Why you need to become a “Master” of your trading strategy

Why you need to become a “Master” of your trading strategy

I know that this might seem obvious, but you really need to “Master” your trading strategy before you try trading it on a live account. Why am I saying this if it seems so obvious you ask? It’s simple, from my interactions with traders every day, I know for a fact that far too many of them are diving into live-account trading without any real clue as to what their trading strategy is or how to trade it. Many traders “think” or “feel” like they know what their trading strategy is and how to trade it, but the truth is that most beginning and struggling traders have not truly “mastered” their trading strategy yet.

Ask yourself these two questions: Do I know my trading strategy inside and out? Am I at the point where I can flick through the charts in 5 or 10 minutes and instantly know if there’s a setup worth trading or not? If you can’t answer an honest “yes” to both of these questions then you aren’t ready to trade live and you have not mastered your trading strategy yet.

I talk about trading like a sniper in many of my articles. Whether it’s what crocodiles can teach you about trading or how totrade from a coffee shop in a minimalistic manner; the underlying point is basically the same; trading in a relaxed and scaled-back manner is best. But, HOW do you arrive at that point of trading in a relaxed and confident manner? You have to first become a master of your trading strategy, and then you will have the ability to quickly scan the markets and make a confident decision to trade or not to trade. If you aren’t doing that, then you are probably sitting there for hours mulling over your charts until you eventually convince yourself of a trade signal that later you realized was not really worth trading at all. If this sounds familiar then read on, I’m going to tell you how to fix it…

Creating FOCUS

Most traders struggle with focus, and it’s not surprising really. How can you easily focus when there are so many different trading methods, economic news events and other market variables bombarding you every day?

With all the different trading systems and strategies out there, how can you really know if what you’re doing is “right” or if it will work if you can’t focus on it enough? Well, the answer to that question is that you can’t. You can’t know if any strategy or system will work until you try it, and the key is that you have to try it over a large enough series of trades to see it play out.

MOST traders struggle with sticking to one trading method long enough to see it play out. Why? It’s because they try to tackle too much at one time; they try to trade with 10 different forex indicators or they try to trade 30 different markets at once with 5 different entry triggers. The truth is, the entry trigger is the easiest part of trading, and it’s also the part that traders over-complicate the most.

How do you create the focus that you need to really MASTER your trading strategy? It’s actually pretty simple; you break your trading strategy down into smaller pieces; you un-complicate it. This is actually the “key” to mastering anything in life, whether it’s reading a book, studying for a test or getting through your work day; if you break things down into smaller pieces, you will be able to focus more on each piece, rather than trying to do too much at one time. This, in turn, will help you achieve the larger end-goal faster and more effectively than if you try to do too much at once with no plan of action.

How to MASTER one price action setup at a time

Let’s get into the “meat” of the process of mastering one price action setup at a time. Before we begin, it is worth noting that when I say “one setup” I don’t mean “only” a pin bar or only some other price action bar…a price action strategy or “setup” consists not only of the bar but of the surrounding market conditions and events as well.

For example, in the charts below, we are going to look at mastering the daily chart pin bar setup from key chart levels of horizontal support and resistance. Thus, you don’t trade unless there’s an obvious daily chart pin bar setup formed at or rejecting a key level of horizontal support or resistance. Let’s look at some examples now:

In the example chart below, we can see 4 different examples of trades that would fit our criteria of trading only daily chart pin bars from key levels of support or resistance. These would be the ONLY types of setups you would be looking for until you feel you mastered them:

In the example chart below, we can see a good example of a pin bar on the daily chart of the USDJPY that formed rejecting a key horizontal support level through 79.20. It’s worth noting that this pin bar actually kicked off the huge up trend in the USDJPY that is still underway:

In the example chart below, we are looking at more examples of daily chart pin bars that formed at or near key levels of horizontal support or resistance:

One important thing to take note of with trading a strategy that involves finding key levels like this; you have to wait until a key level actually forms…don’t guess. I wrote an article about how to draw support and resistance that will help you to distinguish key levels from less significant / minor market levels. This is why in the USDCHF example (the last one above); I didn’t mark that first pin bar from support that formed on January 2^nd as an example of our trade setup that we are mastering. At the time that pin formed that level was not really established yet, so it wasn’t a “key level” and thus it didn’t meet the criteria of the “one setup” that we are focusing on.

To make this exercise of mastering one setup at a time work, you really have to obey the rules that you’ve outlined for the particular setup you are trying to master. In this case, our main “rules” would be this:

1) Identify the obvious / key chart levels on the daily chart

2) Look for obvious pin bar reversal setups that have formed at or near those levels. Meaning, pin bars that are showing rejection of the level and (or) are creating a false-break of them.

Now, keep in mind that even with such a simple set of rules, with price action there is always discretion involved….you have to decide if a pin bar is “obvious” and if a level is “key”…but these things are easy to get better at through training, time and practice. I’ve already linked you guys to some good articles on these topics within this lesson, so you should understand what I’m talking about here.

In closing…

Professional traders do not sit in front of their charts wondering what to do. They know what to do already; they are just waiting for the right combinations of events to come together to give them a reason to trade. Knowing what these are events are, exactly what they look like and how to trade them is something you can easily accomplish by following the template laid out in today’s lesson. You first decide on what your entry trigger is, in our case it was the daily chart pin bar, and then you decide how to trade it. There are many different combinations of price action setups and factors of confluence that you can learn to master. Eventually, all of these setups that you’ve mastered will begin to “paint a picture” of the market for you and you will begin to have clarity and confidence whenever you look at a market’s price action.

If you don’t think and act like a pro trader then you will never become one, so start becoming a “master” price action trader by learning one particular setup at a time. Get it down on demo first, then try trading it live, and if you find after a couple months that you are making consistent money with it, then you can consider adding another setup. Your aim should be to have a handful of setups that you have an “intimate” knowledge of; that you are a “master” of. At that point, trading simply becomes a game of waiting patiently for the price action setups that you have mastered to show themselves in the market. It really can be as simple as that.

If you want to learn more about the price action setups that I have personally mastered, checkout my price action trading course.

Please Leave Your Comments Below & Click The Like/Share Buttons 

Related Articles:

• Master One Forex Trading Strategy at a Time
• How To Filter Good & Bad Price Action Trading Signals
• How To Start Profiting With Price Action Trading Strategies

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February Special Promotion: This month I’m offering a Special Discount on Lifetime Membership to my Forex Courses, Live Trade Setups Forum, Daily Trade Setups Newsletter, Email support line & more. For more information Click Here.

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About The Author: Nial Fuller is considered a leading ‘Authority’ on Price Action Forex trading. If you want to learn more about harnessing the power and simplicity of Price Action Trading Strategies please visit Nial Fuller’s Forex Trading Course & Traders Community Page Here. Nial’s Students get lifetime access to all of his advanced price action Forex Courses, video lessons, webinar tutorials, daily trade setups newsletter, live trade setups discussion forum, traders support line & free ongoing course updates. For more info, visit the Price Action Course page.

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Copyright 2013 – Learn To Trade The Market – Author Nial Fuller

Master One Forex Trading Strategy at a Time

Do you want to become a MASTER of your Forex trading strategy? If so, you will need to have laser-beam like focus, you cannot waver and change strategies every week like many amateur traders do. Bruce Lee was arguably the best martial artist of all time, and guess what? He was not born the best martial artist of all time. He earned that title through dedication and focus…he learned to become a MASTER of his craft…if you want to succeed in Forex you will need to do adopt the Bruce Lee mentality…

Forget everything you have learned up to this point in your trading career, because if you truly want to master a new Forex trading strategy you really need to wipe the slate clean of all the confusing indicator and software based trading systems you have likely used thus far. One of the biggest problems that plague traders who are trying to adopt a new approach to the Forex market is that they seem to bring a lot of preconceived notions and failed trading concepts with them. If you really want to excel at Forex trading and adopt a fresh new trading strategy, you need to focus on one strategy or way of thinking and stop allowing previously failed trading methods to influence your current perspective on the market.

• Train your Brain

Learning to master one trading setup at a time will help you properly train your brain to become more disciplined and objective, two characteristics that you absolutely must possess if you wish to excel at forex trading. The process of truly mastering and “owning” one forex trading setup at a time might take months or even years to accomplish, but your chances of making money are increased dramatically by doing so. After you completely master one trading setup you will know almost instantly whether or not your setup is present, there will still be some discretion involved, but owning and mastering a setup means that you have fine-tuned your sense of discretion when it comes to deciding which trades to take and which ones to pass on. Many traders search long and hard for some “holy-grail” trading system that allows them to avoid having to develop their discretionary trading skills, unfortunately for them, professional trading inherently involves a fine-tuned sense of being able to discern between A, B, and C grade trade setups.

The discipline and objectivity that you will require as a result of learning to master one forex trading strategy at a time should spill over into other areas of your trading such as managing your risk and remaining calm and collected. When your thoughts are scattered on multiple trading strategies and (or) you have little confidence in the strategy you are currently using, you are obviously not going to make very wise trading decisions. Learning to master and “own” one forex trading strategy at a time will solve both of these problems because your focus will not be scattered amongst multiple strategies and you will naturally gain confidence in each setup as you master them one by one. Essentially, our goal in mastering one setup at a time is to reduce variables in our trading, many traders do the exact opposite when starting out by actually increasing variables through analyzing greater and greater amounts of technical and fundamental market data. Yet, the reason most traders lose money is not because they aren’t analyzing enough data, it’s because they over-trade, over-leverage, and analyze TOO MUCH data.

• Learn to Think like your Mentor

Obviously, if you are looking for a new trading strategy or mentor, what you were doing before was not working for you. Thus, it is paramount to your success as a trader that you adopt the same trading philosophies that your new mentor or trading strategy teaches, wash your mind of what you have learned thus far and completely immerse yourself in this new approach to the markets. In regards to what we teach here at learn to trade the market, this means learning to master one price action setup at a time, as this is how I initially found success in the forex market and so it is also what I recommend all my students do. As I have stated previously, after you master one price action setup you can move on to master another, until eventually your forex trading arsenal is fully loaded.

• Specialization is the Universal Key to Making Money

What do most people that make a lot of money in this world have in common? What do Tiger Woods and Bill Gates have common? Or how about George Soros and Venus Williams? At first you might say “nothing” besides the fact that they all make a lot of money. But what is the fundamental reason, behind all else, that these people and others like them make so much money while the rest of the world struggles to get themselves out of bed in the morning? One word; specialization.

People that make a lot of money focus in on one thing that they are passionate about, and they do it over and over and over until they achieve the result they are looking for. Simply put, you cannot really make a lot of money at anything in life if you master nothing. All of the people in the above example have literally “mastered” one thing, sure they had ups and downs along the way, but they did not let that bother them, instead they transmuted this negative energy into motivation and pressed on because they believed in what they were doing. Had they got involved and distracted with numerous other side-projects or interests they simply would not have achieved what they did. In forex trading we need to focus on one price action setup at a time and become a “specialist” in it, get to the point where you find yourself being someone that other traders look to for advice on the setup that you “own”. Become an authority on each price action setup before you move on to the next, there is no sense in doing anything half-ass in this world, and trading price action setups is no different.

• How to Master the Setup

Mastering one price action setup at a time is accomplished through literally making it the only setup you think about or look for when interacting with the market. You essentially live, breath, and sleep this one setup until you feel confident you know every angle and condition it can or should be traded in. Keep a trading journal to record under which market conditions the setup excelled in and which conditions it performed weaker in. Find all the information out on the setup you choose and learn everything you can about it. Once you do this you can begin implementing this knowledge on a demo account, only after you master this one setup on a demo account should you attempt to master it on a live trading account. If you find you are becoming consistently profitable with this one setup on a live trading account and you truly feel like you “own” it, then and only then should you think about adding a new setup to your trading toolbox.

• One Setup does not mean One Variable

In closing, a very important distinction to make here is that one price action setup does not only mean entering a trade when you see a well defined pin bar or other price action setup. By learning to master one “setup”, we mean you learn to master trading that particular setup in a particular market context. For example, you might learn to master the pin bar strategy in a trending market and only enter or exit at confluent levels within the trend, this is an example of how a “setup” can mean the actual price action setup itself and the market conditions that it is traded in. So, in order to fully master one price action setup you must learn to master this setup in one particular market condition, perhaps you want to master thefakey strategy in range-bound markets, or the inside bar in down-trending markets; the totality of the actual price pattern itself combined with the particular market condition you trade it in is what you must master in order to consider yourself a “master” of one Forex trading strategy. To learn more about mastering the price action setups that I teach, check out myprice action trading course.

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February Special Promotion: This month I’m offering a Special Discount on Lifetime Membership to my Forex Courses, Live Trade Setups Forum, Daily Trade Setups Newsletter, Email support line & more. For more information Click Here.

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Author Bio: Nial Fuller is considered a leading ‘Authority’ on Price Action Forex trading strategies. If you want to learn more about harnessing the power and simplicity of Price Action Trading Strategies please visit Nial Fuller’s Forex Trading Course & Traders Community Page Here. Nial’s Students get lifetime access to all of his advanced price action Forex Courses, video lessons, webinar tutorials, daily trade setups newsletter, live trade setups discussion forum, traders support line & free ongoing course updates. For more information visit the Forex Course page here.

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You may ALSO be interested in the following lessons …

• How Often Do Professional Forex Traders Actually Trade?
• Trade Forex Like a Sniper…Not a Machine Gunner
• The Anatomy of How I Enter Price Action Forex Trades

Copyright – Learn To Trade The Market Author Nial Fuller

Risk Reward and Money Management in Forex Trading

This could possibly be the most important Forex trading article you ever read.That might sound like a bold statement, but it’s really not too bold when you consider the fact that proper money management is the most important ingredient to successful Forex trading.

Money management in Forex trading is the term given to describe the various aspects of managing your risk and reward on every trade you make. If you don’t fully understand the implications of money management as well as how to actually implement money management techniques, you have a very slim chance of becoming a consistently profitable trader.

I am going to explain the most important aspects of money management in this article; risk / reward, position sizing, and fixed dollar risk vs. percentage risk. So, grab a cup of your favorite beverage and follow along as I help you understand some of the most critical concepts to a profitable Forex trading career…

Risk : Reward

Risk reward is the most important aspect to managing your money in the markets. However, many traders do not completely grasp how to fully take advantage of the power of risk reward. Every trader in the market wants to maximize their rewards and minimize their risks. This is the basic building block to becoming a consistently profitable trader. The proper knowledge and implementation of risk reward gives traders a practical framework to do this.

Many traders do not take full advantage of the power of risk reward because they don’t have the patience to consistently execute a large enough series of trades in order to realize what risk reward can actually do. Risk reward does not mean simply calculating the risk and reward on a trade, it means understanding that by achieving 2 to 3 times risk or more on all your winning trades, you should be able to make money over a series of trades even if you lose the majority of the time. When we combine the consistent execution of a risk / reward of 1:2 or larger with a high-probability trading edge like price action, we have the recipe for a very potent Forex trading strategy.

Let’s take a look at the 4hr chart of Gold to see how to calculate risk / reward on a pin bar setup. We can see in the chart below there was an obvious pin bar that formed from support in an up-trending market, so the price action signal was solid. Next, we calculate the risk; in this case our stop loss is placed just below the low of the pin bar, so we would then calculate how many lots we can trade given the stop loss distance. We are going to assume a hypothetical risk of $100 for this example. We can see this setup has so far grossed a reward of 3 times risk, which would be $300.

Now, with a reward of 3 times risk, how many trades can we lose out of a series of 25 and STILL make money? The answer is 18 trades or 72%. That’s right; you can lose 72% of your trades with a risk / reward of 1:3 or better and STILL make money…..over a series of trades.

Here is the math real quick:

18 losing trades at $100 risk = -$1800, 7 winning trades with a 3 R (risk) reward = $2100. So, after 25 trades you would have made $300, but you also would have had to endure 18 losing trades…and the trick is that you never know when the losers are coming. You might get 18 losers in a row before the 7 winners pop up, that is unlikely, but it IS possible.

So, risk / reward essentially all boils down to this main point; you have to have the fortitude to set and forget your trades over a large enough series of executions to realize the full power of risk / reward. Now, obviously if you are using a high-probability trading method like price action strategies, you aren’t likely to lose 72% of the time. So, just imagine what you can do if you properly and consistently implement risk reward with an effective trading strategy like price action.

Unfortunately, most traders are either too emotionally undisciplined to implement risk reward correctly, or they don’t know how to. Meddling in your trades by moving stops further from entry or not taking logical 2 or 3 R profits as they present themselves are two big mistakes traders make. They also tend to take profits of 1R or smaller, this only means you have to win a much higher percentage of your trades to make money over the long-run. Remember, trading is a marathon, not a sprint, and the WAY YOU WIN the marathon is through consistent implementation of risk reward combined with the mastery of a truly effective trading strategy.

Position Sizing

Position sizing is the term given to the process of adjusting the number of lots you trade to meet your pre-determined risk amount and stop loss distance. That is a bit of a loaded sentence for the newbie’s. So, let’s break it down piece by piece. This is how you calculate your position size on every trade you make:

1) First you need to decide how much money in dollars (or whatever your national currency is) you are COMFORTABLE WITH LOSING on the trade setup. This is not something you should take lightly. You need to genuinely be OK with losing on any ONE trade, because as we discussed in the previous section, you could indeed lose on ANY trade; you never know which trade will be a winner and which will be a loser.

2) Find the most logical place to put your stop loss. If you are trading a pin bar setup this will usually be just above / below the high / low of the tail of the pin bar. Similarly, the other setups I teach generally have “ideal” places to put your stop loss. The basic idea is to place your stop loss at a level that will nullify the setup if it gets hit, or on the other side of an obvious support or resistance area; this is logical stop placement. What you should NEVER DO, is place your stop too close to your entry at an arbitrary position just because you want to trade a higher lot size, this is GREED, and it will come back to bite you much harder than you can possibly imagine.

3) Next, you need to enter the number of lots or mini-lots that will give you the $ risk you want with the stop loss distance you have decided is the most logical. One mini-lot is typically about $1 per pip, so if your pre-defined risk amount is $100 and your stop loss distance 50 pips, you will trade 2 mini-lots; $2 per pip x 50 pip stop loss = $100 risked.

The three steps above describe how to properly use position sizing. The biggest point to remember is that you NEVER adjust your stop loss to meet your desired position size; instead you ALWAYS adjust your position size to meet your pre-defined risk and logical stop loss placement. This is VERY IMPORTANT, read it again.

The next important aspect of position sizing that you need to understand, is that it allows you to trade the same $ amount of risk on any trade. For example, just because you have to have a wider stop on a trade doesn’t mean you need to risk more money on it, and just because you can have a smaller stop on a trade does not mean you will risk less money it. You adjust your position size to meet your pre-determined risk amount, no matter how big or small your stop loss is. Many beginning traders get confused by this and think they are risking more with a bigger stop or less with a smaller stop; this is not necessarily the case.

Let’s take a look at the current daily chart of the EURUSD below. We can see two different price action trading setups; a pin bar setup and an inside-pin bar setup. These setups required different stop loss distances, but as we can see in the chart below we still would risk the exact same amount on both trades, thanks to position sizing:

The fixed dollar risk model VS The percent risk model

Fixed dollar risk model = A trader predetermines how much money they are comfortable with potentially losing per trade and risks that same amount on every trade until they decide to change their risk.

Fixed percent risk model = A trader picks a percentage of their account to risk per trade (usually 2 or 3%) and sticks with that risk percentage.

In a previous article that I wrote about money management titled “Forex Trading Money Management – An Eye Opening Article”, I argued that using a fixed dollar amount of risk is superior to the percent of account risk model. The primary argument I make about this topic is that although the % R method will grow an account relatively quickly when a trader hits a series of winners, it actually slows account growth after a trader hits a series of losers, and makes it very difficult to bring the account back up to where it previously stood. This is because with the % R risk model you trade fewer lots as your account value decreases, while this can be good to limit losses, it also essentially puts you in a rut that is very hard to get out of. What is needed is mastery of one’s trading strategy combined with a fixed dollar risk you are comfortable with losing on any given trade, and when you combine these factors with consistent execution of risk / reward, you have an excellent chance at making money over a series of trades.

The % R  model essentially induces a trader to ‘lose slowly’ because what tends to happen is that traders begin to think “Since my position size is decreasing on every trade it’s OK if I trade more often”…and whilst they may not specifically thinkthat sentence…it is often what happens. I personally believe the % R model makes traders lazy…it makes them take setups that they otherwise wouldn’t…because they are now risking less money per trade they don’t value that money as much…it’s human nature.

Also, the %R model really serves no real world purpose in professional trading as the account size is arbitrary; meaning the account size does not reflect the true risk profile of each person, nor does it represent their entire net worth. The account size is actually a ‘margin account’ and you only need to deposit enough in an account to cover the margin on positions…so you could have the rest of your trading money in a savings account or in a mutual fund or even precious metals…many professional traders do not keep all of their potential risk capital in their trading account.

The fixed $ risk model makes sense for professional traders who want to derive a real income from their trading; it’s how I trade and it’s how many others I know trade. Pro traders actually withdrawal their profits from their trading account each month, their account then goes back to its “baseline” level.

Example of Fixed $ Risk Vs. % Risk

Let’s take a look at a hypothetical example of 25 trades. We are comparing the fixed $ risk model to a 2% account risk model. Note: We have chosen the 2% risk because it’s a very popular percent risk amount amongst newbie traders and on many other Forex education sites. The fixed $ risk was set at $100 per trade in this example just to show how a trader who is confident in his or her trading skills and trades like a sniper would be able to build his or her account faster than someone settling on a 2% per trade risk. In reality, the fixed $ risk will vary between traders and it’s up to the trader to determine what they are truly OK with losing per trade. For me, if I was trading a small $2,000 account, I would personally be comfortable risking about $100 per trade, so this is what our example below reflects.

It’s quite obvious upon analyzing this series of random trades that the fixed $ model is superior. Sure you will draw your account down a bit quicker when you hit a series of losers with the fixed $ model, but the flip side is that you also build your account much quicker when you hit a series of winners (and recover from draw downs a lot faster). The key is that if you’re really trading like a sniper and you’ve mastered your trading strategy…you’re unlikely to have a lot of losing trades in a row, so the fixed $ risk model will be more beneficial to you.

In the example image below, we are looking at the fixed $ risk model versus the % risk model:

Now this example is a bit extreme, if you are trading with price action trading strategies and have truly mastered them, you shouldn’t be losing 68% of the time; your winning percentage is likely to average close to 50%. You can imagine how much better the results would be with a 50% winning percentage. If you won 50% of the time over 25 trades while risking $100 on a $2,000 account, you would have $4,500. If you won 50% of the time over 25 trades while risking 2% of $2,000, you would have only about $3,300.

Many professional traders use the fixed dollar risk method because they know that they have mastered their forex trading strategy, they don’t over-trade, and they don’t over-leverage, so they can safely risk a set amount they are comfortable with losing on any trade.

People who trade the %R model are more likely to over-trade and think that because their dollar risk per trade is decreasing with each loser it’s OK to trade more trades (and thus they lose more trades because they are taking lower-probability trades)…and then over time this over-trading puts them much further behind a fixed $ trader who is probably more cautious and sniper- like.

Conclusion

To succeed at trading the Forex markets, you need to not only thoroughly understand risk reward, position sizing, and risk amount per trade, you also need to consistently execute each of these aspects of money management in combination with a highly effective yet simple to understand trading strategy like price action. To learn more about price action trading and the money management principles discussed in this article, check out my Forex trading course.

Please Leave Your Comments Below & Click The Like/Share Buttons 

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February Special Promotion: This month I’m offering a Special Discount on Lifetime Membership to my Forex Courses, Live Trade Setups Forum, Daily Trade Setups Newsletter, Email support line & more. For more information Click Here.

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About The Author: Nial Fuller is considered a leading ‘Authority’ on Price Action Forex trading. If you want to learn more about harnessing the power and simplicity of Price Action Trading Strategies please visit Nial Fuller’s Forex Trading Course & Traders Community Page Here. Nial’s Students get lifetime access to all of his advanced price action Forex Courses, video lessons, webinar tutorials, daily trade setups newsletter, live trade setups discussion forum, traders support line & free ongoing course updates. For more info, visit the Price Action Course page.

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Related Articles:

• The One FACT About Trading That You NEED to Know
• How to Filter Good & Bad Price Action Trading Signals
• How to Develop A Profitable Forex Trading Mindset

Copyright 2013 – Learn To Trade The Market – Author Nial Fuller

Why You Don’t Need To Be Smart To Be a Trader

Many people think that you need to have a Master’s degree in Finance or be some Albert Einstein math-wiz to be a successful Forex trader. Well, I am living proof that you don’t need some fancy college degree or a doctorate in mathematics to be a skilled trader in the Forex markets. I started trading when I was in high school and shortly after getting out I started to become successful as a trader. I never finished college, and I don’t claim to be the “sharpest tool in the shed”. However, what I understand, and what other consistently successful Forex traders understand, is that trading success is not only about knowing you need to control yourself and your actions in the market, but actually doing it.

I know that sounds simple, but being a successful Forex trader really does boil down to these two main points:

1) Understanding that you must consciously control your interactions with the market so that you always do what is logically and objectively the best thing for your trading account at any given time.

2) Actually doing number one; it’s not enough to just understand….you have to actually DO. Remember, as Yoda said in Star Wars, “No! Try not. Do, or do not. There is no try.”

A good analogy for this concept is the fact that some doctors smoke cigarettes, I personally had a a doctor who I knew was a smoker when I was kid. Now, it’s pretty safe to say that all doctors UNDERSTAND they should not smoke or do anything to damage their body. So…it isn’t that they aren’t smart enough…it’s that they just don’t have the proper habits and (or) they aren’t disciplined enough to carry them out.

The same thing can be said for many Forex traders; it isn’t that they aren’t smart enough to understand how to trade properly….it’s that they just don’t DO WHAT THEY KNOW NEEDS TO BE DONE.

• Long-term success vs. short-term satisfaction

Successful Forex traders understand that their trading success is measured over a large series of trades, not just a few. This is not a difficult concept to understand; you don’t need a genius IQ or a degree in finance to understand this. So, once again, we are seeing exactly why you don’t need to be super smart to be a successful Forex trader. What you DO need is some common sense and the ability to act on what you know is true.

So, a key element to becoming a consistently profitable Forex trader is aiming for long-term success, rather than short-term satisfaction. Giving into short-term satisfaction is the main reason why most Forex traders lose money. It isn’t enough to just know that you shouldn’t give into short-term satisfaction in regards to your trading; you have to actually not do it. Amateur traders end up over-trading and risking too much because they cannot overcome the temporary satisfaction that these actions bring to them. You have to be able to ignore these temptations with the knowledge that exercising patience and discipline is the only way to become successful over a longer period of time. What good is winning a few trades really quickly if you give all your winnings back the next week or the next day? Traders who give in to short-term satisfaction are constantly experiencing very volatile changes in the equity curve of their trading accounts, this usually ultimately ends in disaster with a blown out account.

So, while it is important to understand the importance of patience in Forex trading, you ALSO need to execute this understanding by ignoring all the short-term temptations that will come at you every time you open your trading platform. In fact, you could say that the way you manage your interactions with the Forex market is far more important than your intelligence or your ability to understand complicated mathematical trading algorithms or any other similar unnecessary trading “tool”.

• What types of people typically make good traders?

While there is no concrete rule as to who can be a successful Forex trader and who can’t, certainly people who are naturally more disciplined and realistic have an easier time achieving success in the markets than people who lack discipline in most areas of their lives and (or) who tend to ignore reality.

Discipline and overall fortitude are indeed FAR more important than intelligence when it comes to successful Forex trading. Many highly successful people in other fields fail miserably when it comes to trading the markets. Doctors, lawyers, college professors, you name it, there is no shortage of people from these highly-skilled fields and others that have lost thousands of dollars in the markets. It’s not because they weren’t smart enough to understand the concepts…this clearly is not the case; the reason highly intelligent and highly skilled people have no real advantage over anyone else is because becoming aprofessional Forex trader depends mostly on your ability to execute…not to comprehend.

It is execution of discipline that makes a successful trader, this means reinforcing positive trading habits instead of negative ones and making a conscious effort to make sure all your actions in the market are logical and not-emotion based. For these reasons we often see ex-military personal succeeding in the markets; because they know what it’s like to make discipline a part of their everyday lives. This is not to say that successful and intelligent people in other fields cannot be successful traders, in fact this is obviously not the case it all, I am just trying to emphasize the fact that intelligence and previous accomplishments do not really matter at all when it comes to trading. What matters the most is your ability to stay dedicated to and master your Forex trading strategy, your ability to stay disciplined in the face of constant temptation, and your ability to stay realistic.

• Keep It Simple Stupid

Yet another result of amateur traders erroneously believing that trading needs to be complicated or that they need to be super smart to succeed at it, is the fact that so many of them employ Forex indicators and (or) Forex trading robots to try and analyze and trade the market.

I won’t lie to you guys, early on in my trading career I tried all the typical indicators, I was stuck in the analysis-paralysis rut and I thought there was some “magic” combination of indicators that if I could just figure out, would give me a virtual key to riches. After enough trial and error I realized that was just not true. I began to notice the beauty in the simplicity of the price action occurring underneath all the messy indicators I had on my charts back in those early days. Once I peeled off all these indicators and swore them off forever, I began trading on simple price action strategies, these are the same ones I use today and that I teach to aspiring traders, granted I have definitely tweaked and refined them, but the simplicity remains, because it works.

You see, there is no “magic” indicator and there is no knowledge that I have that you guys cannot or do not already have. The difference between traders who are successful like me, and traders who are not, can only be explained through the difference in our behavior in the market. I trade a lot less than you might think, and so do the other successful traders who I know. It’s all about trading Forex like a sniper instead of a machine gunner. If you’d like to learn more about this “stupidly” simple style of Forex trading check out my price action trading course.

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February Special Promotion: This month I’m offering a Special Discount on Lifetime Membership to my Forex Courses, Live Trade Setups Forum, Daily Trade Setups Newsletter, Email support line & more. For more information Click Here.

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Author Bio: Nial Fuller is considered a leading ‘Authority’ on Price Action Forex trading strategies. If you want to learn more about harnessing the power and simplicity of Price Action Trading Strategies please visit Nial Fuller’s Forex Trading Course & Traders Community Page Here. Nial’s Students get lifetime access to all of his advanced price action Forex Courses, video lessons, webinar tutorials, daily trade setups newsletter, live trade setups discussion forum, traders support line & free ongoing course updates. For more information visit the Forex Course page here.

You may ALSO be interested in the following lessons …

• K.I.S.S. – Keep It Simple Stupid Forex Trading Method
• How Often Do Professional Forex Traders Actually Trade?
• Are You Addicted To Forex Trading?

Copyright – Learn To Trade The Market Author Nial Fuller