Category Archives: Forex Trading Psychology

Naked Price Action Forex Trading psychology

How To Deal With Losing Steaks and Draw-downs In Forex Trading Pt.1

stressful

I don’t believe that there isn’t any doubt that if your psyche or mindset isn’t right with regards to how you deal with losing Forex trades or even being caught in a draw-down it can and most likely will wreak havoc (and in some case) devastate your Forex account and could lead to the demise of your Forex Trading career.

Most of the 95% losing Forex Traders go about trading wrongly. They enter the area, the shark infested waters, unknowing as potential shark bait. They are lured into the waters with glitter and glamour of hitting the proverbial jackpot of unlimited riches and nothing could be further from the truth.  I wrote about this in my last article “Can I turn my Forex Trading Around in 30 Days?

shark bait

News flash, don’t you realize that YOU are out there in the Forex market (trying to) compete with the largest, most well funded businesses in the world (Banks and Forex Market Makers)? The cards are stacked up against you, before you even hit the buy/sell button. These guys hire the best, smartest, most well trained individuals that live, drink, eat, sleep, and breathe Forex trading and you think your week or two of Forex trading is going to allow you to beat them consistently? Hello! That’s why 95% of Retail Traders are in the sad state of affairs or classification of being labelled “Losing Traders”.

However, I am here to tell you that you don’t have to be in the “Losing Trader’s Club”. One of the most simplest things you can do is learn to let go of negative feelings of losing trade. Probably the best way of doing so is when you are in the back-testing phase of any trading strategy. In fact, if you’re going to make mistakes, and make losing trades what a better place than a Forex trading simulator? Now of course you should as much as you humanely possible can be trading in the Forex Simulator as though would be trading live. No you’re not going to have the excitement and rush that you have when your live money is at risk on the table. However, you can trade (with back-testing) in a manner that is consistent or will be consistent with your trading style. Doing so religiously will even help you achieve better results. What I am basically trying to say is that when you’re back-testing take it seriously. There is no need to develop bad habits while back-testing because as soon as you begin testing your system or strategy live or demo you can be sure those back-testing numbers are going to plummet 10% or more. That’s the reality and you need to understand and prepare for that reality.

negative emotions

Secondly, you need to let go of the negative feelings of losing any given trade and here’s how you do it. First, don’t have any vested interest in any one given trade in the first place. Sounds simple, I know, right? Wrong. Most Forex Traders make this mistake from the onset when trading. They have some invested interest, that “This is the trade!”. This is the one. It has to win. It’s going to hit my target. When you go into trading Forex with that mindset, you’re already going in with a losing mentality. If you’re not able to walk away from your trade(s) after placing them. Something is wrong from the start. You’ve put too much at risk. You’re not confident in your trading system. You’re not confident in your analysis. You’re not confident in your trading abilities. Don’t you know that it take other people to see what you see and AGREE with you in order for the market to move in your direction. No single person has any control on making the Forex market move in any direction, no matter how much you stare and look at those candles. So understanding this, the best thing we can do is not to have any vested interested in any trade from the beginning. Then, and only then will it be easy for you to let or release any negative feelings on a losing trade. In fact, (here’s my philosophy regarding trading): “Some will, some won’t, so what!” Some will (win), Some won’t (win), So what! NEXT. You see you’ve got to get through the losing trades to get to the winning trades.

Forex trading is a numbers game. Pure and simple. Sure you’ve got to first show up equipped to participate. Most (Traders) show up ill-equipped and ill-prepared before the first shot is even fired. What are your numbers? What is your ExpectancyWhat is your R? What is the win/loss rate for your trading system? If you don’t know, then why in the world are you even trading? Do you even have a Trading plan developed that covers these issues? I suspect that most LOSING Forex Traders don’t know their numbers and of course don’t even have a Forex Trading Plan in place, let alone back-testing their system to see even if it’s safe to enter the Shark infested waters.

There is a thing in Forex called a win/loss probability. So it goes without saying that you’re gonna win some, you’re gonna lose some somewhere down the line so you’d better learn to deal with it or stop trading and again the easiest way to develop this mindset is to (1) learn to make your mistakes in back-testing. (2) learn to first and foremost don’t have any vested interested in any one given trade and (3) learn to let go of any negative feelings you might have about any one given trade. (4) Learn from your mistakes and the mistakes of other traders i.e. Get yourself a Forex Mentor, Teacher or Coach.

Arm yourself both educationally and mentally before you’re eaten up by the Sharks.  Stay tune for part 2, which I give you concrete solutions to dealing with losing streaks and draw-downs.

Here’s hoping you have a magnificent day on PURPOSE!

Can you turn my Forex trading around in 30 days?

Hello Traders

I get this question ALL the time, in fact I see this question being asked a lot to the “Forex Gurus”: “Can I turn my Forex trading around in 30 days?”

Now some people will say (the Naysayers) I am crazy, or even unethical by answering the question with astounding YES. But suffice it to say, my answer is YES you can turn your Forex Trading around in 30 days or less. Listen, you didn’t get in the position of not being an unsuccessful or non-profitable Forex Trader overnight, but YOU can “Turn Your Forex Trading Around in 30 Days or Less!” GUARANTEED.   Here’s the catch, you only need to do 3 things.

The first thing you need to do is recognize that there is a problem. Sounds simple right? Just ask an Alcoholic if they have a drinking problem or a Gambler if they have a gambling problem. You’ll most likely get an initial response of “No”. Until you realize and accept the fact you may have a problem as a Forex Trader (and it’s most likely) you can’t trade successfully, you’re a losing Trader, you’re a break-even Trader, YOU can’t and don’t make consistent profits, then hey YOU got a problem. Now I know I’m gonna get a lot of negative feedback from that one statement, but if the shoe fits wear it. Here’s my position, and I’m firm on it, If you have made consistent PROFITS trading Forex, trading your system (whatever it is) for at least 6 months and I mean AFTER taking YOUR trading system through the back-testing wringer in the form of:

  • Back-testing your system or catalyst and tripling the account.
  • Taking a demo account and tripling the account.
  • Take a small live account and tripling account.

If you haven’t done the above 3 things with your system(s) then I suggest that you stop trading live and move back to back-testing.

I want to make this very clear. I can’t tell you how many traders try to learn to trade a strategy and within 2 weeks (or less) they quit. Hello!! News flash, don’t you realize that YOU are out there in the Forex market (trying to) compete with the largest, most well funded businesses in the world (Banks and Forex Market Makers)? The cards are stacked up against you, before you even hit the buy/sell button. These guys hire the best, smartest, most well trained individuals that live, drink, eat, sleep, and breathe Forex trading and you think your week or two of Forex trading is going to allow you to beat them consistently? Hello! That’s why 95% of Retail Traders are in the sad state of affairs or classification of being labelled “Losing Traders”. You don’t need someone (a Forex Mentor) who will take you literally by the hand and guide you through the land mines set by these Banks and Market Makers). Without a Forex Mentor, you’re literally a shark bait in invested shark water and the said thing is you’re like the Alcoholic or Gambler who has a problem and hasn’t the guts or the intestinal fortitude to realize YOU’VE got a problem.

Solution (step one):

  • Acknowledge that you have a Forex trading problem.
  • Find a Forex Mentor.
  • Stop live trading IMMEDIATELY. (Don’t worry the Forex market will still be here, and I assure you, you won’t be missed in the sea of almost 5 Trillion Dollar a day business).

Solution (step two)

The 2nd piece of the puzzle in turning your Forex trading around is (in my expert opinion) is one simple thing and that is risk management. Without proper risk management you are doomed before you even get out the starting block. Now you can trade anyway you wish too, it’s your money, but I myself use one simple method and I use it consistently every single time for ALL of my trades. What is this one thing? It is risking only 2% on each trade. Period. Now there are some exceptions to my rule (and I discuss this in my Online Forex Trading Courses) but suffice it to say. My recommendation to my students is the 2% rule. It’s that simple. Now for some there are variations to this. Other teachers teach the 2% rule in this manner. Let’s say you have a $5,000 Forex account. 2% of $5,000 would be a $100 risk on each trade. Now say you had 2 losers this would mean your $5,000 Forex account would be reduced to $4,800. Now instead of risking $96, the other Teachers teach you to stay with the $100 on ALL trades. There is a method to this madness. Again an issue that is far beyond this article, but no matter which method you subscribe to, using the 2% rule across the board will keep your head above water in times of draw-downs. If you use the 2% rule it will keep you from being in the 95% losing Traders group. So I invite you to join the 2 Percenters!

Take a look at my video on: “How To Go From A Losing Forex Trader to Making Profits (almost overnight)!”

Solution (step three)

Learn The Power Of Compounding Profits

There is gold in those hills! When you understand the power of compounding your Forex Profits your whole attitude, demeanor and way of trading will change. You will no longer be a Hunter, but will become one who Lays Trap. Understanding this one concept will bring clarity to your deepest goals and dreams. Albert Einstein said that, “The strongest force in the Universe is Compound interest.” Now Mr. Einstein also went on further by explaining that using compounded interest can and does act as a double edge sword i.e. it can both help and hurt you. You only need to be an unsuccessful Forex trader to experience the magnitude of losing trades and/or blowing up trading accounts to understand that point.

I want to show you the power of compounding interest. Historically, I’ve taken a look at one of my Forex portfolios which over the last 4 months has an average of 18.8% profit per month. Using that figure of 18.8% to calculate an expected rate of return on a $5,000 investment over a period of 34 months will become $1,472,016.05.


(Obviously it is important to understand historical profits or losses are not indicative of future results, but this makes a strong case and provides a strong point of reference to illustrate the power of compounding profits.)

That is the power of compounded interest. Yes, you don’t have to tell me that I’m not going to make 18.8% profit every single month. We both know that. However, if you notice my AVERAGE calculation was based on 5 months of historical data that was AVERAGED out evenly to 18.8% per month. The point here is to have patience (which most Traders don’t have). Let your profits compound and reap the rewards after the course of 3-4 years. If you’re following my 2% rule (you’ll be in the game a very long time) and be able to benefit from the fruits of your labor. Of course, you’re going to have to implement my recommended steps (above) 1-3 to do this.

So you asked me: “Can I turn my Forex trading around in 30 days?” You bet YOU can. The question now is “Are you WILLING to do what’s necessary to turn YOUR Forex trading around in 30 days?”

If so, you know what you have to do! I don’t know if my Forex Mentor Program is a fit for you or not, but I do know this, I’ve been helping Forex Traders make a lot of money, become successful/consistent profitable Traders as well. I also know you do owe it to yourself to at least take a look.  I only have a few spots left with people whom I can personally work with.  Once those spots are gone, they are gone.  I hope to see you on the OTHER SIDE!

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How Do You Judge The Success Of Your Forex Trades?

This week after achieving 1, 242 pips off of 3 trades
I was hit with a barrage of emails and comments stating
that pips aren’t a good way to judge the success of a
trade (I may agree or disagree, read on to find out
why).

What-do-you-think

So I thought I would open up a survey and ask you:
How do you judge the success of your trades?

It’s 1 question and it takes less than 30 seconds
to give your opinion. Chime in and let me know.
I will write an official response to this question once
I have received a substantial amount of responses from
the survey.

Take the survey

Have a magnificent day on PURPOSE!

 

http://app.getresponse.com/survey.html?u=BWyKo&survey_id=427602