Have you asked yourself yet, ‘what is a PIP anyway and why should I care?’
Great question! A pip is an increment of measurement in the FOREX market. It stands for ‘point in percentage’ and depending on what currency pair you are trading, typically is 1/100th of a penny.
This is important to you for 2 reasons. The first layer of importance lies within the Fx365i methodology that we teach at the institute. And the second, is eventually going to be important to your bank account.
First of all, the ‘Market Makers’ (mainly the big banking institutions), follow a repeated pattern of business in the market. They accumulate the market to soak up liquidity (retail trader’s money), then they manipulate the market to knock said retail traders out of their positions (often times the majority of retail traders are correct in their market speculation, but not before the market swiftly moves against them to take them out of their position,) before ultimately taking the market where they need it to go to profit heavily. This is all measurable in PIPs, which is good news for us because knowing some of the measurements these guys use, we can increase the affectivity of our speculation dramatically so that we can trade for profit.
The second reason that this is important, is because by knowing how the market reacts at certain prices, based off of repeated measurements, we can have a specific place of entry for our trades. This increases probability, and more importantly, allows us to more effectively manage risk. If you buy a currency low, and it moves upwards in pips, you can sell the position you are holding and however many pips make up the difference between where you bought and sold, or sold and bought again (trading short,) are now yours to keep. Simple enough right? Even better, the market moves 100’s of pips ALL THE TIME…yes, like every day!
Oorah you might be saying to yourself. But wait! It gets better.
Pips are pips, and if you learn the skill set of capturing pips consistently, you can literally write your own income. How you ask? Not by capturing more and more of them, but by assigning a higher and higher dollar amount to them.
This is the magic of FOREX. Once you learn how to safely capture PIPS, you can give yourself a 50% raise overnight. You can do that over and over again. Imagine walking into your boss right now and saying, ‘I am going to produce the same amount that I currently do, I am going to work the same amount of hours I always have, and I want you to pay me 50% more!’ Now imagine doing that again next month, and then the month after that, in perpetuity.
No job I’ve ever had works like that, which is one of the many reasons it might be worth your time to learn how to safely and effectively trade the FOREX for profit with us!!!
Until next time, live happy and pursue your passion.
Here is this morning’s recap!
What is passive trading?
When most people hear the word passive, they think of something that can be negative. For me, having a passive attitude in trading has been a really positive thing. Some of my best trading days and weeks have been during times when I have a passive attitude in how I enter trades. To better describe this, my thought going into a trading session with a passive attitude is “I might enter a trade, and I might not.” Some of the worst trading days for me are when I wake up thinking “Boy, I can’t wait to get into a trade and pull some pips!”
What I have found is quite fascinating, it is almost as if I take power away from the market, and the Market Makers when I trade passively. Truthfully, that is exactly what happens when you trade more passively and less emotionally. The market makers make their money by fooling retail traders into entering positions, so the more emotionally you trade, the more you become a puppet on a string. The more passively you trade, the less power and control they have over you. It’s a beautiful thing!
After I talked to Steve, and read his blog post, I started to see the bigger picture, and I started to understand what was going on with my trading. At this same time, there was a period of a couple of weeks where I was really busy. I had to travel to California for work, I had a busy schedule each day, and I was starting work at 6AM, so there was really no way for me to trade during session. I almost tried to, I even brought my laptop with me. But I decided that I would take the week off. I was pretty busy the following week also, so I went almost 2 weeks without trading. This turned out to be a really good thing for me.
Taking time off from trading, accompanied with new ideas and a fresh mindset really helped me to turn things around. Does this mean that I’m pulling hundreds of pips a week? Nope. In fact I think that I’m at 18 pips for the week so far, but I’m ok with that. Slow and steady wins the race. The tortoise wins, every time.
I had always heard Rob G. say that whenever he loses two trades in a row, he takes the rest of the week off (I’m pretty sure he said that). I always thought “Why would he take the rest of the week off? Can’t he just start fresh the next day?” I think I’ve learned a good lesson here. Time off can be a powerful thing. If you find yourself spun out in your trading, take a few days or a week off. I’d bet that you come back with a new perspective. Taking a few steps back is a great way to get a better view of whats really happening.
My recent trades
Since this transition I have been doing much better. Once again, I’m not rich, nor am I slaying hundreds of pips but I’m in control and my trading is relaxed. This is such a stark contrast to the cortisol-fueled, greedy, upset, hunched over, anxious, money losing trader that I was a few weeks ago, “gargoyled” over my laptop, hoping and wishing that the market makers would let me have just one little piece of profit. Recently my trading has been much more enjoyable. I am managing my account by keeping a reasonable lot size. I am calm. I sleep in until 5:30 if I want to. I realize that I don’t have to trade. I no longer have to fight myself and make up all sorts of rules because I see the big picture.
My intention in saying all of this is not to boast or sound like I have it all figured out, but to just point out that we often make things a lot harder than they need to be. Sometimes all it takes is a slight change in attitude, or a simple shift in how we view trading to turn things around. I had taken something fun and made it stressful by focusing in the wrong things in my trading, then adding rules and more stress to correct it. That all went away (for now) when I started focusing on taking things slow and keeping things simple.
I encourage anyone who is having a hard time to remember that you have plenty of time to learn to trade (that’s another thing Steve said). Take it easy. It can be challenging but it should also be fun. If you find yourself stressed out, chill. Take a break. (Side note: taking a break helped me a lot, but I think that it is important to note that it wouldn’t have been such a powerful time if it wasn’t for the fact that I got some good advice). With that being said, ask someone for help! Get some advice. Participate and ask questions on the webinar. Read books. Use all of the tools at your disposal. Don’t be greedy. Keep the dangers of the market in perspective. Keep it simple and relaxed. The reason we learn to trade is to take stress out of life, not to add it.
Okay, okay, I know, I’ve heard it too – all the modern pseudo pop-psychology of ‘The Power of Positive Thought’, ‘Attitude is Everything’, the ‘Law of Attraction’, etc. Aren’t we all getting just a little bit tired of all the clichés? I mean, it can’t all be true, can it?
Well what if it is? All of it. And what if it’s the one thing that is keeping you from where you want to be; maybe in your trading, personal small business, career, personal finance – you name it.
As it turns out, more winning athletes, entrepreneurs, political figures, and other notorious characters that I can shake a stick at, have at one time or another referenced their mindset as a key attribute in the success that they have accomplished.
If all of these people who have at least financially achieved a status that most of us would aspire to reach, were to openly suggest that this may be a key part of their success, why oh why, must we roll our eyes at the idea of doing such a thing ourselves?
I read that Muhammed Ali once said, “It’s the repetition of affirmations that leads to belief. And once that belief becomes a deep conviction, things begin to happen.”
Admittedly, I’ve always had mixed feelings about affirmations. Part of me felt like there was obvious truth to it, and the other part of me felt that it was redundant and dishonest.
However, I trained in a gym with high level athletes for years. During that time, even though I personally had a fairly high level of fitness, I had generally plateaued. Now it’s not what you are thinking, one of these stories where I was actually reading Vogue on the treadmill and texting on the weight bench and calling it hard work. No, this was something else. One day I thought about the type of (affirmation) dialogue I was having with myself repeatedly: “This is going to suck’”, “Ahh this workout is so gnarly”, “I’m about to get wrecked”.
There wasn’t much positivity in my dialogue. In February of 2015 I decided that I had to change the voices in my head (fun, huh?). I decided then and there that the outcome of every workout was going to be deemed awesome no matter what. Anytime I was going to do, or was doing, a very large effort in the gym, I repeated to myself, “this is going to be so good”, “I’m about to gain so much fitness”, “I love working out”.
So what happened? In the next 6 months I PR’d every movement we focused on in the gym. Seriously—all of them! Max pull-ups, deadlift, bench press, pushups, 2K row, bw in calories for time, 10min air-dyne test. Was there a correlation? Undeniably so.
So what does my fitness have to do with your trading you ask? Well, once you’ve been around the FOREX market for a while, the price action of the market itself is relatively simple. It either goes up, or down, and always for good reason. So why is it that some people interact so well with it and get rich, and others can’t seem to figure out up from down and blow up their accounts?
If you saying things like, “I got into this trade, so of course it went the other way”, “I suck at this”, “You’re such an idiot”, “This whole thing is a hoax”, “Is this ever going to be viable?”, “I’m not very good at this”… well you are, as Muhammed Ali would say, one of those people who are repeatedly affirming their thoughts into a belief, which is ultimately becoming a deep conviction and will inevitably happen.
Let me ask you this, how long would you hang out with somebody that was telling you all of those things? Not very long, I would hope. So instead, try this on for size.
‘I’m becoming a world class trader.’ ‘I’m getting it more and more every day.’ ‘I’m a great learner.’ ‘My account is starting to grow exponentially.’ ‘Trading is the hottest thing since sliced bread.’
Now of course, saying all of the right things probably won’t do much for you if you are already doing the right things like showing up consistently with a great attitude, continuously studying your fx365i virtual classroom, keeping accurate and thorough records of every trade you make, taking screenshots of your own trades and reviewing them weekly. However, if you aren’t doing all of those things, this might be the missing link.
Lastly, what is it that you are visualizing? How often are you imagining what it’s going to feel like to open up your trading station and have a six-figure account balance? How often are you imagining what your perfect trade setup would look like, and what it would be like to be in that trade? How often are you visualizing what it’s going to be like to close out a trade for five figures in profit? How often are you visualizing what your monthly account draw from your trading account to your bank account is going to look like?
If you are thinking, wow that sounds like a lot to do, I ask you this: How much thought do you think Muhammed Ali gave boxing? And if that’s not enough motivation for you, remember, Michael Jordan didn’t make his high school basketball team.
So my last blog entry was about the need to make a plan——So I revisited the “lot ladder” and really looked at how I am going to “make money” at this business. If you don’t have the excel spread sheet—THE LOT LADDER– I highly recommend you ask your enrollment counselor to create one for you. This is the business plan—the “way” to see how over time you will create a monthly income. It makes the unknowable and the undoable—knowable and doable. Well at least on paper. Now this plan will not execute itself. It is up to me to make this happen. This “way” is not magical or a pipe dream. This “way” entails an investment of time, an acquisition of real skills and most importantly a realistic outlook. I know what it took for me to make what I make at my current job—the time invested in learning and making mistakes and making more mistakes and I have to be prepared to do the same.
The LOT LADDER provides me an end result I can aspire to. I know that each of us has a different set of “life situations” so the ladder might take longer than mapped out, but at least I will know that it will be up to me to do the work. If life says “distraction over here Andrew” or “better opportunity over here Andrew”, then I know it’s not that “the plan” isn’t working out…I am not working the plan!!! The great aspect about owning your own business (and I have owned my own my entire life) is that I get to call the shots. I get to focus when I choose to focus and I have the power to make as much money as I want only when I want to invest my time and life energy.
Next up- time to build my skills…….till next time….