it from the universe. So yes, I am thankful for my huge trading account. More importantly, I am thankful for being a highly successful trader with tremendous patience and discipline. I know I did not get to this point by getting emotional and overreacting at every unexpected twist and turn in the market. I am thankful for the self control and confidence that made me the trader I am today.
I realize the lot ladder may not help everyone. Of course everybody is not married or willing to discuss their daily results with their significant other. I also know that not everyone has the same view of The Secret as I do. That is not the point. What is important is that I have found ways (and will continue to seek and find new ways) to exhibit patience and discipline in my trading. If you are struggling with patience and/or discipline in your trading, maybe you can use one of my tools. Some of you will have to come up with something totally new that works for you. The key is to find something that truly resonates with you – something powerful enough to give you the internal fortitude to do the right thing in the face of strong negative emotion. Once you find ways to be patient and disciplined, you will be much more likely to survive in the unforgiving Forex jungle.
Two quick notes:
1) One other thing that has helped is writing this blog. Thank you so much to everyone who reads it and especially to those of you who reach out to discuss your own trading experiences with me. Thank you, thank you, thank you!
2) In regards to the 7 pips, you may be saying, “Well what about the commission?” On my personal spreadsheet, I subtract 1.5 pips from each trade to come up with what I call “net pips.” This number will vary depending on the pair you trade and whether you are in a micro account. I can help you figure out the exact number if you need help with this.
As always, please feel free to reach out to me at firstname.lastname@example.org. I LOVE hearing from fellow traders!
Smart Money Profile Trader
It is often said that financial markets, Forex included, are driven by the opposing forces of GREED and FEAR. This seems to be universally accepted, and the natural inclination is to approach trading in these terms when managing profit and risk.
I accept the greed/fear paradigm as an operating assumption, but at the same time do not feel personally bound to these being the prominent drivers in my own trading experience. Both fear and greed signal that something is wrong, and danger either from forces external or self-generated. They are negative lower-frequency states of being, and qualities I don’t wish to cultivate in my life. I’ve decided not make an exception for trading.
While writing this post, I highlighted the word “Greed” for this dictionary definition: “Intense and selfish desire for something, especially wealth, power, or food”. I don’t really relate much to the concept.
Trading does not feel any more greedy than previous work and endeavors to support myself and my family. Yes, there’s potential as a professional trader to garner impressive income for very few hours of work. But I resonate with something Jim Carey said when questioned about whether he felt guilty about the level of wealth and success he’d achieved, to which he replied “I’ve worked hard for a long time, and I’m a carbon-based life-form, so why not me?” And I say also… “Why not me?”
I believe my motivations behind trading actions that result in generating profits actually fit more suitably under the umbrella of APPRECIATION. I appreciate every time I recognize price action providing a low-risk/high probability trading opportunities. And I deeply appreciate in a broader sense discovering this accessible and achievable path to financial freedom and independence. And the many positive ways observing and participating with the Forex can be applied beyond trading to the rest of my life.
So much for Greed… What about Fear? Now that is certainly something I can more easily relate to. I can cite many times in my life where my own fear only magnified the negative results. At the same time, I can also identify hazards, some with lethal potential, that I currently negotiate with a calm and steady attention on a daily basis.
When I drive on the freeways, although aware of possible unexpected dangers, I do not drive in fear. The same can be said for the times I command sharp objects and fire preparing meals and high-powered puncturing, maiming, and severing tools for my various home improvements.
In trading, I’m protected from consequences which I cannot afford by employing focused awareness, discipline and self-imposed guidelines. Basing my actions on a healthy RESPECT of the market with all its financially devastating potential actually replaces what might otherwise be the emotion of fear.
No matter how the greater forces of greed and fear manipulate the moods and movements of market price actions, I know I’ll perform best when I’m feeling unafraid, grateful and productive. To thrive in the long haul I must approach the Forex in aligned consistency with my best self, in the same way I build and develop other important relationships in my life.
To that end, having a structure supported by the cornerstones of APPRECIATION and RESPECT gives me the sense that I’m on a firm and secure foundation to build something vital, fulfilling, and enduring.
Editor’s Note: This is the second installment of WealthSmart instructor Ira Barnes’ two part series on how to identify a high quality Forex education. Click here to read the first segment which discusses the map and action steps required to embark on a successful Forex trading journey.
Okay, ingredient three—technical skill and tool knowledge. Let’s start by remembering, and admitting, that most of us have not been students in a long time. And, additionally, as adult students, we must confront the reality that we’re real people with real lives meaning that there are a lot of people and circumstances making demands on our time. Bottom line, we have no time or money to waste, period. Therefore, our education better be to the point, efficient, and on target without any side trips or dead ends.
So, what’s needed, day by day, to keep us on point, focused, in the zone? JIT (just in time) training. This means that you only want to be taught what you need to know to be a successful, winning and high income professional Forex currency trader—no filler, no fluff. Show me how to use a car’s steering wheel, gas and brake pedals, side and rear view mirrors and let me drive. I don’t need to lift the hood and rebuild the engine and transmission just to go over to a friend’s house.
In Forex trading, just show me how to consistently capture my 35-40 PIPs a week by way of recognizing high probability trade setups and entries. Teach me smart risk management and how to ‘nail the entry’—avoiding jumping trades too early or chasing trades too late. That’s it—KISS (keep it simple students) with JIT teaching in a Forex world awash in JIC (just in case) teaching where you can get lost and never be seen again because of non-essential, even irrelevant material thrown your way. It’s quality, not quantity that counts.
Finally, the fourth and most important ingredient—community … within which you develop your mindset (vs skill-set and tool-set), mental discipline, delayed gratification and trading with indifference winning habits. Importantly, this all comes under the umbrella of emotional intelligence and equates to about 90% of a full and complete Forex education.
In a nutshell, learning to trade, alone, is a colossal and costly mistake. Only hearing your own voice as you go through the first few turbulent months of your trading career can only end one way: disastrously.
You must be a part of a community; you must have other voices (teachers, mentors, fellow students) to remind and reassure you that you’re normal as you experience trading ups and downs, periods of euphoria followed by depression. Yes, you will most likely spend some time ‘all over the map’ as you progress on your trading journey. Again, I repeat, we all need the comfort of community—whether online or on campus.
Well, there you have it, the winning four-part Forex formula. Oh, by the way, before I became a student, then trader and instructor, I spent nearly six months looking everywhere for such a Forex student environment. It turns out that I found only one such place where all four ingredients came together. For emphasis, the four ingredients are 1) the trader’s map (COG); 2) the QuickStart program; 3) JIT training; 4) community. Oh, and the place—the Forex365 Institute.
A winning Forex education means you’re one of the 5% of regular everyday people trading the Forex who consistently make money, grow your account value and regularly see your PIP trading value go up. The remaining 95%, simply put, fail as professional Forex currency traders.
Well, it seems to me, if you’re going to be successful trading the Forex, you’d better start off on the right foot. For starters, being self-taught is probably a mistake; looking for a Forex software product that prints money (get rich quick scheme, anybody?) is a non-starter; and, loading up on seminar books and DVDs may not cover all the bases, either.
The winning Forex education formula has four ingredients—1) a plan (map or blueprint) that takes you from first step novice student to the final destination as a professional Forex currency trader; 2) action steps that you start taking right now, from day one; 3) very precise and focused technical knowledge of charts and indicators giving you the know how to see and act on high probability trade setups and entries; 4) finally, and most importantly, a community of like-minded Forex traders (students, teachers, mentors) where you can develop, grow and master your trading discipline (emotional intelligence).
Let’s talk about each of these four areas of a complete and total Forex education. One at a time:
First, you want to confidently know where you’re going as a new student; you want to clearly see your final destination as a professional Forex currency trader; and, you want to be aware of every step (educational milestone) along the way. Sounds like a plan to me.
Now, let’s make each step, from first to last, visible so that they can be easily followed. Hey, that’s a map. Well, in the entire world of Forex instruction, I know of exactly one and only one such map. It tracks your technical skill and tool (charts/indicators) development day by day, week by week, month by month. It’s a trader’s map known as the trader’s COG (center of gravity).
Furthermore, this unique map not only tracks your skill-set and tool-set learning curve, it MOST IMPORTANTLY tracks your mindset development. You’ll know ahead of time that there will be emotional highs and lows, periods of euphoria and depression that you, the Forex student, will have to navigate through as your journey continues. Finally, and wonderfully, this special map contains many signposts along the way reminding you that ‘you’re normal’, that with persistence and determination you will get through the obstacles, road blocks and cul-de-sacs on your way to becoming a successful and winning professional Forex currency trader.
The second ingredient leading to a winning Forex education is a set of immediate, start now, let’s get going action steps. At the beginning we’re all eager to start trading. Yes, let’s trade … but … wait a minute … remember that 95% fail … remember the importance of getting started on the right foot. *
So, your first action steps are necessarily foundation setting, good habit setting steps, NOT YET TRADING STEPS. You will be guided, step by step, detail by detail, on setting up your practice and then, later, real money accounts, preparing and sizing your charts and indicators so that you can best see the movement of the market. These and other preliminary action steps are 100% essential. The good news is that all these first steps go quickly thanks to a program that takes into account that you’re eager to trade, yet, you must get it right from day one. This program is called QuickStart.
(Editor’s Note: Stay tuned later this week for the 3rd and 4th steps in Ira’s winning Forex formula.)
* Footnote (literally): a lesson from John Wooden, college basketball’s greatest coach, ever. His first practice session on day one of every basketball season was to instruct his student athletes on the correct way to put on their socks to avoid blisters.