It’s that time of year again! Gyms will be over-run with temporarily zealous fit freaks, and life-changing resolutions are declared around the world. With the New Year upon us, it is, in my opinion, important to cast some direction and intention over the year ahead, as well as use the natural tide of change that rises upon humanity this time of year to our favor. Having said that, whether you are a new student with the fx365i, or one of our more seasoned students who wants to write a new chapter in their own history book this year, there are a handful of thoughts that I have had reflecting on the first 7 months of my trading career.
As the great Jim Rohn famously said, “any two years you can change your life forever. 18-20, 30-32, 68-70… Any two years.” To go along with these words he added, “for things to change, you have to change [and] for things to get better, you have to get better.”
I start with that thought because each of us arrived at the fx365institute with the belief that every successful entrepreneur has…
-a better future than their present
-has the absolute power to make it so
And with that, here are 7 things that will help you reach your goals:
Before you start on your journey, take the time to have a clear and defined written explanation as to why you have chosen to take the time and energy to learn to successfully trade the forex. Of course the obvious answer is to make money, but the reason why is what is going to pull you through the frustrating times you will have. The stronger and clearer this reason is, the easier it will be to work through your inevitable shortcomings as a trader and remain solution oriented rather than obstacle focused.
#2) Do not measure your progress in pips.
The immediate trading cliché that didn’t take me long to realize is that in Forex trading “You either win or learn.” As much as I would’ve liked to be a trading prodigy and had an alarming win rate from the beginning, the reality is that I learned almost nothing from a winning trade. At no point that I can remember did I take a positive trade and dissect my own screen shot to figure out where I went wrong. You can practice bad behavior and in the short term you can be up, however the market will expose your mistakes, and it’s ok. Instead measure yourself by the activities you are doing. Study the Virtual Classroom, read the Forex book, engage daily in fxlive, take and archive your screen shots, your trading journal, learn what all of the basic signals are on your charts, and measure your progress off of how well you are doing those things.
#3) Have a realistic expectation for how long this is going to take
One of the immediate shortcomings that I had was that I felt like I had uncovered Pandora ’s Box when I learned about the way that the market works and how we trade alongside the market makers. This caused me to believe this would insulate me from losing and that I would be well on my way right up the lot ladder fast. Here’s what I would tell myself now. Look at the lot ladder, get excited about the lot ladder. It’s real, and it’s not out of reach…however, before you get to start up it, you have to learn how to trade, so give yourself time. Cutty told me in our first conversation that he anticipated taking a year to learn to trade and a year to build up his trading account, which I promptly dismissed because admittedly, I’m young and overconfident. Turns out, from where I sit now, that’s not a bad business plan. Can it be done faster? Of course, but let’s get serious, there’s a reason Jim Rohn says, ‘any two years can change your life.’
#4) Be a good student.
#5) You will probably ask yourself all of these questions…
#6) Play to Win
There is a saying that says ‘if you mess up once it’s a mistake, if you mess up the same thing a second time, it’s a decision.’
While it’s likely in your trading you will make the same mistake more than once, make the commitment to yourself to understand the mistakes your making, take a pro-active approach to each step of your trading. Analyze, discuss, review, try again and dig in… Anything that can deliver the leverage and exponential returns the way that successfully trading the forex can is going to be a challenge, and of course is going to be worth it.
#7) Have Faith
‘The difference between belief and faith’
Years ago there were two friends. One day one of the friends decided he wanted to do something exciting, so he took up tight rope walking. After practicing for months and months walking carefully back and forth on a line strung feet above the ground, he began to feel the urge to accomplish something spectacular. He began to craft an exhibition where he would walk a stretched cable between two rooftops, high enough that if he fell it would result in death. To make his feat all the more impressive, he decided that he would not only walk the tight rope, but he would push a wheelbarrow across it with him.
He practiced and practiced while his friend watched on, impressed with his determination and relentlessness. After perfecting the stunt over and over again and arranging for the big day and exhibition, the time had finally come.
The two friends stood atop the skyscraper eyeing the cable stretched tight between the rooftops. Time seemed to stand still. The sound of chatter amongst the crowd standing below, although constant, faded away to the ears of the two men.
In the final moment as the tight rope walker draped his feet over the cable and steadied his grip on the wheelbarrow handles, the friend was faced with the choice of belief, or faith. His belief led him to have the utmost confidence that his friend would complete the exhibition, but it was his faith, that caused him to get in the wheelbarrow.
In closing, have faith in the journey, the frustrations you will face, the institute, and yourself. Have fun, and in a few years when you are living your ‘Why’, look back on this time as a distinct moment where you went for it 100%…
Well it’s 2016, and another year has gone by. New Years resolutions have begun, gym memberships are sky rocketing and everyone is motivated to become more fit, drop a bad habit, pick-up a new hobby, or set new budgets. Although I have never been convinced that the dawn of a new year gives you any advantage of actually accomplishing any goal, what I do believe is that by writing out your goal on paper and establishing a date, will give you a much better chance of completing it.
One thing I have looked at for myself in the past couple years is a specific Money Management philosophy in my trading. At the end of each year, I take stock of how well (or horribly) I have traded for the year and make sure that my strategy is sound and still valid. This is an exercise I wish I learned my first day trading because it would have not only made me more money, but it would have substantially mitigated a good percent of my total losses in my first year. So what I am going to share with you now is a very simple philosophy I follow that has helped my trading massively.
The difference between a new trader and a professional trader is this: A new trader thinks about how much money they can make, while a Professional Trader thinks about how much money they can lose. Do you see the difference? The moral of this story is that trading is risky, and although it is fun to think about all of the money you could potentially make, most new traders seldom like to think about the fact that one bad day of trading can cut their account in half, or how a misunderstanding in risk reward ratio can lead to taking far greater losses than positive gains. The market doesn’t care about how much money I have, what I lose or what I win. The market itself is pure and emotionless, but is driven by the emotions and beliefs of the people who participate in it.
This allows me to have a clear advantage over most traders if I can follow these simple rules while trading:
(I will explain these concepts now)
This is very simple math and this will keep you from not only having a really bad day trading, but also helps prevent you from biting off more than you can chew. It answers a very simple question of what lot size should I be trading? Here is an Example:
If I have an account balance of $1,000, then 5% of that is $50. So, if I am trading a lot size equating to $1, then a -50 pip stop out would reduce my account by 5%. This means that the most I am ever willing to lose on any one trade is 5% of my total account. Now I am not advocating take a -50, but you get the idea. The dollar figure and lots size is proportional to your account balance.
This is the mark of a professional trader and for me, this was a huge milestone in my personal trading. In order to understand what my risk and profit target is getting in to a trade I needed to really understand how the market works. When I can comprehend what I am looking at on my screen and I can say to myself (or anyone else) “this is good entry because….. and as a result of this I will know this trade is behaving when it does X and I will know it’s time to dump it if it does X,” then I am on my way to making some money in FOREX. This is how you make money. There is no luck involved. It comes down to being able to identify a trade set up and being able to pull the trigger. In actuality, this is the easy part. Let’s talk about where things really get hard…
If I am trading from a place of indifference all the time, why would I ever need to run a stop-loss? The answer is that we are a human beings and no matter how emotionally stable we think we are there will come a day where the market spins you out and makes you feel like you know NOTHING about trading. Any long time traders know this to be true, no one is immune from taking losses. The mark of a true professional is how clever we can be, and gracefully we can lose (I’ll cover this in the next section). To protect ourselves from ourselves, we need to preset a stop-loss when going into any trade that is automatically set the moment I click in. It is there to serve as a safety net to ensure that my emotions will not get the best of me in the event that things go wrong, which they will.
As I mentioned above when explaining the importance of a stop-loss, the next logical question is “what should my stop-loss be.” For me I use a 1:2 risk reward ratio. I will explain how this works. If my target PIP goal is 50 pips, then my stop should be set to -25. This way if I am making smart trades and my win Ratio is 50%, then I am profitable in my account. I’ll give you this analogy: If you flip a coin, you have a 50/50 chance of calling it correctly. Simple right? Trading should be no different and here is why: If I am only winning 50% of the time but I make 50 pips every time I am correct and lose on half that (-25) when I am wrong, then over a long period of time I am going to remain profitable in my account. This is what I meant when I was referring to losing cleverly and gracefully. Obviously, I don’t advocate blindly trading your account but I love the simplicity of this because you can become a profitable trader with a 50% win rate! Awesome.
An experienced trader trusts their methodology. If any strategy is going to be successful, you need to give it enough time to work. In the first year for me, it was all about gaining experience and trying not to lose money in my account. Every year after that has not become about how much money I can make, but about how little I am going to lose. My experience has shown me that the more I can depend on high probability averages (like a 50% win/loss rate on my trade) and trust them to be true, the more confident I become in the methodology. When a trader combines a sound methodology with experience, and solid foundation in Money Management and risk mitigation, then you are well on your way to becoming a Professional Currency trader.
Director of Enrollment
One of the rules I have for entering a trade is, “I understand the set up for the trade that I am about to enter.” Despite this rule, I realize that I have never taken the time to actually write down exactly what those trade set-ups and entries look like on the SMP platform. Wow, that’s pretty shocking. How have I not done this yet? I should be doing this on an ongoing basis. So that settles it: my mission over the coming days and weeks is to specifically write, diagram, and (hopefully!) screen-shot successful trades that exemplify exactly what I’m looking for in trades. My hope and belief is that as I write out more and more of these set-ups, I will recognize them better when I see them, I will stay OUT of trades that don’t fit the criteria, my approach towards each of the trades will be refined, and my overall trading will improve dramatically. Today I am just going to start with one very simple trade.
Disclaimer: This blog only represents my opinion. Although my opinions are based on what I have learned at Fx365i, none of this necessarily represents the official views of the institute.
Bounce Off Average Price:
Well, “Bounce off Average Price” is the first trade I have mapped out like this. Hopefully there will be several more to come over the coming weeks. As always, all traders’ thoughts and comments are tremendously appreciated. Please feel free to contact me at email@example.com – I’d love to hear from you.
Smart Money Profile Trader
In time, the four hour work week can be a reality for professional Forex currency traders, especially Forex365 Institute graduates.
Yes, the Forex365 Institute’s Market Maker Course supports a PIP business owner’s goal of capturing 50+ PIPs a week—a number that will allow strong and steady trading account growth and the rise of your PIP value to $100 and beyond.
Imagine, whether you’re an employee or a business owner, reducing your weekly work hours from forty to sixty or more, down to fifteen (as a Forex365 Institute student), and then down to four (as a seasoned, veteran professional Forex currency trading Forex365 Institute graduate).
The four hour work week concept is simple—exclusively trade high news where we normally expect the most price action volatility and movement. With smart (emotionally intelligent), high probability trades using the full complement of Smart Money Profile tools (the Market Maker Course software package), capturing 50+ PIPs a week is exceedingly doable for all disciplined, responsible and determined (never day die—failure is not an option) students.
In the image above, my five-minute chart shows an example of high news trading. In this case, it was on Wednesday, August 19, 2015 at 11:00 am PST—Federal Reserve FOMC meeting/minutes release.
I did five trades over the course of about two and a half hours. The first three trades were shorts and the last two trades were long. A quick summary of the five trades follows:
The trading consisted of five trades for a total of 113 PIPs in a two and a half hour time frame. To me, this is the ultimate in PIP business ownership as a professional Forex currency trader. I still have a ways to go to do this consistently, but I’m on my way. The good news is that this is available to all my fellow instructors and students at the Forex365 Institute.
Having goals in life and in trading improves your chances of success by creating direction, motivation and focus. However, goals can be ineffective or even hurtful if made carelessly. We students all have the “goal” to be financially free. I would venture to say that most people want to be free but because each of us has made it our “goal”, we joined FX365I. Our goal gave us the mandate (direction) to find some way to gain more income than we currently do. Because of the possibilities that financial freedom can bring (travel, less stress, security, etc.) we are motivated to invest time and energy. Again, most people probably want financial freedom but if it’s not a goal they let the cares of life distract them; they lose focus and end up making no progress.
But can goals be ineffective or even worse, hurtful? Let’s take a hypothetical example of the average Joe who wants to get in shape. He begins by lifting dumbbells every day. After a while he looks in the mirror and isn’t happy with the results. So he adds some push-ups and sit-ups to his routine. A while later, he looks in the mirror and again is not happy. So he joins a gym and goes there when he can. Finally when he doesn’t see the results he was hoping for, he gives up. You can see that his goal of getting in shape was an ineffective goal. This experience could discourage him from ever trying to get in shape again.
Let’s take a look at the acronym SMART for some help.
Here are my goals for the next 3 weeks: 1) only trade if I have measured and believe that the “bus stop” is logical. 2) Make less than 10 trades a week 3) only enter a trade if I know my risk out. Are these smart goals?
Specific? – Very.
Measurable? – check.
Attainable? – Definitely.
Realistic? – If I’m disciplined.
Timely? – 3 weeks.
These 3 goals are based on advice from fellow students and instructors that I believe will help me achieve my goal of becoming a master trader.
In my next post I will share how I’ve used goals (and a more important aspect of goals) to achieve success in my life and how I have used the same system to improve my trading.
Fx 365i Student