July 2015

“I don’t really need to do screenshots. Trading is for smart people. Because I am smart, I will become good at trading soon enough. It takes time to send in screenshots – time where I could be in the market looking for another trade.  I view turning in screenshots as a waste of time. Besides I know what I did right or wrong in the trade. I don’t really need someone else telling me (and everyone else) what I did wrong.  I don’t really need to spend 15 hours a week on the webinar because I pretty much get everything right now. Thanks for the software and indicators. They are pretty cool. Peace out.”

Signed….a card carrying member of the 95% club

 

The sentiments above represent the mindset of someone who will join 95% of the masses and lose money as a FOREX trader. Renowned Stanford psychology professor Carol Dweck describes such thinkers as people with a “fixed mindset.” They believe talent is inherent: you either have it or you don’t. They believe hard work is for people who aren’t talented.  Individuals with a fixed mindset always have the excuse, “If I really tried, I could do it… but really trying is a sign of weakness.” Also, because hard work takes them out of their comfort zone, they’ll stop trying at the first sign of an obstacle. People with a fixed mindset are hyper-sensitive to criticism because in their minds they are rarely wrong.  They also don’t like seeing others succeed because that only exposes their inadequacies. The reason people with fixed mindsets think the way they do is because their desire to look successful is greater than their desire to actually be successful.

The imaginary letter writer above wouldn’t be able to stand sending in his negative trades. He wouldn’t want anyone to know that he failed at something and then couldn’t bear the thought of actually being criticized in public. It is simply too much for his ego to handle. Because his image is the most important thing, he will give some credit to others but only if he can maintain an air of “coolness” while doing so. Eventually, he will give up on FOREX trading because he can’t stand the losing.

We see this frequently in the sports world. A kid will grow up with athletic skills superior to his peers. He wins at everything. People start calling him the next LeBron because he has never had to work to win, he develops a sense that he should win simply by showing up. He graduates high school (barely) and signs with a big time college program.  At this point, everyone expects to see him in the Rose Bowl, the Final Four, or the World Series. Then… he is never heard from again. Why? Because he meets other athletes just as talented as he is but with a different mindset … a mindset that propels them to higher levels. Below is a quick synopsis of the Fixed vs. Growth mindsets from Dweck’s book entitled, “Mindset” (you can click on the image for a larger view). In the next blog we’ll take a look at the Growth mindset and how it affects trading.

 

-Todd Carson

tcarson34@yahoo.com

Two Mindsets Diagram[/vc_column_text][/vc_column][/vc_row]

At the FX365 Institute, we are taught to “trade with indifference.” By trading at indifference, we prevent emotions and unnecessary worrying from influencing our decision making process. Indifference can be accomplished by having a solid trading strategy (good entry, two exits). Have you ever taken three excellent entries in a row and had all three go against you? I have. However, this doesn’t discourage me. I know that if I trust the process taught by the institute, I will become financially free – even if I have losing trades from time to time.

Sports psychologist Ken Ravizza teaches athletes to eliminate unnecessary stresses, or in essence, “Play with indifference.” Ken emphasizes that his pupils must control the controllable rather than spending precious emotional energy worrying about things they can’t control. In baseball, a hitter can’t control:

  • What pitch is thrown
  • Whether the umpire calls a ball or a strike
  • The field condition
  • The crowd jeers
  • The opponents’ taunts

However, hitters can control two things: their preparation and how they choose to respond to each situation that is out of their control. As a hitter, I use the following solid strategy shared by many successful players. With no strikes, I’m looking for a specific pitch that I can drive to the gap or hit out of the park. With one strike, I’m looking for something I can hit hard. Although a curveball at the knees is a strike, I can’t hit it hard, so I won’t swing. Once there are two strikes against me, I’m looking to hit anything that is close to the plate so I don’t get out called on strike three.   That is how I practice. That is how I prepare.

Here is a scenario: with the winning run on second, I’m at the plate with my hitting plan. As I step into the batters box for the first pitch,  I’m looking for a pitch on the inside part of the plate that I can drive deep in the left field gap to win the game.  However, the first pitch is a fast ball on the outside part of the plate. I take the pitch (i.e. don’t swing) for strike one. With one strike, I’m now looking for any pitch I can hit hard. The pitcher throws me a curve ball that is out of the strike zone.  However, the umpire calls a strike. Now the count is 0-2. I’m looking to hit anything close to the plate because I don’t want to give the pitcher an easy strike out. The 0-2 pitch appears to be an inch off the plate and I hit a ground ball to the second baseman. He throws me out, and we lose the game. Of course I will be upset that we lose the game. However I can be satisfied with my at-bat because I know if I execute that strategy every time I’m in that situation, I will win more than my share of games.  I know I won’t be able to win every game, but I will win enough to be successful. It is an emotionally intelligent response to not get discouraged after that at-bat.

What if the umpire had called the second pitch a ball (umpires will not make that mistake most times)? I would have taken the third pitch because it was off the plate. The chances I’m going to get a pitch I can hit hard and win the game go way up. True, that is not what happened. But those pitches are like my three good entries in trading. If I see those entries again, I will take them because I believe in my strategy. If I’m in that game situation again, I’m going to take the same approach… for the same reason. I have a proven successful strategy. Worrying about things I can’t control just throws me off my game, makes me lose focus, and keeps me from peak performance.

In trading, have faith in your preparation and don’t stress out when your trade goes against you. Trust the process.

 

Todd Carson

tcarson34@yahoo.com[/vc_column_text][/vc_column][/vc_row]

The SMP (Market Maker course) trading program allows us to use 20-20 hindsight.  That is, the charts don’t change over time as the WealthSmart (Moment in Momentum course) charts did.  I say, “wow!”, because this is big deal;  this really does allow us to use 20-20 hindsight to speed up our learning and earning curves.  Let’s do it guided by the 20-20 words, below:

 

1,2—HOME WORK

Yes, there will be some after trading session work to do.  Spend a few hours a week (weekday evenings or on the weekend) reviewing the charts.  You’ll see setups and entries that you missed during the live trading sessions.

 

3,4—LEARNING CURVE

You are responsible for the pace at which your personal learning curve moves ahead.  I suggest that you not only review charts by yourself, but show and share interesting charts (setups and entries) with your fellow students and instructors.  With the Smart Money Profile program you’re looking at and interpreting market maker content maps (paths to the PIPs).  The more the better to speed up your learning curve.

 

5,6—LOOK LEFT

Oh, by the way, don’t limit yourself to today’s charts and then tomorrow’s ‘today’s charts.’  Look left—scroll your charts to the left to last week’s and last month’s charts.  It’s all good—more market maker content, more setups and entries to identify, more maps to practice reading.

 

7,8—BACK TEST

This process of looking left, using history to advance your learning curve pace is known as back testing.  There’s a wealth of information back there thanks to unchanging charts (20-20 hindsight).

 

9,10—RIGHT EDGE

Now, to best look left and back test I suggest that you make the experience as ‘realtime realistic’ as possible.  You do this by emulating video replay of the price action … 5-minute candle by 5-minute candle and do the same with each 15-minute and 1-hour candle.

 

How?  Put your ‘current candle’ on the right edge (so that you cannot see the future) of your chart  and use the right and left arrows on your keyboard to move into the future or back, again, to replay.  Use your ‘stop action’ to explain what you see developing on the charts.  Talk about speeding up your learning curve, this is it.

 

11,12—QUICKER, FASTER

Next, let’s look at the earning curve part of all this.  It seems to me that we’re looking at simple and straight forward cause and effect happening here.  Speeding up your learning curve means seeing more trade setups and entries sooner rather than later in your student experience.  What follows directly will be distinguishing high quality setups and entries from those that are not so.  You’ll get better, sooner, at reading and interpreting market maker content maps.  Next, more winning trades and less losing trades—this is the cause.  The effect—quicker to the lot ladder and faster up the lot ladder.

 

13,14—LOT LADDER

Yes, the lot ladder—the business spreadsheet that explicitly shows why we only need to capture a modest number (30-40-50 PIPs) of PIPs per week.  Let the lot ladder, by way of reinvesting your profits, do the heavy lifting.  This is the power of account compounding (similar to compounding interest that Albert Einstein called the eighth wonder of the world).  The numbers grow slowly at first, but then take off.

 

15,16—ACCOUNT COMPOUNDING

The direct result is, in not a very long time, dramatic account growth.  Again, straight forward cause and effect.

 

17,18—PIP VALUE

The consequence to this quicker and faster move up the lot ladder by way of your account balance growth is your all important PIP value growth.  This is the ‘biggy’ in your career as a professional Forex  currency trader.  I’ll say it again and I’ll never tire of saying this, it’s not the quantity of PIPs captured, it’s the quality of PIPs captured by way of high probability winning trades as the result of accurate market maker content map reading (identifying high probability setups and entries).

In time (which you can speed up) you’ll arrive at the number one destination found on all of the market maker maps—the $100 and bigger PIP value.

 

19,20—EARNING CURVE

Do as I’ve suggested, above, and I expect all of our earning curves will eventually go straight providing to each of us the earning power to live the good life.

 

Ira Barnes

Fx365i Instructor

ira.barnes@fx365i.com

From John Maxwell’s “Sometimes you win, sometimes you lose LEARN

The title of this book invites us to change our mindset. The saying, “Sometimes you win, sometimes you lose” implies that winning is the only way we benefit from competition, conflict or adversity. Losing conjures up feelings of failure, inadequacy and pain. But, as Ben Franklin said, “Those things that hurt, instruct.”

As I began trading at Fx365i, I was encouraged by the institute to view each day – regardless of how many pips I gained or lost – as good day. “Every day we gain either pips or experience” was the mantra. The idea was simple: I could leave my trading session feeling good about being right in my trades – or feeling good that I learned something when I had been wrong about my trades. However, when compared to the mindset I had when I entered into my Forex education, adopting a new “I feel good either way” mindset was much easier said than done.

Fellow student Brian (aka “Cutty”) made a statement that helped me to change my mindset. He said, “Whenever the market acts differently than I expect it to, and therefore I lose pips, I say to myself, ‘Interesting’.” Rather than cursing the market makers or getting down on himself for his mistake he has disciplined his mind to look for an opportunity to learn and grow as a trader.

Consider the difference that a positive mindset can make.  Example A: “That’s interesting that the market was in convergence and the pressures were all in criteria. I took a trade up against trend break and it still went against me. Maybe I can’t count on being right 100% of the time, but 70% of the time will still free me financially.” Conclusion: I have to be OK with taking small losses. Contrast that outlook with Example B: “The market was in convergence and the pressures were all in criteria. I took a trade up against trend break and it still went against me… I can’t trust these dumb indicators… The market makers are thieves… This stuff doesn’t work!!!!” Conclusion: I should just give up now and cut my losses.

Changing my mindset allows me to tolerate and alleviate the pain associated with being a student of the Forex market. This skill is transferable. I am a better coach for acquiring this skill. Losing is part of the profession, but I tolerate the pain of losing much better now (as opposed to sulking) because my mind immediately asks the question, “What can I learn from this?”

The highest reward for our toil is not what we get for it but what we become by it. … Mistakes are not failures. They are proof that we are making an effort. When we understand that, we can more easily move out of our comfort zone, try something new, and improve. … Improvement demands a commitment to grow long after the mood in which it was made has passed.” —John Maxwell

 

-Todd Carson

tcarson34@yahoo.com

(Editor’s Note: For those who may not be familiar, WealthSmart was Fx365i’s original Forex training platform for the first few years of its existence.  In October, 2014, following two years of development, the institute released a beta version of a new platform called Smart Money Profile (SMP).  Due to the unprecedented levels of success that the majority of SMP students experienced, Fx365i began exclusively teaching with SMP in July, 2015.)

WealthSmart asks traders to wait for direction and momentum and then trade.  Wait for a bus to come flying through the intersection at 90 miles an hour and jump on and get your PIPs.  Who cares about the intersection street names; and, who cares about where the bus came from and where it’s going.  Just as long as it can’t easily make a U-turn or a sharp right turn, climb on board that bus and capture your PIPs and get off.   Where you get off, what street you’re on, who cares … you’ve got your PIPs, done, end of subject.  The trouble is that you don’t always know what kind of neighborhood you’re in.  There might have been a roadblock barrier just beyond the intersection that the bus blew through.  There might have been a big old sinkhole there.

Smart Money Profile—now the Market Maker course—asks traders to know not only what direction the market’s moving, but also, WHY is it moving in that direction?  THEN, AND ONLY THEN, should you trade!

Why is ‘why’ so important?  Because it tells you where the Market Makers are going and the destination.  You choose whether or not to go along for the ride and pick up your PIPs.  So, pull out your Market Maker content map and survey the landscape.  Generally, to protect yourself and your PIPs, decline rides in accumulation areas; always be ready to jump on board a profit release journey; and, selectively pick manipulation rides.

The long and the short of it is that by using your Market Maker map, you’ll more self assuredly and confidently capture more PIPs and higher probability PIPs because you’ll know what neighborhood you’re in.

In real estate and in Forex trading, using the Market Maker course, it’s ‘location, location, location.’  So, get your map out and learn how to use it; that is, REALLY learn how to use it.  After all, it’s the map to the gold.

Finally, be sure to wave to the vast majority of mapless Forex traders who are struggling and bumbling as you pass them by.

 

-Ira Barnes

Fx365i Instructor

ira.barnes@fx365i.com