Psychology of Trading Forex - Getting a Handle on the “Trading Psycho” In You
Today I have an article from a colleague of mine which I felt important to share with you.
Enjoy and have a great weekend!
Cheers
Brian
P.S At the end of the article, you’ll find a link to a FREE video about 5 damaging myths about trading. Enjoy!
Get Hold Of The ‘Trading Psycho’ In You And Take Your Trading To A New Level.
Of course we aren’t Psychos! Nonetheless I want to direct your attention to the most powerful technology for producing positive changes in your trading. What’s that? NO, this is not a Whiz Bang indicator or new method. Each of us has this but few invest the time or manage this properly. What is it?
It is OUR MINDS!
That 6 inch space that rests between our 2 ears that leads and directs our every action. EVERYTHING you do in your trading EVERY DAY starts as a thought! And I’m here to tell you after working with traders for over 14 years, it is simply a GAME CHANGER when managed properly. Let’s look first at how we can optimize our minds through Trading State Management.
What is Trading State Management?
State Management is ESSENTIAL to successful trading. What do I mean by “State Management?” Quite simply, State Management is the recent trading events that can affect your Trading State. State Management focuses on the notion that how you FEEL affects how you perform. Losses can make it harder to execute entries, because you break exit rules and stop placement rules. Winners can take you on a euphoric ride of “I am super trader hear me roar!”…and lead you right into an impulse trade, death trap. This death trap can spiral faster than a politician retracting a provocative statement.
Your “State” refers to the psychological – emotional frame of mind and even your physiological condition. After a losing trade, do you find that you are slumped down in your chair? Is your breathing shallow? What about your internal dialogue? IS the dialogue defeating and negative, instead of positive and supporting?
Think RIGHT NOW for a second about your internal dialogue! That dialogue is the little voice that reprimands you after losses and tells you “AFTER THE TRADE” what you should have done differently! We can question our actions on EVERY trade when it’s over; however, these questions are not very constructive.
When was the last time you followed the rules of your trading system EVERY SINGLE DAY for a solid week? What’s that? You don’t have a system? NO trading plan? YOU NEED a structured series of ‘IF this THEN that’ statements which help bring quantifiable organization to what you do in the markets BEFORE risking your hard-earned capital.
When I bought my first system I was thrilled after seeing the back tested performance. I calmly ran test numbers in my spreadsheet showing that I had easily increased contracts. By the end of the year I was visualizing paying cash for that Benz I’d been slobbering over. Yet, I was crushed when after just 1 week my REAL numbers didn’t look anything like my tested numbers!
OF COURSE it was the system, the markets, the FED, my broker, oh…and also my dog that caused all of this and NOT ME! I quickly found those were all wrong answers and I didn’t follow the SIMPLE rules. I started asking WHY I jump out early, trail stops too tight and SKIP trades completely which keep changing the course of my research. Here is what I found:
The combination of the ‘Internal Dialogue’ and your ‘Outward Physiology’ all ABSOLUTELY affect your decisions regarding the next trade setup and thus your ability to execute your trading plan. Knowing this information places you FAR ahead of the game. When you are aware of something in your internal dialogue and physiology, you are able to address it, making the appropriate and necessary changes to affect positive outcomes.
Why is Trading State Management Important?
In the most obvious terms, managing your trading state will dictate the consistency in your trading. Whether it is consistency of execution, pattern recognition, equity growth, or positive mental health; TSM will put you in control over your emotions. These emotions have the largest impact on trading consistency. REMEMBER! The most powerful trading system out there is useless in the hands of a trader who CHOSES not to follow the rules!
The Most Important Element is YOU.
Your ability to recognize this as fact and then ACTIVELY work to MANAGE your TRADING STATE will be directly correlated to your long-term success in ANY market and in much of day-to-day life. Working with traders for the last 14 years - from the newbie to the 3-5 year veteran, proprietary trading firm and Hedge Fund traders - I have seen convincing and unmistakable evidence that those who accept these concepts have a SIGNIFICANTLY higher probability of long-term trading success when compared to those who continue the search for Whizz-bang Trading System #18.
Facts to Ponder
Jack Schwager, after writing two books (Market Wizards and New Market Wizards) in which he interviewed some of the world’s top traders, (36 of the interviews made up the 2 books) made the following statement at the end of Book 2; “Time and Time again, those whom I interviewed for this book and its predecessor stressed the absolutely critical role of psychological elements in trading success!”
When asked to explain what was important to success, Jack says, “The Market Wizards NEVER talked about indicators or techniques, but rather about such things as discipline, emotional control, patience and mental attitude toward losing.”
The message is CLEAR: The Key to winning in the market is internal, NOT external.”
Need more Proof?
Ed Seykota, an industry recognized trader and lecturer, once taught a college course in trading that lasted ten weeks. He spent the first week of the class teaching basic information about trading. He spent another week teaching the class Donchian’s 10-20 moving average crossover system.
However, he needed the remaining eight weeks of the class to convince the students to use the system that he had taught – to get them to work on themselves enough to accept the losses that it (or any other good trading system) would generate. So, we have concrete evidence from over 40 traders who cumulatively have earned BILLIONS of dollars in this business that we pursue every day telling us CLEARLY that long-term success in the markets is INTERNAL.
Yet, we as traders continue to invest our time and energy staring at charts and buying new EAs, going from live trading room to live trading room searching continuously. What if we just STOPPED the insanity and LISTENED to the obvious message from those who have done what we seek to do? They didn’t have a little success but rather HUGE and SUSTAINED successes!
That speaks volumes and puts me on a different path which changed the way I view the markets and trading.
By Todd Brown
The Trading Authority
Did you know that there are 5 myths many traders believe that severely hurts their results?
Find out if your trading is being affected,
Click here to access a FREE video about them
[Trading Psychology Training] - Today is Your LAST CHANCE -Your Trading Results May Depend On It..
This is your last chance - after today, you miss out…
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You’ve been watching and waiting.
Maybe you’re asking yourself, “How much has my lack of discipline
REALLY already cost me - in dollars?”
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Cheers
Brian
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Forex Strategy - USD/CAD Short Trade Still Open…
This video was just posted by Bill Poulos that shows a day-by-day analysis of a killer short Forex trade on the USD/CAD pair…
* It already hit the first profit target…
* It’s still open, so you can follow along to see what happens…
It looks like this was recorded for his students, so I’m not sure how long he’ll keep it online here:
Click here to check availability
Cheers
Brian
“The Trading Turnaround Coach”
P.S. Watch closely how Bill uses what he calls a “buffer” to prevent his stop loss order from getting hit accidentally. It makes a lot of sense.
P.P.S. There’s still time to get in on Bill’s Forex Profit Accelerator Coaching program. As of today he still had 37 seats available, but after people see how easy this trade was, I’m sure those last few seats will go fast. Check availability here:
Click here to check availability
Forex Trader Training - Live trading replays available through Monday…
Technology’s come a long way. It turns out that Mac X was able to get a recording of his 2 live trading classes last week…
…and his special Q&A, too.
These information-packed sessions from two live professional Forex traders will give you kick-butt strategies that will stuff wads of cash into your trading account.
But they’re only going to be available through Monday. Then they come down.
So go view them while you have the opportunity:
=> Click here
Have a great weekend!
Cheers
Brian
“The Trading Turnaround Coach”
P.S. - Take advantage of viewing Mac X’s free trading videos today and tomorrow… because they come down Monday night.
Check them out:
=> Click here
***********************
Disclaimer - You should use your own attorney approved disclaimer. Here is a sample:
Government Required Disclaimer: This commentary
is for informational and educational purposes only.
The information contained in this document is not
a solicitation to buy or sell any security by
New Ireland Ventures LLC, and/or its affiliates, and is not
to be used, read, or otherwise available to anyone
in a jurisdiction where said availability would be
against local regulation or law. Any and all opinions,
data about the market, recommendations, etc. are
subject to change at any time, and without prior
notice. Forex trading involves substantial risk,
you can lose a lot of money, and is not suitable
for all investors.
Any earnings mentioned are not typical. Your results
may vary. Nothing in this publication or any other
by New Ireland Ventures LLC should be considered financial
advice, legal advice, or any other advice. Seek
out the advice of a qualified professional before
any trading, investment, or business activity.
CFTC RULE 4.41: HYPOTHETICAL OR SIMULATED PERFORMANCE
RESULTS HAVE CERTAIN LIMITATIONS. UNLIKE AN ACTUAL
PERFORMANCE RECORD, SIMULATED RESULTS DO NOT REPRESENT
ACTUAL TRADING. ALSO, SINCE THE TRADES HAVE NOT BEEN
EXECUTED, THE RESULTS MAY HAVE UNDER-OR-OVER COMPENSATED
FOR THE IMPACT, IF ANY, OF CERTAIN MARKET FACTORS, SUCH
AS LACK OF LIQUIDITY. SIMULATED TRADING PROGRAMS IN
GENERAL ARE ALSO SUBJECT TO THE FACT THAT THEY ARE
DESIGNED WITH THE BENEFIT OF HINDSIGHT. NO REPRESENTATION
IS BEING MADE THAT ANY ACCOUNT WILL OR IS LIKELY TO
ACHIEVE PROFIT OR LOSSES SIMILAR TO THOSE SHOWN.
Live Forex Trader Coaching Session This Friday
Grab a red pen, and circle Friday on your calendar.
Starting at 8:00 AM eastern time, Mac’s top trader is going to give you a live Forex coaching event.
Whatever question you may have, whatever problem keeps you from being a winning trader, or what settings to use with a certain indicator in a certain timeframe…
All will be revealed when you sign up here:
=> Click here to register right now!
But I gotta be straight about one thing up-front…
This live session uses a high-bandwidth webcast technology, so there’s only limited seating. Make sure you register now to get a seat…
…because of two little extras being done Friday.
One is a demonstration of Mac’s autopilot software being traded live. The other is - well, you’ll just have to see for yourself!
I promise you won’t be disappointed.
Make sure you get a seat:
=> Click here to register right now!
Cheers
Brian
“The Trading Turnaround Coach”
P.S. - If I were you, I wouldn’t even read another email, thinking I could come back and register later.
Later will probably be too late. Go now:
=> Click here to register right now!
It’s timed to coincide with the New York Forex session open.
Disclaimer - You should use your own attorney approved disclaimer. Here is a sample:
Government Required Disclaimer: This commentary is for informational and educational purposes only. The information contained in this document is not a solicitation to buy or sell any security by Retire3 Media, and/or its affiliates, and is not
to be used, read, or otherwise available to anyone in a jurisdiction where said availability would be against local regulation or law. Any and all opinions, data about the market, recommendations, etc. are subject to change at any time, and without prior notice. Forex trading involves substantial risk, you can lose a lot of money, and is not suitable for all investors.
Any earnings mentioned are not typical. Your results may vary. Nothing in this publication or any other by Retire3 Media should be considered financial advice, legal advice, or any other advice. Seek out the advice of a qualified professional before any trading, investment, or business activity.
CFTC RULE 4.41: HYPOTHETICAL OR SIMULATED PERFORMANCE
RESULTS HAVE CERTAIN LIMITATIONS. UNLIKE AN ACTUAL
PERFORMANCE RECORD, SIMULATED RESULTS DO NOT REPRESENT
ACTUAL TRADING. ALSO, SINCE THE TRADES HAVE NOT BEEN
EXECUTED, THE RESULTS MAY HAVE UNDER-OR-OVER COMPENSATED
FOR THE IMPACT, IF ANY, OF CERTAIN MARKET FACTORS, SUCH
AS LACK OF LIQUIDITY. SIMULATED TRADING PROGRAMS IN
GENERAL ARE ALSO SUBJECT TO THE FACT THAT THEY ARE
DESIGNED WITH THE BENEFIT OF HINDSIGHT. NO REPRESENTATION
IS BEING MADE THAT ANY ACCOUNT WILL OR IS LIKELY TO
ACHIEVE PROFIT OR LOSSES SIMILAR TO THOSE SHOWN.
Forex Trading Risk Management - An Often Overlooked Aspect
There is an aspect of risk management that many traders overlook, a very real aspect that is attended to in many industries.
Unfortunately, this aspect receives way too little attention in the trading world, at least regarding effective tools to improve matters.
In this video, you’ll discover one of the tools that you can put to use immediately to see instant benefits in your trading.
After you’ve watched the video click here to act on what you just learned!
You’ll be glad you did. 
Have a great weekend!
Cheers
Brian
P.S. Keep an eye on your email inbox over the next few days.
Something coming that you will definitely NOT want to miss out on!
Psychology of Trading - “Winners Always Want the Ball…”
Sometimes inspiration can come from unexpected places.
The other day, my son was watching the movie “The Replacements”, which stars Keanu Reeves and Gene Hackman. In the movie, Gene Hackman is the interim coach of a replacement football team during a player strike, and Keanu Reeves is the quarterback of the team.
During their first game, the defensive players are talking a lot of trash and manage to get inside Keanu’s head. On the last play they put on like they’re going to blitz and Keanu gets nervous. He has a chance to win the game, but at the last second Keanu changes the play - and they lose.
While they’re walking off the field, Gene Hackman is furious, knowing that Keanu got scared when he thought the defense was going to blitz. To put things in perspective for Keanu, he says,
“Winners always want the ball when the game is on the line.”
So how does this relatet to trading?
One major factor that separates the winners from the losers is confidence versus doubt. They’re both faced with the same situation, but the winners can overcome their fears and doubts. They have a certain state of mind that they’ve developed that helps them stay focused on the victory, not the possible loss.
Winners want the ball because they know that when the pressure is on, and only bold and confident action is what will result in a win. Shaking with fear means certain loss.
Football, golf, soccer, sports in general, business, trading, etc all have one thing in common - they are 90% mental. Skills, experience, knowledge, strategy, etc are all secondary to your state of mind - because your performance and your results all depend on your decision making and timing.
So while it is tempting to let your focus be drawn to the latest fad in the technical areas, remember that nothing will do you any good unless you can keep your cool and trade well when the pressure is on - and it’s always on.
Cheers
Brian
P.S. Yes the focus here at the Trader Intensive is shifting more back to the psychology of trading - because of its importance. Keep your eyes peeled for a very special introduction to the new publication designed specifically to keep you at the top of your game!
Control Your Profit and Risk Through Strategic Money Management
“Control Your Risk and Profit Through
Strategic Money Management”
With David Jenyns
Wednesday June 24th, 2009
An Interview and Q & A Session With David Jenyns, Professional Trader & Trading Coach
According to many famed traders, money management is the key to making any trading system profitable. Even with a good entry and exit strategy, how you manage the other factors is what will ultimately control your net bottom line.
Dave was trained by professional traders early in his adult life and has continued his study of trading ever since, while training others over his career as a professional trader himself.
On this webinar, you’ll discover:
* How to strategically minimize losing trades and eliminate big losses.
* The fine art of letting your profits run. Are you selling your positions too early or are you holding on too long?
* The secret to managing open positions - you too can learn this disciplined approach usually reserved only for professional traders.
Download the replay by ‘right-clicking’ here
Get “Trading Secrets Revealed 2.0″ here
Day Trading Forex Currency - What’s More Important Than Entry, Stop and Exit?
So many trading systems completely miss the most important part of being profitable.
It’s a real shame too because all they seem to focus on is the setup, stop, entry and exit.
Now to the novice trader, this is what a trading system is all about.
They think that so long as you have these four bits of information, you should be able to consistently produce profitable trades.
But if that were true, then how could it be possible for random-entry systems and coin-flip trading systems be profitable?
The key is strategic money management.
WITH sound money management, even a purely random entry system, even a trading system that chooses entries based on the flip of a coin, can be quite profitable.
Without it, even a great selective trading system can lose money.
Now there is more to it than simply setting your maximum per-trade loss, while at the same time, it isn’t that difficult - when you know what to do.
Join me and David Jenyns for a live webinar tomorrow night where you’ll discover how to control YOUR profit and risk through strategic money management.
There is no cost to attend!
You’re only cheating yourself if you don’t!
Cheers
Brian
P.S. What does this notion about money management mean for YOU?
The underlying implication is that you could probably take your existing system, even if it hasn’t been profitable for you so far and make it profitable through sound money management!
Still skeptical? That’s understandable. But there is a quick and easy way to PROVE IT to yourself with ZERO risk.
You can use this to test ANY trading system or money-management strategy completely risk-free, plus track your trading throughout the year to ensure continuous improvement and consistency.
use the coupon code 56B25A258E to save $20.00!
Day Trading Forex Currency - Opportunities in Forex Calendar Trading Patterns
“Opportunities In
The Forex Calendar Trading Patterns”
With John Forman
- Professional Market Analyst
Wednesday June 17th, 2009
An Interview and Q & A Session With John Forman, Professional Market Analyst & Trading Coach
John Forman has been teaching and coaching traders for a number of years, along with creating several very highly-acclaimed trading resources.
One project that he initiated a couple years ago was exploring the possibility of repeating calendar patterns in the currency markets.
On this webinar, you’ll discover:
- The history of John’s work in this pursuit
- His discoveries along the way
- Several of his findings that can give you a serious competitive edge in trading Forex
Replay available soon
Get John’s 238 page book by clicking here