How To Develop A Profitable Forex Trading Mindset

In today’s lesson I am going to help you develop a profitable trading mindset.

It’s an unavoidable reality that your forex trading success or failure will  largely depend on your mindset. In other words, if your Forex trading psychology is not right, you aren’t going to make any money! Unfortunately, most traders ignore this important fact or are unaware of how critical having the proper mindset is to Forex trading success. If you do not have the correct trading mindset, it doesn’t matter how good your trading strategy is, because no strategy will ever make money if it’s used by a trader with the wrong psychology.

Note: I would love to hear how you plan on using the points discussed here to improve your Forex trading mindset. Please leave me your comments and feedback below after reading today’s lesson!

A lot of people seem to be unaware of the fact that they are trading with a mindset that is inhibiting them from making money in the markets. Instead, they think that if they just find the right indicator or system they will magically start printing money from their computer. Trading success is the end result of developing the proper trading habits, and habits are the end result of having the proper trading psychology. Today’s lesson is going to give you the insight you need to develop a profitable trading mindset, so read this lesson carefully and don’t dismiss any of it, because I promise you that the reason you are struggling in the markets now is because your mindset is working against you instead of for you.

Step 1: Have realistic expectations

The first thing you need to do to develop the proper Forex trading mindset is have realistic expectations about trading. What I mean is this; don’t think you’re going to quit your job and start making a million dollars a year after 2 months of trading live with your $5,000 account. That’s not how it works, and the sooner you ground your expectations in reality, the sooner you will begin to make money consistently. You need to accept that you cannot over-trade and over-leverage your way to trading success, if you do those two things you might make some quick money temporarily, but you will soon lose it all and more. Accept the reality of how much money you have in your trading account and how much of that you are willing to lose per trade. Here are some other points to consider:
• Only trade with disposable ‘risk’ capital – Disposable capital is money you don’t need for any life expenses, including retirement or other long-term things.  If you don’t have any disposable or risk capital,  then keep demo trading until you do, or stop trading all together, but whatever you do, do not trade with money you are going to become emotional about losing.  Always assume you could lose whatever money you have in your account or in a trade…if you’re truly OK with that, then your good to go, just make sure you don’t lie to yourself…REALLY BE OK WITH IT.  Trading with ‘scared’ money (money you can’t afford to lose) will lead to severe emotional pressure and cause ongoing losses.
• Make sure you can still sleep at night !– This is related to the above point about disposable capital. But the difference is that you need to ask yourself before EVERY trade you take if you are 100% neutral or OK with potentially losing the money you are about to risk. If you can’t sleep at night because you’re thinking about your trade, you’ve risked too much. No one can tell you how much to risk per trade, it depends on what you’re personally comfortable with. If you trade 4 times a month you can obviously risk a little more per trade than someone who trades 30 times a month…it’s relative to your trade frequency, your skills as a trader, and your personal risk tolerance.
• Understand each trade is independent of the previous one – This point is important because I know that many traders are way too influenced by their previous trade. The fact of the matter is that your last trade has absolutely ZERO to do with your next trade. You need to avoid becoming euphoric or over-confident after a winning trade or revengeful after a losing trade. The fact of the matter is that every time you trade it should just be seen as another execution of your trading edge; if you just had 3 consecutive winners you need to avoid risking more than usual on your next trade just because you are feeling very confident, and you need to avoid jumping back into the market right away after a losing trade just to try and “make back” what you lost. When you do these things you are operating 100% on emotion rather than logic and objectivity.
• Don’t get attached to your trades – If you follow the 3 points we just discussed you should have little chance of becoming too attached to your trades. Don’t take any trade personally, just because you lose on a few trades in a row doesn’t mean you suck at trading, likewise if you win on 3 trades in a row it doesn’t mean you are a trading “God” who is immune to losing. If you don’t risk too much per trade and you aren’t trading with money you need for other things in your life, you probably won’t get too attached to your trades.

Step 2: Understand the power of patience

I think one of the biggest realizations that allowed me to turn the corner in my own trading was that I didn’t have to trade a lot to make a decent monthly return. Think about it, most people consider a 6% annual return very good for a savings account, and if you average 12% a year on your retirement fund you are pretty happy. So why is it that most traders expect to make 100% a month or some other unrealistic return? What’s wrong with making 5 or 10% a month? That’s still exceptional over the course of one year. Whilst I can’t imply you will make a certain percentage per month, if you just understand that slower and more consistent gains are the way to long-term success in the markets, you will be far better off at the end of each trading year. Here are some other points to consider about patience:
• Learn to trade on the daily charts first – By learning to trade on the daily chart time frames first, you will naturally take a bigger-picture approach to the markets and you’ll avoid most of the temptation to over-trade that the lower time frames induce. Beginning traders especially need to slow down and learn to trade off the daily charts first. Daily charts provide the most relevant and practical view of the market. YOU DO NOT HAVE TO TRADE EVERYDAY to make a solid return each month.
• Quality over quantity – I consider myself a “sniper” of the market; I wait and I wait and I wait, sometimes for days or even 1 week without trading, then when I see a price action setup that triggers my “this one is a no-brainer” alarm…I pull the trigger with ZERO emotion. I am always fully prepared to lose the money I have risked on any one trade because I do not trade unless I am 100% confident that my price action trading edge is present.
• User your ‘bullets’ wisely – To really hammer-home the power of patience in developing the proper trading mindset, you need to understand that being patient will work to instill positive trading habits within you. Patience reinforces positive trading habits, whereas emotional trading reinforces negative ones. Once you begin to trade patiently you will see how using your “bullets” wisely works…you only need a few good trades a month to make a respectable return in the markets, after you achieve this via patience, you will learn to enjoy NOT being in the markets…because it’s then that you are “hunting your prey”. This in contrast to the frazzled and frustrated trader who is staying up all night staring at the charts like a trading zombie who just will not accept that they need to trade less often.

Step 3: Be organized in your approach to the markets

You NEED to have a business trading plan, a trading journal, and you need to plan out most of your actions in the market before you enter. The more you plan before you enter the higher-probability you will have of making money long-term. You are ALWAYS going to interpret the market more accurately whilst you’re not in a trade…so pre-planning everything increases your odds of making money since you will be working more on logic than emotion.
• Have a trading plan – I know it can be boring, I know you might think you don’t “need” to make one, but if you don’t make a trading plan and actually use it and tweak it as you learn, you will start trading on an unorganized and probably emotional path. A trading plan doesn’t have to be a very dry and boring document; you can get creative with it. You’re trading plan could be that you write your own weekly commentary before each week begins, plan out what you will do and look for in the upcoming week…just make sure you have a “plan of attack” before you enter any trade.
• Keep a professional trading journal – You need a track record, you need to record your trades, you need to do this in a forex trading journal. This is a critical component to forging the proper Forex trading mindset because it gives you a tangible document that you can look at and instantly get raw feedback on your trading performance. Once you start keeping a journal of your trades it will become a habit, and you will not want to see emotional results staring back at you in your trade journal. Eventually, you will look at your trading journal as something of a work of art that proves your ability to trade with discipline as well as your ability to follow your trading plan. This is something any serious investor will want to see if you plan on trading other people’s money.
• Think BEFORE you ‘shoot’, not after – All of the planning and preemption that I just discussed is analogous to thinking before you shoot. A gun is a very powerful weapon, we all know that we need to think before we shoot one, even if we are just hunting or shooting at a gun range. Likewise, the markets can be very powerful “weapons” in regards to making or losing you money. So, you want to do as much thinking before you enter a trade as you can, because after you enter you are going to naturally be more emotional and you don’t want to put yourself in a position of constantly entering regrettable trades. If you plan your actions before you enter, you should not regret your trades, even when you have losing trades. I never regret any trade I take because I don’t trade unless my edge is present and I’m always comfortable with the amount of money I have risked on any one trade.

Step 4: Have no doubt about what your trading edge is

Finally, don’t start trading with real money if you aren’t really sure how to trade your edge. You are obviously not going to develop the proper trading mindset if you jump into trading a live account without being 100% confident in what you’re looking for. Whatever your edge is, make sure you’ve found success trading it on a demo account for at least 3 months or more before you go live. Don’t just “dive in head first” without being totally comfortable in your approach…this is what most traders do and most of them lose money too.
• Have 100% confidence in your edge – I have 100% confidence in my price action trading strategies…that’s not to say that I am foolish enough to believe EVERY trade will win, but I am totally confident that every time I trade my edge is truly present. I don’t compromise my trading edge by taking setups that look they are “almost” good enough…I simply don’t trade in that case. I only take price action setups that I feel in my gut are high-probability valid representations of my edge. Therefore, I am never fearful or worried about any trade I enter, even if it ends up losing.
• Don’t gamble – There are skilled traders, and then there are people who gamble in the markets. If you take a calm and calculated approach to your trading and wait patiently for your trading edge to appear, like a sniper, then you are a skilled trader. If you just “run and gun” and veer off course from your trading plan, you are a gambler. So, are you a Forex trader or a gambler?
• Price action trading helps develop the proper trading mindset – My trading edge is price action, and I fully believe that the simplicity of price action trading helped me develop and maintain the proper Forex trading mindset. We don’t need tons of messy indicators on our charts and we don’t need Forex trading robots or other expensive software. All we need is the raw price action of the market and our magnificent human minds to interpret it; it’s up to us to harness this power.

Do You Have Problems Pulling The Trigger On Trades ?

You know those trades that you just ‘know’ you should take but for some reason you still don’t? Does it drive you crazy to wake up in the morning and see the trade setup from yesterday that you passed on screamed 200 pips in your favor?…Have you ever said to yourself ‘damn I knew I ‘shoulda’ took that trade, why did I pass on it?’ Have you ever checked back in on the market 12 hours or a day later only to see that the trade you previously closed out near breakeven ended up surging to hit your target without you on-board? Even after 10 years trading forex I personally still suffer from this problem, and I imagine for less experienced traders the problem is 10 times worse! It’s probably the most important problem that forex traders deal with on a regular basis.
This lesson will discuss these problems and will give you some potential solutions to keep them from reoccurring. After all, there’s nothing worse than kicking yourself because you simply ‘chickened out’ on an otherwise perfect trade setup…

Why aren’t you pulling the trigger?

The first step to fixing the problem of being afraid to enter a trade or ‘freezing’ up when you see a valid setup, is to identify the problem. Why are you not pulling the trigger when you know you should be? Here are some common reasons:
Fear – Being afraid to enter a trade is common amongst beginning traders or traders who have just experienced a massive losing streak. The fear can stem from different sources, maybe you haven’t fully mastered your trading strategy or you are risking too much per trade and have just suffered a massive loss. Whatever the reason, fear has no place in the mind of a successful Forex trader, and we will talk later in this lesson about how to get rid of it.
Not being clear on your trading strategy – Maybe you aren’t 100% clear on how to trade with your trading strategy. If this is the case, you need to get more education, practice your strategy on demo, and make sure you are actually using an effective trading method that’s not overly-complicated, like price action. If you are confusing yourself because your charts are plastered with 10 different indicators, you naturally are going to miss good price action trade setups (and kick yourself later) because your trading strategy is too difficult to decipher. Once you become a skilled price action trader, you will know for sure when your edge is present and when it’s not; this largely eliminates most instances of being ‘gun-shy’ to enter a trade.
Not being confident – Maybe you have low-self esteem that causes you to doubt your ability to trade successfully. Whatever the reason, if you have low-confidence in your trading abilities it can cause you to miss out on high-probability trade setups. We will discuss below some things you can do to build your confidence as a trader.
Too much pressure on one trade – Traders who have a habit of risking too much per trade or who tend to over-trade, naturally put too much emphasis on any single trade. This can cause them to become afraid to enter another trade after a series of losses, even if a valid and high-probability price action strategy forms next. If you risk too much per trade and lose on a few in a row you’re going to be scared of losing more money and this can cause you to miss out on perfectly good setups. If you over-trade and trade when you know you shouldn’t, you are probably going to have a lot of losing trades as a result, this will also cause you to experience fear and will potentially cause you to be afraid of pulling the trigger when a valid setup finally forms.

Believe in the trade signal.

The first thing you need to do if you want to get rid of the problem of not pulling the trigger when you know you should, is to really believe in your trading strategy and believe in every trade signal you take.
I never enter a trade that I don’t fully believe in. How do you achieve that same mindset? You achieve it by fully understanding your trading strategy, what your edge is and exactly how and when to trade it. If you know exactly what you’re looking for in the markets there’s never any reason to doubt yourself or trade when you shouldn’t. There’s also no reason to skip perfectly good trade setups if you know exactly how to trade your edge.
Many traders don’t fully believe in their trading signals because the signals are just too confusing to trade off of, or they have not fully mastered their trading strategy yet. Becoming a ‘master’ of your trading strategy is something I talk about a lot, and you really need to do that before you trade live. Mastering one trade signal at a time on a demo account is a great way to seamlessly transfer to real money trading.
There’s also an element of believing in your trade signals that deals with self-confidence. Many traders take their trading way to personally; they look at each winner or loser in the market as a reflection of their talent or skill. Really, even the best traders in the world have losing trades, and losing trades are just part of trading, it’s nothing personal, it doesn’t mean you are a bad person or that you suck at trading if you lose a few trades in a row. Indeed, it’s a perfectly natural part of the process of being a trader. So, don’t let losing trades get you down, if you have managed your risk effectively you should not care if you hit a few losers in a row as it’s bound to happen sooner or later, just keep sticking to your trading plan and trading with discipline.

Believe in yourself and your ability to trade successfully.

Believing in your trading edge and in each occurrence of your edge requires that you first believe in yourself and your ability to trade successfully. Clearly, if you don’t believe you CAN be a profitable trader you will never ending being one. However, many traders sabotage their own efforts at making money in the markets simply because they don’t think like a pro trader; they don’t believe they can make consistent money in the markets.
Hindsight – To believe in your own ability to trade and to stick to your edge, you have to kick the habit of hind-sight trading. That is, back-testing and generally having a habit of going back and looking at previous signals that you wished you would have taken. This is not an exercise that is conducive to developing your confidence or your belief in your own trading abilities. The best way to build these abilities is to test your skills in real-time market conditions on a demo account by forward-testing, not back-testing. I get emails everyday from traders asking me about back-testing, and I say the same thing to all of them; it’s pointless because what matters is whether or not you can trade in real-time market conditions where you cannot yet see the price action that unfolds after the setup forms. Forward-testing is the real testing-ground, and back-testing has a tendency to make you a ‘hindsight’ trader where instead of building real confidence and belief in your ability to trade NOW, you develop confidence that you COULD have traded successfully in the past…which is simply pointless.
Don’t fret over losses – Don’t beat yourself up over a losing trade, after all, they are unavoidable even to the best traders in the world. EVERY trader has losing trades. You can’t let them rattle your confidence or your belief in yourself, because if you do you will start second-guessing valid instances of your trading edge, and once you start doing this it can start a snow-ball effect of being afraid to pull the trigger.

Face your fear

Finally, you’ve got to take on risk and put your ballz on the line if you want to be a trader, and that means you’ve got to stare it in the face and accept the fact that you could lose the money you have risked, so don’t fight it. The more you try to fight against losing money in the markets the more you will likely lose. Trading is sort of like human relationships…if you try to control them and force them they typically don’t work out, and if you try to control the markets or ‘force’ your will upon them you are going to lose money. Just as you have to accept a person you want to have a relationship with, friendly or otherwise, and not try to ‘force’ them to like you or try and control them, you have to simply accept that you can’t control the market; accept the market for what it is, not what you want it to do for you.
The market will move, it will rise and fall and ebb and flow, you have to learn how to read its price action to take advantage of its movement. YOU have to roll with the market if you want to take money out of it…otherwise it will ‘roll’ right over you. Once you accept that you are going to have losses and you accept that you have to take what the market gives you and not try to force the issue, your trading will become much more stress-free and easy. People become frustrated and angry when their expectations are not met, likewise, traders become frustrated and angry when they expect a certain outcome from a trade and it doesn’t happen.
You’ve got to learn to let go of your expectations of any single trade, because any trade can lose. The key is to believe in your ‘edge’ and continue to subject yourself to opportunities when they present themselves on the charts.  You’ve got to remind yourself that each trade setup is just another execution of your edge, and if you have mastered your price action trading strategies and follow your plan religiously, you will have a high-probability edge to trade with. When you learn to trade off of the market’s price action and truly ‘let go’ of your fear of ‘uncertain’ outcomes, you will begin to see a dramatic change in your trading and in your confidence as a forex trader.  If your wanting to develop your ‘winning edge’, I suggest you focus your attention on learning a ‘simple’ price action trading strategy and follow the major currency pairs on the daily chart time-frames.

The Lazy Man’s Guide to Forex Trading; Let the Market Do the ‘Work’

When we think of a “lazy person” we typically imagine someone laying around at home watching TV on the sofa with a bag of potato chips in one hand and a cheap beer in the other. One thing that we almost never associate with a lazy person is success or wealth; in fact we usually imagine them as being poor, dirty and disorganized. However, today I am going to challenge these beliefs because I feel that in our modern society there’s an over-emphasis on doing “more” and being some workaholic control freak who simply lives for their job and little else.

The word “lazy” is often associated with negativity in most social circles, but depending on what you’re being lazy about, it can actually be a good thing. Saying someone is a “lazy person” is usually a gross generalization. You could be an athlete or a super fitness freak, but you might be lazy when it comes to investing, money and business; many people are lazy in some areas of life and the exact opposite in others. There’s nothing wrong with this, and it’s actually quite normal to be lazy at some things in your life. When it comes to trading or investing, it could even be said that being “lazy” or relaxed can actually increase your chances of success.

The lazy trader concept I am using for today’s lesson is simply a metaphor for trading in a manner that is relaxed and unemotional, but the theory behind it makes sense. Remember, I have been doing this for over 10 years and I have witnessed thousands of traders and the different ways they trade; I know what attributes make good traders and being lazy is probably in the top 5 essential attributes in my opinion. Relaxed, stress-free personalities tend to make more money in trading and investing, whereas the serious over-thinkers and obsessively dedicated personalities tend to lose!!!

Lazy traders aren’t glued to their charts all the time

The best traders I know don’t bother analyzing the market or watching their charts all the time. They know they can’t change where the market is headed, so they just set orders/alerts when certain prices are reached or they look at the market in the morning and in the evening briefly. Successful traders take a relaxed and no-stress approach.
The most profitable traders and investors don’t addictively watch their positions all night while they should be sleeping. They make a decision and let the market determine the outcome without interruption or interference. Some might call this “lazy”, I call it “smart” because it works and it’s the foundation of the set and forget mentality that I believe in.
To be a good trader, we almost have to do the opposite of everything that feels “right”. It feels “right” to sit there and watch the markets and watch your trades tick away. But this really accomplishes nothing except making you more likely to do something stupid like enter another position, close your position before it really gets moving, etc. It seems like you need to sit there and “analyze” the market for a long time, and especially after you enter a trade, but you don’t need to do this, actually you really need to do the opposite. Just leave your computer, be “lazy” about your trades and forget about them for a while, this way you really give your trading edge a fair shot to play out.

Lazy traders have bigger winners

How many times have you entered a valid trade setup from the daily chart time frame and then began watching the 4 hour or 1 hour chart after your trade was live? I’ll bet you’ve done this a lot, and I’ll bet it’s led to more than a few occasions where you exited that perfectly good daily chart setup only because you saw the market moving against you on the intra-day charts.
Lazy traders don’t sit there and watch their trades after they are live, thus they are not looking at every up and down move during the intraday session, and thus they eliminate most of the temptation to interfere with their trades. This leads to bigger winners and a higher overall risk reward return over the long run. The reason is simply because they are not being influenced and hypnotized by the short-term fluctuations in price that tend to cause traders to make emotional trading errors. The lazy trader is down at the beach having a  beer or spending time with his family, while the obsessed trader is crouched over his computer panicking and stressing over his open positions…which one do you think is more likely to make a stupid emotional trading mistake?

The Lazy trader goes to sleep whilst the obsessed trader is sleep deprived

Lazy traders are relaxed and calm; they get a good night’s sleep and let the market do its thing. When they wake up in the morning they turn on the computer and look at the overnight price action for a few minutes and then carry on with their lives.
The obsessed coffee-addicted trading junkie is sleep deprived because he has been up watching the market until 4a.m. crouched over his trading terminal…he is ultimately creating his own failure by taking trading way too seriously and over thinking every single decision. The longer you sit there and “think” about the markets and your trades, the more likely you are to make a stupid / emotional trading mistake.

Lazy traders develop confidence in their trading ability

One of the things that I see from the emails I get every day is that there are basically two types of traders; those traders who are happy trading around their current job and schedule and those who look at trading as their only option for income and put all their eggs in the trading basket right from the start. What this means is that one trader is starting from a point of no pressure or emotion and another trader is already putting pressure and emotion into the mix before they even make their first trade.
Putting pressure on yourself to make a lot of money from your trading right out of the gate is going to flood your mind and body with emotion and adrenaline which is naturally going to cause you to do stupid things like over-trading and over-leveraging your account. Whereas, if you take a lazy trader approach and just check the market before and after work each day, you will slowly but surely gain confidence and also have better longer-term results since you will have largely eliminated emotion from the mix.
The “true” market picture can easily be seen after analyzing the price action on the charts for just a few minutes at the close of each trading session. (end of day chart analysis).  However, when obsessed traders sit there and continue to analyze the market, they inherently make up all kinds of things that “could” happen and they manifest patterns and trade setups that are nothing more than low-probability random price movements. Thus, trading in this obsessive manner works to tear down your confidence as a trader and just makes you frazzled and frustrated in the end. The lazy trader develops a better “gut feel” for the market because he is just looking at what’s there and then moving on, rather than sitting there manifesting different combinations of things that could happen.

Lazy traders develop positive trading habits

The lazy trader flicks open a EURUSD chart, looks for something obvious to trade and either trades or passes on the opportunity. He is not worried about news events or what the media is saying; he is not over-thinking it and he does not care if he enters a trade or not. Trading in this manner develops positive trading habits because you are reinforcing a minimalist trading approach.
I am a minimalist myself and I keep things simple and clean when it comes to trading. I can’t stand being stressed or worried about what the market is doing, I can’t stand the thought of analyzing the market for hours on end, or anything for that matter. I don’t listen to financial news and I don’t over-think what I am doing in the market or in life. I would much rather be relaxing reading a book/magazine or watching a movie or entertaining my 3 year old son.
In fact, I would much prefer to do ANYTHING else but stress out about a trade or a trading decision.
It is often the case that the more serious and obsessed traders typically develop addictive and self-destructive personalities, or they already have these personalities when they start trading and they aren’t willing to change. They actually believe that they can influence or change what the market is going to do by focusing almost their whole life on the markets; however this couldn’t be further from the truth!

The key to lazy trading

Now that we’ve discussed a lot about why being a “lazy trader” can improve your trading, let’s talk about how to actually become a lazy trader…
Simply put, you have to genuinely not care about the outcome of any one trade and you have to eliminate the “itch” to be in the market all the time. The easiest way to really not care if you’re in the market or about the outcome of any one trade is to be sure you are totally OK with the money you are risking per trade and the money you have risked in your trading account. You should only be risking an amount that allows you to forget about the trade, when traders start risking more than they are comfortable with losing per trade they put themselves at a very high risk of becoming over-attached to their trades…and this is not the lazy trader approach, this is the obsessive / addictive approach that never works.
You also have to be confident in your trading edge and your ability to trade it. If you don’t really have a trading strategy or you don’t know what you’re doing, you aren’t going to be confident enough to just glance at the market a couple times a day briefly. Instead, you’re going to sit there for hours trying to manifest a signal simply because you aren’t really sure what you’re looking for in the markets. So, be sure you’ve mastered an effective trading edge like price action strategies and that you fully know how to trade it.

Lazy = better trading and a better life

Me and thousands of my followers who have made the transition to my “keep it simple” and minimalist trading philosophy, know firsthand its immense power. Not only do trading results improve by adopting the “lazy man” trading attitude…our life ultimately becomes less stressed and less cluttered with counter-productive thoughts, and then doors start opening in all areas.
Whether it’s business, trading, relationships or life in general, we often destroy them by trying too hard, doing too much, over-thinking, over-analyzing and simply stressing ourselves or others to death.
Do yourself a favor…start being a lazy trader! If you’re already a lazy trader, good for you! To the people who are not yet converted to “lazy trading tactics”… you need to stop trying so hard, relax and enjoy your life and you may find your trading will actually improve, not to mention your happiness level. It does not have to just be about trading, if you’re in business try removing the stress and stop thinking so much!
Don’t lock yourself in the office or in your trading room and think that the more hours you put in the better the outcome will be, that kind of thinking will destroy you, blow up your trading account and possibly destroy your relationships with others. Your wife/partner will probably notice a huge change in your personality if you make the commitment to be more relaxed.
If anything I have discussed in today’s article has turned on a light bulb in your head…I encourage you to pursue a change in your trading & life. It’s time to undo the damage you have already caused yourself and turn over a new leaf. Some people never wake up to the idea that they should be living a stress-free, relaxed and “lazier” trading life. Hopefully I have “saved” some of you today!
To learn more about my lazy-man’s trading tactics and how to trade stress free and get your life back…do yourself a favor and check out my price action trading course, it’s bound to help.
I’d really love to hear your feedback on today’s lesson, so please leave your comments below & click the ‘like button’ below.
Good trading, Nial Fuller

The Minimalist Guide To Forex Trading & Life

The inspiration for today’s article comes from something I am currently experiencing in my personal life.  I recently sold my luxury house in Queensland Australia and am currently renting while my family and I decide where we really want to live. Our plans were to eradicate all assets and debt, as my wife and I are both quite young and with my profession as a trader and coach, I have the ability to be mobile. We decided that we wanted to try living a stripped down and nomadic lifestyle for a while and welcomed the freedom it promised.

However, this doesn’t mean all people will want to be nomadic and travel around the world living in different places. The lesson that I want to put forth today, is that as humans we tend to over-clutter our lives with addictions and materialism (houses, cars, so forth). Halfway through 2012 I said enough is enough and I set out to completely remove all clutter and unnecessary possessions, even small things. Basically, I wanted to be free of all these burdens…because I realized I had a bunch of stuff I didn’t need, and I felt it was holding me back. I had more than one car that I didn’t really need, I owned a house I wasn’t happy with and that was too big, etc. I just felt I had too many things that were cluttering my life and my mind; my goal was to set out to only have a suit case, a laptop, and my favorite book.

The reason I’m sharing this story with you, is because I believe that most of you out there can benefit from applying a similar logic to your life, i.e. de-cluttering, liquefy assets and removing debt.  People can interpret it however they want, but the core thing is to keep with you only what you absolutely need in an effort to save time, save money, remove stress, and more.

… So what the hell does this have to do with trading you ask?

What we are setting out to do today is to become ‘minimalists’ as applied to trading, and as we have discussed already, this can apply to other areas  of life too…getting rid of unnecessary things…all possessions that you don’t really need…all unnecessary emotional attachments to things, minimalism is almost a religion of sorts. Many of you know that I take a very stripped down and simple approach to trading the markets, and so if you think about the benefits of being a minimalist in everyday life, it really is no big surprise that it’s also the best way to trade the markets.

Forget the stereotypical facade of a pro trader

The first step to becoming a minimalist trader is to lose the facade of the cliché trader with his lovely office, big wooden desk and several stacks of monitors with the latest trading software – you only need a laptop, FREE trading software (get it here), an effective forex trading strategy and your brain. The reality is that you do not need a big office, multiple monitors and an expensive data feed to be a successful trader.
The stereotypical facade of a “pro trader” is what many of us are addicted too…but it’s not reality…reality is a guy trading from a coffee shop on his PC.
Get rid of all the excess weight you have if you are still learning how to trade or you’re struggling to trade successfully. If you want to add a big trading desk with multiple monitors and all the bells and whistles after you become a successful trader, that’s OK. But don’t think you need to go out and drop 5 grand on your trading office in order to make money in the markets. Some of the best traders in the world just trade off a laptop. You don’t NEED an office with 3 computers or a fancy workstation.
I personally have gone from having a big trading office with multiple monitors back to an Ultra book PC and wireless internet, sometimes I even use my iPhone for my web connection…I realized my ego and greed took over before, and these things negatively impacted my trading.

Minimize what you put on your charts, maximize trading results

Unless this is your first time on this blog, you probably know that I teach what some might call a “minimalist” approach to trading. However, you might not know WHY I trade and teach this approach.
It usually takes every trader a certain amount of trial and error before they figure out that most of their trading mistakes resulted from ‘stupid’ things they did, and not necessarily from the trading method they were using. Most traders lose money because they make emotional trading mistakes; this is something most all of us can agree on.
However, the role that having tons of “crap” on your charts plays as a contributor to your trading problems, is often overlooked. Just as the materialist mentality of needing to buy more things to make us feel happy or fulfilled is a flawed mentality, so is the mentality that adding more technical indicators and analysis tools will somehow make you a better trader. One of the big secrets to success in all areas of life and indeed even to happiness is that less is often better. Just as having less material things in my life has significantly increased my peace of mind, bank account and time spent with my family, it can also help you to become a better person and trader.
I mentioned above that trader error is the main cause of losing money in the markets, not the particular trading method you use. However, most traders naturally assume that it’s their trading system or strategy to blame for their losses in the market. They then set out on a quest to find the ‘best’ trading method, adding indicators, Elliot Waves, super-turbo 5,000 trading robots, and everything else under the sun to their charts. This provides them with a false sense of security and hope for a while, until they realize it’s not doing anything to improve their trading results. The point here is that MORE IS NOT BETTER!
You see, as traders our trading mindset is the most important piece of the puzzle. However, the strategy or system that we use to trade with can and does have a profound effect on our trading mindset. So, when we try trading with 10 different indicators on our charts, we get confused, conflicted, and frustrated and once this happens it’s only a matter of time before these feelings result in impulsive and emotional trading. So, we can see that our mindset is perhaps the key to success in the markets, but because our trading strategy influences our trading mindset heavily, it too is very important.
The next time you want to put an indicator on your chart ask “Do I really need this? Is this really going to help me?”. “DO I REALLY NEED THIS?”….We want to only trade with what we need …..

How to incorporate minimalism into your trading routine (and everyday life)

• Ditch the forex indicators and trading robots and start over with a totally clean price chart. This act alone will do a lot to calm your nerves and your mind while analyzing the markets.
• Learn to trade with simple price action strategies. After you ditch the indicators you will need to learn how to trade off the raw price action of the market. Whilst this might seem different to you at first, I can promise you it’s a lot easier and makes a lot more sense than whatever messy method you were trading with before.
• After you learn to trade with price action, understand that you don’t have to spend a lot of time analyzing the markets each day. You can learn to trade in an end of day manner and fit trading in around your day job.
• Forget about trying to analyze 20 different markets each day. Minimize the markets you trade and this will work to sharpen your focus on the handful that you like the best. I focus on the major forex currency pairs and a few other markets like oil, gold, and the Dow.
• Don’t worry about multiple monitor setups, fancy trading desks, extremely expensive computers, monthly data feed subscriptions, or any of these other ‘luxury’ trading office items. Truth is, you don’t NEED them. They are nice things to have if you can truly afford them, but you really don’t need them to trade successfully. I can afford these things but I don’t have them anymore because I realized they were contributing to feelings of greed and materialism, and most of all I realized I just didn’t need them.
• One of the things I also did was got a P.O. box for my mail. This might seem like a small thing, but it’s all about downsizing and consolidating, and each little thing you downsize or get rid of adds up. Now, I only collect my mail once a week, this saves time and it changes the ‘process’ of your life…I took a minimalist approach to getting my mail, this freed up time and energy each day to devote to other more important things, even if it was a small amount of time each day.
• Make sure your trading room or trading location is clean and simple. Whether it’s in your home or from the local Starbucks, make your surroundings minimal. You don’t need 50 trading books sitting around, instead, pick your favorite 3 and keep them with you (hopefully one of those is my book ). If you have to, put all the ‘junk’ that you really don’t need in a storage unit, I did that, and it really makes you realize that you don’t need the majority of the things you thought you did.

Conclusion

People like to hoard things; they hoard possessions, money, collectables, you name it. It’s a fact that when most people get a pay raise they simply tend to buy more things (crap) that they really don’t need, thus keeping them stuck in a perpetual cycle of consumerism and materialism. I am telling you that you do not need to live this way. You don’t have to be a slave to debt anymore, and you don’t have to try and keep up with the “Joneses”…who cares about the Joneses, they aren’t that interesting anyway.
You see, there’s a common thread between minimalism as a lifestyle choice, a trading choice, and happiness and success. That thread consists of the fact that material items do not bring you happiness, trading success is not the result of having lots of indicators and fancy office equipment, and success is more easily attainable with a clutter-free and streamlined lifestyle. Have you ever seen that show “Hoarders” on A&E? If you have seen it, you would agree that possessions don’t make you successful or happy. Materialism is a real addiction, buying things satisfies some primitive urge that we need to feel secure. This is very similar to why traders get addicted and dependent on indicators, reading economic reports, trading robots, and you name it. We tend to overlook the most obvious things in life, such as the fact that happiness is readily available for free by just spending time with loved ones, or that the raw and unobstructed price action of a market provides us with all the technical clues we need to develop an effective trading strategy.
From here, you need to take the next step and decide if you are living a cluttered life, and if so, how can you de-clutter it? Similarly, you need to take a look at your trading approach and decide if it’s simple, logical, and effective or full of clutter and confusion. If you want to de-clutter your approach to trading, I suggest you checkout my price action trading course and see just how much taking a minimalist approach to your trading will improve your overall trading results.
I’d love to hear your feedback on today’s lesson, so please leave a comment below & click the ‘like button’ below.
Good trading, Nial Fuller

(My Secret Trading Weapon) – The Most Important Ingredient to Trading Success

Today I want to share with you one of my ‘secret trading weapons’. This is something very real and practical … Something that, if applied, can make a positive change in both your trading results and your personal life. There is one thing that I consider to be my ‘secret weapon’ for trading the markets successfully. It is something that all of us have the ability to develop and employ in the markets, it does not cost any money and it’s the single most important ingredient to trading success…
What am I talking about here? Well, in all areas of life there is something that separates winners from losers, achievers from underachievers, and those that reach their goals from those that don’t. The ability to plan ahead and not let emotional decision-making rule your life is something that allows people to excel in their personal relationships and in their professional lives. One of the most important and prevalent defining characteristics of people who achieve success in their lives is that they have patience. Patience is perhaps the MOST important habit that a Forex trader can develop.
It is the patience to sit on your hands and wait for only the best trade setups that separates the winning traders from the losing traders. Patience is the defining characteristic of what sets humans apart from all other species in the world. When we employ patience we are using the most advanced frontal-lobe area of our brains that is responsible for planning and forward-thinking, and when we employ emotion we are using the older and more primitive limbic system area of the brain which evolved for use in fight or flight situations. So, which trader will you be; a patient trader who uses the more highly evolved areas of their brain, or an emotional trader who essentially trades like a monkey?
Patient Forex traders make money faster than impatient traders
Want to make money as fast as possible in the markets? Stupid question? Maybe. But, most traders do the exact opposite of what they should do to make money in the markets. The problem is that most traders trade with little or no patience because they want to make money now and have a skewed concept of what ‘making money fast’ actually means. They do not think about 1 year from now or 2 years from now. What good are you doing if you trade now with little or no patience and as a result your trading account value increases and decreases like a roller coaster of emotion only to end up negative at year’s end?
What you need to do is think about trading as a year-long process. Think about how you can build your trading account over the course of a year, not over the course of one day or one week. By slowing down and realizing that you need to have patience to trade only the most obvious setups and thus to not over-trade, you will inevitably build your account faster than if you enter numerous trades each day in a futile attempt to ‘force’ the market to make you money. You see, the market does not care about you, so you have to care about it by taking what it gives you and waiting until it shows you its cards by forming an obvious price action trading setup. If you can do this consistently for one year I promise you that your trading account will be larger than if you trade every day and over-analyze the markets for hours all day and night.
Allow your trading edge to work in your favor by employing patience
Having patience to let your trades play out in order to see the true probability of your trading edge is something most traders don’t do because they voluntarily lower the probability of their trading edge by meddling with their trades too much. Let me explain that in simpler terms…
Do you move your stop losses and targets around multiple times after entering a trade? Do you get stopped out at breakeven all the time only to see the trade take off in your favor? If you are doing these things you are likely trying to control the market and by doing so you are voluntarily decreasing the probability of your trading edge.
This is a concept that is a little difficult to grasp because most traders feel the need to move to breakeven or manually close out a trade that is moving against them instead of letting the market run its course. But, think about this, if you simply set and forget all your trades and let the market play out by either hitting your stop loss or your target, you are allowing your trading edge to work and after a large enough samples of trades you will see your trading edge pay off. Most traders take smaller profits than what they had pre-determined before entering, or they make the huge mistake of moving their stop loss further from entry and taking a larger loss than they had pre-determined. (Note: there are times when moving your stop or target is warranted, see my article on Forex trade management for more)
All of these mistakes are born out of a lack of patience, and until you understand that you do not need to meddle with your trades after they are live, you are going to lower the probability of your trading edge. Consider this; if you save yourself 2 losses by moving to breakeven and then you decide to move the next two trades to breakeven after getting up a small profit, but then these two trades also got stopped at breakeven when they would have been winners, you have just lowered the probability of your trading edge…even if you would have taken the 2 losses. Look here:
Risk = $100, Reward = $200
2 potential losing trades stopped at breakeven = $0
2 potential winning trades stopped at breakeven = $0
2 losing trades = -$200
2 winning trades = $400
Net profit of just ‘setting and forgetting’ and letting the market play-out by having patience to not meddle in your trades = $200
Now, this is a small example, but it shows you why moving your stops around and getting out at breakeven all the time or even manually closing your trades for small losses or gains BEFORE they hit your pre-determined stop loss or target can and will lower the overall probability of your trading edge and will thus cause you to have a very difficult time making money. The underlying point here is that you need to always make sure your actions in the market are in-line with the FACT that you never know for sure what is going to happen. By pre-defining your entry and exits and letting the market then play-out you are trading in-line with the fact that you do not know what will happen. But, when you move your stops and targets all around after the trade is live you are ignoring the fact that you do not know what will happen and you are acting as if your actions in the market will somehow cause the market to do what you want it to. Here’s the point: master your Forex trading strategy, develop a trading plan, then trade your plan and let the market do the work.
Patient traders know exactly what they are looking for in the markets
If you know exactly what your trading edge looks like and how to trade it there is no reason to not be a patient trader. In fact, by thoroughly mastering an effective trading edge like price action trading, you will find that you naturally increase your patience in the markets because you will know what constitutes a high-probability trade setup and what does not. Some traders decide to trade with no patience and thus gamble all their money away, other traders become skilled trading ‘snipers’ and perfect their trading strategy and trade the markets with a high-probability trading edge that is realized through the consistent application of patience. Remember, this is only possible if you are totally clear on exactly what your Forex trading edge looks like and how to trade it. For more on trading like a sniper check out my trade forex like a sniper not a machine gunner article.

Patience is critical before, during, and after a trade
We have talked about having patience while your trade is live and briefly about having the patience to pre-define your entries and exits. We have not talked about patience after a trade however, and it is at this time that you really need a lot of patience. Most traders feel some level of emotion after a winning or losing trade, the emotions are different of course, but no matter how much money you put on the line you probably feel either euphoria or disappointment, depending on whether you won or lost on the trade.
It is at this time, directly after a trade closes out, that you really need to step back and separate yourself from the market. You need to have the patience to not jump right back into the market on the emotion you are most likely feeling after a winning or losing trade. This is something you can write into your Forex trading plan. At the very end of your trading plan you can include a line that says something like “I will close down my trading platform and remove myself from the markets for 12 to 24 hours after any trade closes out”, or something similar. This will help to make this a habit and will work to reduce the amount of emotion-based trades you make.
Learn to enjoy and embrace being a patient trader
Sitting on the sidelines is a profitable position….by having patience and not trading, you are further ahead than you would be had you traded and lost…never be in a rush to trade because the market will always be there tomorrow…when in doubt stay out because it is a much more lucrative position to be in than to lose money.
Learn to enjoy and embrace the patience that is necessary to trade successfully. Once you begin to think of patience as the ‘most important ingredient’ to trading success, and actually understand how and why being a patient trader can actually make you money faster, you will have no problem waiting for the best trade setups, because you will feel like you are actually making money by not trading, which technically you are if it means you are avoiding low-probability / losing trades. So, you need to ‘trick’ your brain into believing that patience is how you make money…not trading a lot, because as humans we are naturally wired to want to trade a lot, thus you need to use your frontal lobe / planning part of your brain to allow logic and common sense to develop the positive habit of patience into your wiring, then it will become second nature and your trading will be relaxed and profitable. To learn how to trade simple yet effective price action strategies off the higher time frames that will allow you to relax and develop a patient trading

‘Gun To The Head’ Forex Trading Tactics

Today’s article is going to revolve around one simple question:
If someone held a gun to your head and told you that your next trade was a matter of life or death, what would you do?
My hope is that today’s lesson will make you think a little differently about each trade you take. Many traders get lazy with their trades, and they fail to see the potential risk in each trade they take. Every trade you take will affect your account balance at year’s end, and whilst trading success is defined over a long series of trades, each trade you take is a part of that series. The point is that if you are being lazy and careless on a lot of your trades, it’s going to affect your overall trading results. By imagining that your life literally depends on every trade you take, you are far less likely to gamble your money in the markets.
Many traders simply get too comfortable with the ease of access of the Forex market; they forget that if they’re not disciplined and careful they can lose all of the money in their trading account. Often, traders get into a zombie-like state once they start trading with real money, blinded by the allure of fast money and seemingly ignorant to the fact that they can lose on any trade they take. You need to break these bad habits, and if you take on this ‘gun to the head’ approach to every trade you take, it just might give you the extra push you need.
‘Gun to the head’ Forex trading means that you trade as if your life depends on it; perfect analysis and perfect execution of the trade, from start to finish. There is no room for error or doubt in ‘gun to the head’ Forex trading; you will put your best foot forward and lay all your cards on the table every time you enter the market.

Trade as if your life depends on it…

Your trading account DOES depend on it, and ultimately your life too, if you really want to become a full-time trader. So, why are you still gambling, over-trading, and slinging your money around carelessly in the markets?
Professional traders inherently trade in a ‘gun to the head’ manner; they don’t trade unless there is a damn good reason to do so…AKA unless their trading edge is present. Seems like a very obvious point, but you know as well as I do that it’s VERY easy to just enter the market on a whim when your edge is not truly present. This is more like playing Russian roulette with your trading account than trading as if you know FOR SURE the NEXT bullet is THE ONE.
The more I progress in my career as a trader, the more I develop a habit of passing on trades. Meaning, I like to pass on trade setups that don’t meet my very stringent criteria. I prefer to wait for something more perfect, more obvious, and thus higher probability. I have no problem doing this because I don’t define my trading success over 1 week or 1 month, rather I gauge my success or failure in the markets at year’s end. I know that to be profitable at the end of the year I need to be patient and disciplined on every trade I take; I trade like someone is pointing a gun at my head and screaming at me that if I don’t make a profitable trade they will squeeze the trigger…this is how YOU SHOULD trade too.

If you had a gun to your head…you’d say “No” to A LOT more trades.

Many traders tend to enter the market out of boredom of waiting for a high-probability setup to come along, or simply because they ‘want’ to trade. These are mistakes that you probably would not make if some large burly gentleman was actually holding a gun to your head threatening to pull the trigger if you enter a losing trade…
In fact, I am willing to bet that if this ‘gentleman’ was actually holding a gun to your head on every trade, you would trade with more patience, precision, and discipline then you ever have before. So the question becomes…if you CAN trade this way…why AREN’T YOU? Answer: Your mindset isn’t right. You need to obtain a profitable forex trading mindset, and a profitable Forex trading mindset is one that does not easily give into temptation, or trade carelessly, or become lazy. A profitable Forex trading mindset is one that is disciplined and patient, and that does not forget about the risk involved with every trade they take.
Don’t mistake the ‘gun to the head’ Forex trading approach as one that makes you feel pressure to enter a trade. In fact, the idea is to imagine that someone is holding a gun to your head and that they will pull the trigger IF you enter a losing trade. So, essentially, by simply never trading, you would live…AKA not lose any money. That alone is a very profound notion that many losing traders should dwell upon for a moment.
Also, I should point out that even if you are employing ‘gun to the head’ trading tactics, you can and will lose trades sometimes; it’s just part of the game and something you have to learn to not get emotional about.
The ‘gun to the head’ trading approach means that we don’t want to feel pressured or stressed to enter a trade, because the safest route is always to just not enter the market. However, that doesn’t mean we should be afraid to enter the market…it just means that if we have any doubt about a setup, we don’t trade. If you’ve mastered a strategy like price action trading, and you’ve been successful with it on demo, you really shouldn’t have any doubts as to when your trading edge is present and when it’s not. We just want to develop a routine where we can sit patiently on the sidelines and then ‘ambush’ the best setups when they arrive. If you really had a gun to the head that was threatening your life if you lost on a trade, you would have no problem saying ‘No’ to a ‘so-so’ trade, and you would not forgot that another setup is probably only a day or two away.

Use ‘gun to the head’ trading tactics to remain a disciplined trader

Most of the time, traders begin their trading journey full of enthusiasm and positive trading habits. Then, slowly but surely they fall off course after a few big losers, and they soon find themselves in a perpetual state of trying to get their trading account back to breakeven. Typically, traders get into this state by making ‘dumb’ trading decisions like risking more than they know they should on a trade or by taking a low-probability trade setup instead of passing on it. It’s fairly safe to say that you would be far less likely to fall into this rut of trying to get back to breakeven if you really traded as if each trade you took could result in life or death. Obviously, you will continue to live if you lose on your next trade, but the point of this article is that you need to avoid getting lazy like most traders do, and make sure you don’t forget the importance of staying on top of your trading game. Thus, it may help you to imagine someone is holding a gun to your head on every trade you take so that you don’t fall off track and get stuck in an emotional trading cycle.

Here’s a ‘gun to the head’ trading scenario…

…You start by imagining yourself in a real situation where someone is holding a loaded gun to your head; they are telling you that your life depends on this next trade being a winner. After you get into that state of mind, you should decide if that setup is one you’d be willing to trade, given the consequences of a loss. Thus, if you don’t feel totally confident in the trade, and it doesn’t meet your trading plan requirements…you simply don’t trade, and you ‘live’ to trade another day.
I suggest you play out a scenario like this in your head before you enter any trade. Disclaimer…do not ever actually use a real gun in this scenario…I know that sounds crazy, I just have to say that for legal reasons. This is all just meant to get you guys thinking…I really want you to take your trading more seriously, after all, there is money on the line here. If you view your money as time, then your life actually is on the line whenever you enter a trade…because you can lose your money / time if you lose a trade. So, you don’t want to risk any of your ‘life’ on a less than high-quality trade setup…it’s just not worth it.
The ‘gun to the head’ Forex trading technique will lead to less mistakes and less trades, but it will also decrease your doubts and fears, and ultimately put you on a faster track to trading success. To trade in a ‘gun to the head’ fashion, you’ll have to overcome your fear of losing and of risking money…because part of the ‘gun to the head’ trading method, is that you can’t hesitate…when you’re setup is present you trade it flawlessly, without second guessing yourself.
Many traders cannot even get to the point of being able to trade in a ‘gun to the head’ manner simply because they don’t know exactly when their edge (strategy) is present and when it’s not. Using confusing and messy indicators will cause this problem. Thus, the first thing you need to do is make sure you have an effective trading strategy down, only then can you really start to pick and choose your trades like a sniper and trade in a ‘gun to the head manner’. By learning the kind of price action trading strategies that I teach my students in my Forex price action trading courses, you’ll gain knowledge of an effective yet simple trading method that lends itself well to ‘gun to the head’ trading. Price action allows you to filter the ‘good’ trades setups from the ‘not so good’ trade setups with immense clarity and confidence.
I have found that simply ‘trading less often’ and ‘passing’ on a trade setup when I see something I don’t like or something that does not look 100% perfect,  has kept me out of a lot of bad trades over the years. Ultimately, if you really trade in a ‘gun to the head’ manner, you will end up passing on a lot more trades than you do now and that will most likely lead to a dramatic increase in your winning % and your overall profits.

Why You Should Trade End-Of-Day, Not Intra-Day

Many traders email me asking how they can trade with their busy schedule or saying that they don’t have time to sit in front of their computer watching the markets all day. My answer is usually something along the lines of: “Well you don’t have to sit in front of your computer all day if you learn to trade end-of-day Forex strategies”. Now, by ‘end-of-day’, I simply mean after the New York close; it doesn’t have to be exactly at the New York close, but generally there’s a large gap of time between the NY close and the London open where trading is very quiet (the Asian session), and this is the best time to analyze the daily charts and make your trading decisions. This is what I mean when I say “end-of-day trading”.
You might be wondering why I am not a big fan of intra-day trading. Well, the reasons are pretty simple; there is more random price movement or market ‘noise’ on the intra-day charts, and they thus contain more ‘clutter’ and are just more difficult to trade than the daily charts. For a skilled trader who is already successful, intra-day trading might be something to consider. But, if you are a beginner, a struggling trader, or simply someone who doesn’t have a lot of time each day to devote to trading, trading the daily charts in an end-of-day manner is going to be your best option.

Keep your day job

End-of-day trading basically allows you to fit in trading around your schedule, whatever it may be. You can keep your day job with no problems. Many people seem to think that if they can’t sit and watch the markets all day then they can’t trade, this is simply not true.
In fact, being away from the market is actually good for you – this is a ‘hidden’ advantage to end-of-day trading. Since you won’t be as involved with the markets you will have a ‘natural filter’ against over-trading and this will likely increase your bottom line at the end of the year. It’s a statistically proven fact that low-frequency traders make more money over the long-run than high-frequency traders, on average.
As an end-of-day Forex trader you can live your life exactly as you are now, but instead of spending 30 minutes watching television at night, you can simply analyze the markets according to your trading plan and look for price action trading setups. It might seem too good to be true, but really it’s not; the truth of the matter is that once you learn an effective trading strategy and develop into an effective trading plan, you really do not need to spend hours analyzing the markets each day.

Less clutter on your charts and in your brain

Humans have a tendency to make trading far more complicated than it really is. I am not saying that trading is ‘easy’, because as we all know it’s not easy to make consistent money in the markets. But, most people make the entire process of trading far too complicated, and really the analysis part of trading is actually very simple. The difficult aspect of trading lies in taking profits and remaining unemotional. Deciding to enter or not is the easiest decision you have to make in the markets; essentially it all boils down to this; there’s either a signal or there’s not.
Once you have learned and mastered an effective trading strategy like price action, you then need to formulate it into a trading plan. After that, it’s as simple as checking the markets each day after the New York close and seeing if your trading edge is present. Once you develop this into a routine it really should not take more than 30 minutes or so for you to decide if there’s a signal worth trading. I get emails from traders everyday telling me they are frustrated and confused and then they tell me they are using forex indicators and checking the markets all day…they simply cannot see the forest for the trees! Meaning, the REASON they are frustrated and confused is because they are over-complicating the easiest part of trading, which is analyzing the charts and looking for a trading signal.

More ‘bang for your buck’

What I mean by ‘more bang for your buck’ is that by being a daily chart end-of-day trader you are making more effective and efficient use of your time. Since daily chart signals are more powerful and contain more ‘weight’ than intraday signals, it means your time is better spent analyzing the daily charts after the NY close where you can simply check the markets for a signal real quick and then walk away. Any signal you find is likely to be much more significant than a signal you may have found earlier in the day or night on an intra-day chart. Thus, you are getting more out of spending less time in the markets by focusing on the daily charts rather than sitting at your computer all day trying to trade the intra-day charts.

HOW to trade end-of-day

Another email question I often get is “How do I trade end of day” or “What is end of day trading”? So, this next part should clearly answer those questions, and if you email me about it I am going to refer you to this article ! So, let’s discuss how to trade Forex (or any market) end-of-day:
Remember this: 30 minutes a day is all you need to analyze the markets and find your entry or manage your trades:
• It ALL starts with the signal - You scan your favorite markets and first look for a clear signal of one of the setups in your trading plan. After you have mastered your trading strategy this should be a very easy and quick task, taking no more than about 10 to 15 minutes. You are simply looking at the daily chart time frames for obvious instances of your trading edge. If nothing stands out to you after 10 minutes or so of analyzing the markets, there probably is nothing worth risking your money on. Where traders get into trouble is when they don’t see an obvious signal right away and then keep looking until they convince themselves there’s something worth trading, even though there isn’t. This is a very easy trap to fall into and you’ve got to ignore that temptation to ‘dig up’ something to trade when there is nothing ‘ripe’ staring you in the face.
• Looking for levels – Match a signal up to a level; if you find an obvious price action setup the next thing you’ll do is see if it lines up with any obvious level(s). You’ll have to draw in the key daily chart levels at the start of the week and then analyze and adjust them if needed each day after the New York close. This is also not something that will take much time after you get some education under your belt and understand what a key level is vs. a level that isn’t as significant. Here’s a video on drawing support and resistance levels.
• Gauge market conditions – Is the market trending or consolidating…? If it’s trending is it in a strong trend or is it slowly grinding higher or lower? Is the market in distinct trading range? Where are the obvious key boundaries of the trading range? Make sure your signal makes sense in the context of the current market conditions. For example, maybe you see a decent looking pin bar strategy but it’s against a very strong trend…probably not the best setup then.

• Make your own daily commentary – Making a daily commentary of your favorite markets is a good way to get an objective view of the charts each day. Using the guidelines in your trading plan and the three points above, go over your favorite markets each day and make notes about what you see, actually write or type it out so that it becomes a habit. Then once you finish with your top 5 or 10 favorite markets, go back and re-read your comments and see if anything really stands out to you. This process will give you a good overview of what’s happening in the market and will help you better understand the overall market picture and whether or not anything is worth trading…it will help you stay “in tune” with the markets and will work to develop your discretionary trading sense. This is one of the biggest things that helped me become successful in the markets.
• When you’re done, you’re done – Once you go through your daily ‘end-of-day routine’, you have two possible outcomes: there’s either a trade or there’s not. Either way you should walk away. You either enter your trade parameters or you do nothing, and either way you should leave your charts until the next day, then come back and see what happened. This act alone will almost completely cut out the temptation to over-trade, which is most trader’s biggest downfall. You aren’t going to help anything by looking at the markets and staring at your trades. Sure, you might nip a couple of would-be losers early, but in the long-run you’re only going to end up cutting your winners short, closing trades at breakeven, and generally just interfering in your trades when you shouldn’t.
This 24 hour break from the markets shows that you release your arrogance and that you truly understand you can’t control the markets. Let the market do the work for you, you should have already accepted your risk on the trade…you should basically assume you are going to lose on the trade, so that every time you come back the next day and see a winning trade it’s a nice surprise, and a loser is not a disappointment but rather something you already expected. It’s when people expect to win on every trade that they start becoming emotional.

Summing up the end-of-day trading strategy

So, as you can see, end-of-day trading is not only a good strategy, but it’s also a philosophy. The philosophy of not being glued to your charts, of accepting that the market will do what it wants, and of generally just being less involved with the markets is a mature trading philosophy that shows understanding of how the markets work and of how the trading game is won. It really allows you to release that ‘need’ to be right and to control everything in your trading. So, even as you become more experienced and perhaps want to trade lower time frame charts, this philosophy of briefly checking the markets for your trading edge, making a decision and then walking away, will still benefit you and can still be used. This philosophy is at the heart of my personal trading style and you can learn more about it in my Forex trading course and members’ community here.

Trade Forex Like a Sniper…Not a Machine Gunner

Today’s Forex Lesson is “Awesome”. In fact, It’s probably one of my best trading lessons I have ever written. It took me at least 2 days of brain power and probably 20 coffees.  Please pay it forward, share it with others. Enjoy.
A sniper in the military has an edge over his or her enemy; their edge is unwavering patience, mastery of their weapon, and the ability to remain consciously in control of their mind and body for long periods of time in high-stress situations. We can apply these same concepts to Forex trading…
Forex trading is very similar…you need a trading edge (weapon), you have to master this edge, you need to develop and maintain rigid self-discipline and control, and you have to execute your edge flawlessly in the face of constant temptation to over-trade and over-leverage. Now, trading is nowhere near as stressful as war, but it still requires conscious control of mind and body.
Those traders who learn to pick and choose their trades wisely, trading like a Forex “sniper”, are typically the ones who succeed long-term, whereas those traders who act like machine-gun traders by shooting at everything they see (trading too much), tend to run out of ammo (money) very quickly and fail to accomplish their goals in the market. Let’s discuss how you can learn to trade like a sniper instead of shooting at everything (taking every trade) that comes your way…
• Accept that less is more in Forex trading
One of the things that we traders can learn from a sniper in the military is that in certain situations less is indeed more. Forex trading is definitely a “situation” where less is more. However, it is very common for beginning traders to feel that more is better; more Forex indicators, more trades, more analyzing, more money on useless trading robots, etc.
What is the result of such misinformed beliefs? The result is almost always over-trading; indeed, most beginning Forex traders are like machine-gunners; spraying bullets (money) at everything they deem to be a trade and likely causing more damage to their trading accounts than good. The first step that you need to make if you want to trade more like a sniper and less like a machine-gunner, is to truly accept that less is more in Forex trading.
Just like a sniper waits patiently for his or her pre-determined target to come into view; you need to learn how to wait patiently for your pre-defined trading edge to show itself in the market. As price action traders we have a very effective trading edge that allows us great opportunity to trade the market with sniper-like precision, and the daily charts provide the best “battleground” for us to execute our edge on.

• Higher time frames
As I mentioned previously, the daily chart should be your “battleground” for developing your ability to become a Forex sniper. Why, you ask? Because it is the daily chart that gives us the “highest value” or highest-probability targets when compared to any time frame below it. Weekly charts are also accurate, but they don’t give us enough targets each month and they are less practical to trade than the daily chart.
These targets are price action setups, and you should think of them as higher-value on the higher time frames, because in reality the higher the time frame the higher-probability the setup becomes. This is the primary reason that trading higher time frames drastically increases trading success. Think about it this way; a sniper is on a pre-planned mission to take out high-value targets that can change the course of a war, and in Forex trading you should be looking for the highest-probability trade setups that can have the greatest positive impact on your track record.
Machine-gun trading the lower time frames is not going to do anything but cause you to lose all your ammo or money a lot faster than you think. There is really no sense in ever trading any time frame below the 1hr chart since the value or probability of the targets or setups decreases dramatically as you move lower in time frame. You want to stick to the high-value or high-probability setups of the daily chart as much as possible, and especially while you are still learning to trade.

• Patience
If there is one thing that a sniper in the military definitely IS, it’s patient. Patience is like the “magic” ingredient that makes everything work for a sniper in the military, and it is also the “magic” ingredient that you will need to use if you want to become a Forex sniper. Most beginning traders lose money in the markets, and most beginning traders are also anything BUT patient. See the connection here?
There is a tendency for traders to want to “force” the issue of trading by manifesting signals that aren’t really there or by jumping into a signal that has not closed out yet. When it comes to money it is human nature to be impatient, this is otherwise known as greed, but if you don’t learn to become a patient Forex trader, you will never forge the type of overall self-control that it takes to succeed as a Forex trader and become a Forex sniper.

• Mastery of strategy
A sniper will train for years to sharpen and perfect his or her shooting skills, and a sniper knows exactly what their target looks like and pulls the trigger without hesitation. Similarly, you will need to “train” with the particular Forex trading strategy you choose to employ in the markets so that you know EXACTLY what you are looking for every time you open your charts. However, you will need to do more than that; you will need to truly MASTER the Forex trading strategy that you choose, because if you don’t master it, you will never achieve your full potential as a Forex sniper.
Mastering a trading strategy begins with education. If you choose to employ high-probability price action trading strategies, I can provide you with the Forex trading training you will need. However, you must put in the time and effort to learn and master it; I cannot do this for you. You need to be realistic about this, it will take time; it takes time to become a master at anything, and Forex trading is no different. But, if you put in the necessary time and take advantage of the insights discussed in this article, you will begin trading like a sniper sooner than you might think.
• Developing a sniper-like Forex trading mindset
Sniper-like Forex trading breeds confidence and discipline. The more you strive to trade like a sniper and less like a machine-gunner, the more your Forex trading confidence and discipline will improve. This is because you will be rewarded for patience, and as you start to see your patience pay off over time, you will want to maintain it.
It is the initial stages of developing a sniper-like Forex trading mindset that most traders fail it, usually because they do not understand the power of patience and discipline. It tends to feel better to be a machine-gun trader because you feel powerful and “in control”. The problem with this mindset is that you can never control the market, in fact, the more you try to control the Forex market the more it will actually control you. The only thing you CAN control is yourself by learning to trade like a sniper, and if you do this you will significantly increase your chances of success as a Forex trader.
Trading Like A Sniper is part of my ‘core trading philosophy’ that I teach my students. If you want to learn more about becoming a disciplined price action Forex “sniper”, check out my forex trading course and traders community here.

What Crocodiles Can Teach You About Forex Trading

Here in tropical Australia, the saltwater crocodile is a fearsome and intelligent predator known to wait patiently for days or weeks on end until unaware prey come to the water’s edge and become its next meal. Crocodiles are by many accounts the most successful animal that has ever lived; they’ve been around for about 200 million years and have out-lived the Dinosaurs, and they’ve evolved over time to become perhaps the most successful predator on Earth, next to humans.  Crocodiles are opportunistic predators; they’ve been known to learn the behavior of their prey and lie in wait for long periods of time almost to the point of starving, and then when the time is right they snatch their prey with confidence and precision.

In fact, it is quite common for people to swim with these animals for days or even weeks without any sign of aggression, until one day somebody goes swimming, fishing or even walking, and they never return. This demonstrates real-world evidence that one of the oldest and most methodical predators on Earth is also one of the most patient and disciplined that has ever lived. Darwin’s survival of the fittest theory certainly favors this creature; they’ve been around since Dinosaur times because their method of hunting and adapting is so successful. The salt water crocodile is perhaps nature’s ultimate “sniper”… it only needs to eat once a week or so because it makes high quality kills rather than a high quantity of low-quality kills.
As traders, there’s a ton of things we can learn from the crocodile, let’s discover some of them…

Crocodiles are a trader’s best role model

The crocodile is actually our best role model as traders; their behavior is really the perfect metaphor for how a trader needs to behave. We are without doubt predators, not just trading predators, but as humans we are naturally built and function as hunters. As traders, we must copy the crocodiles’ methods of hunting; we must be disciplined, patient, adaptable and methodical in our approach. Crocs have also demonstrated an ability to learn quickly and avoid risky situations as we will discuss more about later, these are also things that we need to do as traders.
Think of the crocodile…he’s big, fat, long and needs A LOT of protein in his diet to survive, to swim and to hunt. Is his energy best spent going around all day eating little bait fish which are easy to catch? Imagine how much energy he would expend trying to catch a high quantity of low-quality prey like that all day. If you have ever seen these crocodiles like I have in person, you will understand what I am saying; crocs are designed and have evolved to be patient “sniper” hunters…many little meals do not interest them as much as a big juicy nourishing meal does.
By trading less… our aim is to make a nice large “meaty” size trade that sustains us until our next trade. Sure we may have a few losses along the way to our big prize, but the goal here remains clear; waiting on the sidelines (or the shores of the river like the crocodile) to pounce on our prey and cop a huge nourishing meal. We don’t want to be running all over the pond or river looking for any small piece of meat or fish that we can find…we are going to wait it out and score ourselves a nice big juicy profitable trade (or in the crocodiles case, probably a kangaroo, a dog, or maybe even a human).
There is an expression in the English language that most will have heard at some point in their lives: “All good things come to those who wait”. This phrase is merely discussing the merits of being patient, possibly frugal, disciplined and well planned, but its implications are profound and very true for both the crocodile and the trader.
It may shock some of you to know that nowadays I may trade only 3 times per week or even less some weeks. You’re probably thinking “That’s not enough trades to make money”, I don’t blame you for thinking that way and it’s easy to think that way with most mainstream Forex websites pumping day trading and high frequency trading. But, my own personal experience is that it’s much more lucrative to wait patiently for high-quality trade setups than it is to stay glued to your charts all day and night trying to trade everything you can find.  The best trades are obvious, they almost “talk” to you and tell you to trade them, once you know what you’re looking for this will become apparent to you.
For definitions sake I would refer to myself as a swing trader and a trend follower. I attempt to capture the larger moves that occur over multiple trading sessions or possibly multiple days or weeks. In this way, I am very much analogous to a crocodile in my trading, in fact I might even buy a picture of a crocodile and hang it up in my trading office to remind me of how successful a predator the crocodile has been throughout history and most importantly, why it is so successful.

Crocs have a high strike-rate

It’s fairly safe to say that if a croc gets its jaws around its prey, the prey is not getting away.
Crocs have a good strike-rate because they are patient and wait for the “easy” opportunities and then act with confidence and speed…they don’t hesitate. Whereas a Lion might have many failed hunting attempts trying to catch a Gazelle or some other quick animal, expending a lot of energy in the process, crocs tend to have less “losing trades” or failed hunting attempts…because they don’t waste time or energy…they wait and wait and control themselves with precision until their prey almost walks into their mouth…then they feed.
As traders, waiting and being patient can increase your strike rate. Controlling ourselves is really all we can do as traders…we cannot control our “prey” (the market)…we can only conserve our money and wait patiently until our trading edge presents itself. This is how you get a high strike rate as trader, not by trading a hundred times a week in some futile effort to “scalp” the markets.

Crocodiles are good at avoiding risky situations; they learn fast

Crocs “…learn quickly and adapt to changes in their situation. They particularly learn to avoid dangerous situations very quickly”, according to the article The Extraordinary Lives of Crocs. The article went on to discuss that this ability of crocs to learn quickly and avoid dangerous or risky situations is yet another reason they’ve outlasted the dinosaurs and are still thriving today. Avoiding risk is one way that a species can survive over time and “win” the evolution battle of the fittest. Similarly, not taking on more risk than is necessary as well as learning quickly are two very important keys to becoming a successful Forex trader.
I have said many times before that risk management is KEY to becoming a profitable trader. Some traders don’t learn quickly like crocs do, instead they repeat the same mistakes over and over until they blow out their trading account. Even though we are clearly far more intelligent than crocs, we have a lot more emotions too, and these emotions often cloud a trader’s “gut feel” and cause them to hesitate, second-guess themselves and over-analyze the market. A croc does not second-guess itself…it’s simply such a fine-tuned predator that being patient, disciplined and executing with confidence are in built habits.
As traders, we need to learn from our mistakes, and fast, because money is on the line. Our version of “avoiding risky situations” is not over-trading and not risking too much per trade.

Conserving energy for the next kill

The crocodile waits for the big meal because it makes more sense to wait and conserve energy by eating a large chunk of protein less often. The croc conserves energy and time by eating this way and it also is one of the main things that have ensured the survival of crocodiles over hundreds of millions of years during many periods when food was scarce.
If you think about not interfering with your trades as helping to make you money, it might make it easier to do. I actually imagine that I am making money by not trading and by simply doing nothing, because by not losing money from over-trading and over-involvement…technically you ARE making money. A crocodile would probably eat less food overall if it was constantly running around trying to find small prey, the crocodile intuitively knows that by being patient and disciplined it has a better chance at getting a higher-quality meal. The crocodile “knows” itself and its own limitations and uses its strengths to its advantage. Indeed, the fact that the crocodile has been around since dinosaurs walked the Earth is evolutionary proof that the concept of patience and discipline most certainly pays off.
The crocodile intuitively knows that it needs to conserve energy and wait for a big kill, this patience is actually a “skill” for the crocodile and it’s also a habit that has developed and reinforced in crocs over millions of years of providing them with large tasty meals. Longevity is critical to a trader; we need to conserve the money in our trading accounts so that when the “easy prey” or obvious trades come along we can get the most out of them. If we go around trading everything we see we will shrink our trading accounts and we won’t have enough money in our accounts to get the most out of the high-probability signals. Just as if a croc ran around all day trying to catch smaller prey it would not have the energy or positioning to grab the bigger and better prey.

Crocodiles are highly adaptable

Crocodiles learn quickly and adapt to changes in their situation. This is a large part of how and why they have survived for millions of years whilst many other animals have become extinct during that same time. According to the article I mentioned earlier ‘The Extraordinary Lives of Crocs’; “…crocodile researchers often have to change their capture techniques because it’s very hard to catch them [crocs] with the same trick twice.”
Many researches think that the adaptability of the crocodile, including its ability to “ignore” hunger for long periods while it waits patiently for the “perfect” feeding opportunity, is one of the main reasons they survived whatever killed off the dinosaurs. It’s clear that the crocodile’s ability to adapt to its environment and to changing situations is one of the reasons it has survived and thrived for millions of years.
As traders, we have to adapt to changing market conditions, and as we’ve already discussed we need to have ice cold discipline to only trade when our “prey” is ripe for the taking. One of the beautiful things about price action trading analysis is that it’s an inherently adaptable trading strategy. Whereas many trading systems are rigid and make you stick to a strict set of rules or conditions, price action analysis gives you more of a “framework” to work off of when analyzing the markets and this framework can be used to trade any market condition  as well as adapt to changing market conditions.

 “Crocodile trading” should become a habit for you

In the past, I have written about the value of patience and how it is the core attribute of some of the greatest traders that have ever lived. I have put forward the argument on many occasions that ‘less is more’ and I think in today’s market conditions that statement is even more relevant. Over the years I have written countless articles which discuss how to implement a patient trading approach. My favorites being, “Trading like a sniper and not a machine gunner” and “The minimalist guide to trading”.  Hopefully many of you are really starting to connect the dots by now and have discovered first hand just how powerful these concepts are and what they can do for your overall trading performance and profitability.
It’s almost funny that it’s taken me until now to write an article on what traders can learn from crocodiles considering I live in Australia where crocs are world-famous and plentiful. Furthermore, almost every behavior of a crocodile directly parallels what it takes to be a successful trader, the similarities are almost uncanny. The crocodile is nature’s proof that “less is more” and that waiting patiently for the higher-quality opportunities is a recipe for success. This recipe has kept crocodiles thriving on the Earth for 200 million years, and it can and will help you thrive in the markets if you use it properly.
It’s critical for the crocodile to understand its prey and to know where to look for it and remain calm and patient until it arrives. As traders, we have to know what our trading edge looks like and where to look for it and then control ourselves enough to not over-trade before it arrives. If you want to learn more about this “crocodile trading approach” and fully understand your “prey” (price action strategies) then checkout my price action trading course. My trading course and other members’ content essentially models and teaches you how to “trade like a crocodile”; in a patient and methodical manner with a mastery of your “hunting” skill.
If you enjoyed this lesson, please leave a comment below, click the ‘like button’ and share it with friends.
Good trading, Nial Fuller – “The Croc Trader”