Category: Trading Strategy

People tend to get started in day trading with false expectations.  Any education provider for trading that is honest, will address the fact that taking losses in trading is not only possible, even likely, it is to be expected.  As we discuss at the Fx365 Institute, the game isn’t to learn how not to take losses, but to simply keep your losses small and win more often.

At an intellectual level, this is very easy to comprehend.  When you step into the boxing ring however, it is an entirely different story.  A famous boxer once said, ‘everyone has a plan until you get punched in the face.’

With all of the aforementioned context, it never ceases to amaze me just how rattled I can get from taking a loss.  Although taking a loss is a normal part of the business of trading, it is not uncommon for students to develop an expectation that they can become the exception to the rule and take few to no losses.

This is a dangerous trap to fall into because it is entirely unlikely, in fact nearly impossible.

A better idea is to have a conscious and established framework of what action steps to take after a loss.

Step 1 –  Walk away!  In some of the early ‘Market Makers Business Model’ videos, Wade suggests not taking another trade for AT LEAST a half an hour.  Although you may miss out occasionally on a good setup, developing this behavior will help you avoid poor emotional decision making processes, revenge trading, and additional unnecessary losses.

Step 2 – Evaluate your position size.  If you immediately place another trade with the same lot size as the previous trade, this next trade will expose your account to more risk than the last.  It is counter intuitive to scale back your position size, but it WILL keep you in the game to trade another day.

Step 3 – Get real with why you took a loss.  Did you place a trade because you were bored, or greedy?  Or did you take a trade at a high probability entry point and it just didn’t play out in your favor?  If you can be honest with yourself, you can avoid unnecessary pain via further poor decision making.

Step 4 – Win the next trade.  Winning Futbol Coach Arsene Wenger has a philosophy about losing.  “The most important thing after suffering a loss is to win the next match.”

Sounds self evident, but in reality, 90% of the time losing on a trade is a result of poor judgement.  Thus, by having patience, following your trading plan, and trading a highly likely setup, you CAN win the next trade.  This is what you need to do to stay confident, and by following rules 1-3, you increase your chances of this tremendously.

Until next time, stay thirsty fellow pippers.

If you understand how the Spot-Market works, by now you have somewhat of an understanding that each time you place a sell order or buy order, there has to be someone taking the other side of that position.

Follow me down this rabbit hole.  We all know at this point that beyond technical analysis, trading is largely emotional.

The real question is, when you are trading, what are you thinking and feeling?

Does opening a trade in real money cause you anxiety?

Do you have a hard time sticking to your original trading plan once your trade is open?

Do you have doubts about your ability to trade profitably?

If you had a $50,000 dollar windfall would you be willing to trade that money for profit?

Now, if your answers look something like, ‘I’m nervous, yes, yes, yes, no…’ Then this exercise if for YOU!

Lets take the other side of everyone of those negative thoughts.  Lets not only attack these intellectually, but as you do so, take some time to meditatively contemplate the new feelings that having a change of mental framework would cause.

If you are anxious when you are in a trade, ask yourself the question, ‘what would it feel like to have total and complete peace in each trade I take, regardless of the outcome?’

If you have anxiety when you open a trade in real money, ask yourself the question, ‘what would it be like if I could have a position open at a $100 pip and feel totally calm?’

If you have a hard time sticking to your original trading plan, ask yourself, ‘what would it be like to have total confidence in my trading plan, regardless of price fluctuation, until I am given definite information that tells me otherwise?’

If you doubt your ability to trade profitably, ask yourself, ‘What would it be like to KNOW that I always keep an account in the black?’

If you wouldn’t trade a big sum of money for lack of confidence, ask yourself, ‘What would it be like to trade the big account confidently, knowing that I will consistently profit?’

Now the goal, and challenge is to learn to exist in and approach your trading from the same state that taking the other side of your thoughts creates in you.  THAT feeling of peace, excitement and confidence is the only way that a profitable trader should be approaching the market.

As Napolean Hill said so famously, ‘whatever the mind can think, it can achieve.’

Lets all strive to tackle the emotional side of this business with more vigor and tenacity and climb the lot ladder!

Hey Folks,

We’re back at it and better than ever.  In the last series of riveting blog’s, we investigated some tried and trued principles that every patron of lasting success can surely agree on.

So now a little bit of context as to what applying your time, effort and the rules of success to FOREX trading can mean for you.

Times are a little ‘out there’ right now to say the least.  Near bubble heights in housing.  Massive and increasing National Debt.  Over-extended economic stimulus from the FED.  A wild west-esque presidential election.

While nobody knows exactly what is to come as a result of the aforementioned, it is probably safe to assume that some type of economic volatility is likely in our future.

In the world of dollar cost average long term retirement investing, this is scary.  In the Job market, this is scary.  In the housing market, it can mean massive debt and a nation upside down in their home loans, this is scary.

In the world of FOREX, you have spent months, maybe years learning what to do with volatility.  Volatility in fact, is what we look for.  This can be your time to shine.

A perfect example of this happened to me this week.  I entered a trade based on some standard criteria that we have used and discussed at the Fx365 Institute for years.  My overall risk in the trade, ie my determined point of exit would have resulted in a 2.5% loss.  A 1 to 1 risk to reward would’ve been acceptable.  The trade started to move in my direction faster and farther than I anticipated.  I covered the trade very conservatively for a 13% gain on my account.  I wasn’t the only Fx365i trader that was in this trade, and we weren’t trading together which tells you something.

Because of what we have been learning, I was able to make judgements during the trade based off of what price-action was doing that allowed me the opportunity to have strong profit.

More future volatility means that you will continue to work at your success just as you have, but you will reap an even larger reward for being in the right place at the right time.

Until next time, Happy Pipping.

  Show up, consistently, with a good attitude, for a long enough period of time, with faith and a burning desire, be willing to pay the price and operate with integrity.

  If you have been reading along with me the last month as we have been discussing the idea of success, a mantra addressing it, and some laws regarding your achievement of it, then today we will be rounding third base and running for home plate.

Hopefully, the ideas we’ve been discussing, although they are simple to do, and just as simple not to do, have made their way into your conscious and unconscious mind and are starting to gain momentum in application.

To bring it in, today we’ll cover the last law.

‘Be willing to pay the price.’

This is ultimately the barrier of entry into the path of achievement.

To become a successful physician it takes a decade + of schooling, years of residency, and many more years of practicing medicine and building a practice.  To become a successful lawyer is again a similar path.

Building your skill set as a professional trader can deliver profits comparable and even bigger than the aforementioned, and because of this, it is not unthinkable that it too will take significant sacrifice.

Each individuals journey is different.  For some, it will involve going to great lengths to understand a methodology and develop a set of indicators like Smart Money Profile Software in order to be able to gain the edge in the market.  For others, it will mean waking in the middle of the night to drive 100 miles round trip to put in the time at Fx365i.

This 6th and final post regarding success is not to tell you what the ‘price to pay’ will be for you, but instead, to remind you that to win big, there will be one that needs paying.  When challenge inevitably occurs, remember this and set yourself up for victory by having the required attitude to endure.

As you learn the skills, and inch closer to your goal, remember to enjoy the process, give thanks for the good that surrounds you, and look forward to better days to come.

To your Success!

Visit www.forex365institute.com for more.

Faith.  What does faith mean to you?  For some its a novelty.  Others, a wishful state of thinking, and yet others, something to be found through warship.

How does this pertain to your success you ask?

As our success mantra reads, one must combine all of these practices we have discussed thus far.  Consistency, Attitude, Integrity, Long-Term Action…  And on top of this, one must do so with Faith and a Burning desire.

Burning desire is less difficult to imagine.  As a child, it is likely that at some point we fancied something we wanted so badly.  A bicycle perhaps, new clothes, a barbie, and because of the burning desire to obtain said thing, we begged, convinced, even worked at whatever we could, (think lemonade stands and lawn mowing,) to get this object that we so badly craved.

THAT level of desire is the level of desire that must be adopted in the pursuit of your success trading.  If trading is just another means of cultivating a little bit of money for you, it is likely that the challenge of it will throw you off course and you will find an easier means to do so.

If truly having a skill set that allows you to use your computer and internet from anywhere in the world to effectively evaluate the FOREX market and place trades for profit can facilitate a dream of yours, then you will likely maintain the burning desire necessary to persevere.

So what about Faith?  Many have belief in a place where they need faith.

In short,

‘a man had a friend who was a gifted tight rope walker, and this gifted walker wanted to pull off a courageous stunt.  He decided to tight rope without a tether between two very tall buildings.  To make his stunt all the more difficult, he decided that he would also push a wheelbarrow on the tightrope from building to building.  The man practiced and practiced until he was ready to attempt his stunt and his big day came.  Just before he got ready to go, his friend and supporter displayed the biggest act of faith he could.  You see, for the friend to have belief would be for him to be there rooting his friend on, confident of his friends ability to cross the tight rope without falling.  Instead, he chose faith, and jumped in the wheelbarrow as a passenger.’

What is the metaphorical wheelbarrow for you in your trading journey, and if you haven’t reached that level yet, what can you do to inch closer?

For more, visit www.forex365institute.com