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(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 mindset, check out my Forex trading course and members’ community here.
What Is the Use of the Stop Loss in the Best Forex Trading Success Stories
There are many Forex Trading Success Stories. How many of them care about the use of the Stop Loss? How newbies and experienced traders care about the Stop Loss? Do you care about the Risk Reward? Do you trade having a Trading Plan? Or you invest because people tell you where to buy or sell?
One of the most dedicated members of Profiting.Me asked an important question to me. I wish him to live one of those Forex Trading Success Stories that can inspire every trader.
In his email, he said:
“I usually prefer stop loss of not more than 60 pips per trade and from time to time I will go for 80 pip. What I have realized with this approach is that I sometimes miss opportunities. So the advice I wanted to know was:
Should I stop to focus on stop loss pips and instead focus more on opportunities?”
This was an interesting question because the use of the Stop Loss is the Dilemma of newbies.
As first thing, you have to understand that I cannot tell you how to manage your trades. In the same way, I cannot tell you how to manage your money. Everybody manage their trades in the way they prefer.
But, there is one relevant thing that everybody needs to understand to manage trades in a proper way. It is the importance that you put on your Position Management.
This is common to all the Forex Trading Success Stories you see in the world.
Many newbie traders confuse the Position Management with the Trading Plan. This is a bad mistake that is very common.
Plan Your Trades Knowing How Much They Are Going to Cost
You should not limit your view to only one trade. Instead, You MUST consider the opportunities that the Trading Scenario is offering you.
Then, the managing of your trades must be according to the Trading Scenario where you going to invest.
Every Newbie Trader miss to ask himself a simple question:
“How much money is going to cost the trade that I am going to take?”
The number of pips you set your stop loss is not the most important thing.
You should focus on the Commission Cost of each trade you are going to take in the Trading Scenario.
So, you try to make an evaluation of the cost per trade. In this way, you see if the cost of your trades in a Trade Scenario is acceptable for you.
You MUST Think Bigger. Get a view that is bigger than the one you can have staying focused on a single trade.
Do you have a Trading Plan for a Trading Scenario?
Or you look for that one trade you can take in that moment, without considering the whole Trading Scenario?
If you have a Trading Plan you know what you are going to do. Then, you can hold one or more trades in red according to the plan.
With a Trading Plan for your trades, your story could become one of the Forex trading success stories.
What is relevant is how much these trades are going to cost before they give you a profit.
In the same way, how much the cost per trade can affect those trades you are going to close with an acceptable loss.
Commissions Costs can become very dangerous if you skip to measure them for your trades.
Why the Stop Loss is the Dilemma of Newbie Traders
When you are a newbie, you learn to use the Stop Loss with Risk Reward 1:3 or something similar.
The main reason is that the most of the pieces of information you get around in an easy way, are only for newbies.
They come from people who get paid to write them. In the same way, they come from those who are not profitable by trading.
To get the right tips about trading, you have to search specific topics. You have to look for that kind of info that only currency trading millionaires can give.
Successful Forex traders, even those you ask suggestions, would not tell you to don’t use the Stop Loss. In the same way, they will not give clear or detailed suggestions to use the Stop Loss in a specific way.
Let me be clear:
An expert trader cannot tell to newbies to don’t use the Stop Loss because this has consequences. Newbies are not expert traders. They lose money.
Newbie traders, alone, have high chances to fail with or without the Stop Loss.
A newbie trader takes a trade. This trade turns to red showing several pips of loss. Then, he gets panic, without know what to do. So, he looks for somebody to blame. It is so.
It is an emotional involvement.
A newbie trader takes months or even years to get experienced enough to manage his feelings in a proper way.
Indeed, to become able to trade in the right way, he needs to practice for the long-term.
Besides, he will get a big help by the use of a sizing plan to support a sustainable growth.
The Truth About Successful Retail Forex Traders and Stocks Traders
Now you should listen very well to what I am going to tell you.
If you want to learn how to earn money by trading in a proper way, you should not stay in the same room with newbies.
I know this could sound not good to your ears. But this is the way. This is the TRUTH.
Who wants to earn money in the right way, doesn’t want to listen to obvious things. In the same way, he doesn’t want to listen to inconsistent topics, by inexperienced people like him.
And more, you should not debate about trading with newbies.
Besides, you should not take advice from who writes content for newbies.
For sure, you have not to listen to who earns by affiliations and trading signals. In the same way, don’t listen to advice from Broker Account Managers and Bank Account Managers.
Take money advice only from who was already able to earn money by trading in a proper way. Period.
Who Was Able to Earn Millions Will Show You How to Become a Millionaire
I tell you a story, a little fragment of my story:
When I found the mentor who changed my way to approach trading, he had passed 4 Million in that moment. Around him, I have found other millionaire traders that had become my mentors too. One of them was reaching 2 Million in that moment. Others were reaching their First Million.
But a couple of them were on the extreme of 10 Million.
I show you the Account Growing of one of the traders who inspired me for years:
The veteran stock trader Gregg Sciabica, in 2020 passed the 10 Millions of his life profit. Later, he started his private hedge fund. For this reason, now his results are not more public.
Stocks and Forex Trading Success Stories – Greg Sciabica passed $10 Million in 2020
Ironically, being less confident can be a positive thing. people who are overconfident tend to trust their intuition too much. – Gregg Sciabica
What I am telling you is that if you want valuable tips about money and trading, don’t lose time with who is not able to earn.
You should not spend your time with people and communities that cannot help you to improve.
Instead, stay around of successful Forex traders in the world. Take the best from them.
This is what you MUST do. You will pay for their knowledge and expertise. In return, you get the growing of your skills and the improving of your profitability.
This is the way to turn your personal story to one of those Forex Trading Success Stories that inspire you.
An Expert Trader Knows That a Trading Plan Is Crucial for His Profitability
An expert trader knows that, in general, about the
90% of the trades he is going to take will get a wrong entry.
There is no way to get a 100% of perfect trades. NO WAY.
Even a Quantitative Trader cannot develop algorithms to execute only perfect trades.
For example, you open one perfect trade, but before of it (or later of it), you could take 10 trades or more with a wrong entry.
An expert trader turns this into an advantage because such circumstance is part of his Trading Plan.
The expert trader has a Trading Plan for his profitability in a Trading Scenario. This can involve several trades so as several entries.
The Trading Plan is a crucial resource about how a group of trades in a Trading Scenario, are going to pay.
How many Forex Trading Success Stories do you know, who cares about the Stop Loss around one trade only?
I am not talking about YouTuber traders who tell you to set your stop loss and buy their services.
I am talking about Forex millionaire stories. At least, one real Forex millionaire that you can know.
There are many Forex true stories of success so as many Forex failure stories.
Only Forex millionaires so as Forex billionaires can tell you how to earn millions in the Forex Market.
Nobody of them takes care of the stop loss per trade. They keep the focus on the Trading Scenario where they are going to invest. Their risk depends on the Trading Scenario.
One of my millionaire mentors, a stock trader, uses to repeat:
“If you don’t have a plan, you don’t have a trade.”
Why a Forex Millionaire Strategy Doesn’t Limit the Risk to a Single Trade
If you stay focused on only one trade, you have a limited “view” about your options. This doesn’t favor your profitability in the short, middle, and long-term.
Talking about the 60 pips of Stop Loss indicated by my student, I can show you the missing of profitability.
You take 10 trades or more. All them with a Stop Loss of 60 pips. You could get 1 of them at a perfect entry.
Going forward, you will realize that they are not making grow your account balance. The reason is that the most of them will hit the Stop Loss and others will get a small profit.
This happens because your focus was on the Stop Loss of 60 pips, missing the whole Trading Scenario.
If you limit the Stop Loss trade by trade, you are limiting your Profitability to the risk carried by each trade.
It causes a choppy behavior in your balance account. Besides, you are missing the reward of the whole Trading Scenario.
In practice, by all those trades that hit the Stop Loss, you are fighting to keep up the growth.
90% of trades can have a wrong entry, there is a high chance that only a few of them will give a satisfying reward. So, the balance account could not get a real growth by them.
The result is that you will spend weeks to recover all those losses, adding new mistakes.
But your focus will continue to stay on the Stop Loss per trade and on the losses to recover. Your focus will not be on the Account Growth.
Then, you will experience a perennial frustration caused by a wrong use of the Stop Loss.
Instead, you must focus on the growth since the beginning.
Forex Trading Success Stories That Can Inspire You
What inspired me in life can inspire you today and forever. I am a trader because I wanted to become a Trader.
But before than this, I found out about trading when I was in high school. When I was a teen there were not the tools we have today for trading. So, Financial Markets were more for rich people with specific intermediaries.
Today, everything is easy and people like me can earn money staying at home or everywhere in the world.
Trading has become more a “Software Developing Business for Finance” than a pure Financial Business. Of course, the purpose of the coding is to earn more money in a systematic way, by specific algorithms.
The Forex success stories that inspired me are very old. Behind them, there are people who were able to earn consistent money from Forex Market.
The difference between Successful Traders and who rejects the idea to invest on Forex is the perception of the business.
People, who reject Financial Markets including Forex are those who ask: “is Forex real?”
So, let me show you the most important and rich Forex trading true stories.
Would you like to get your story and your name added to the list of the Forex trading success stories?
In only one post, I am going to talk about a limited number successful Forex traders stories. Only 3. But there are many more forex trading true stories that you can explore by yourself.
I want to start introducing you a famous book that will inspire you by passion, traders wisdom and experiences.
The New Market Wizards: Conversations with America’s Top Traders
In The New Market Wizards, successful traders relate the financial strategies that have rocketed them to success. Jack D. Schwager encourages these financial wizards to share their insights. He asks them questions that readers with an interest or involvement in the financial markets would love to pose to the financial superstars.
The New Market Wizards is another Schwager classic, informative, and invaluable.
As in the previous volume, Schwager starts with a frank discussion of his own trading experience, followed by a surprising diversion comparing Saddam Hussein’s invasion of Kuwait with a trade that went wrong.
The rest of the book is broken into five parts. It includes several interviews with different types of traders and brief discussions of the lessons to be learned from them. It has a part on trading psychology. Besides, it includes a final part summarising the wisdom gained from all of the interviewees in 42 golden rules.
Founder, Soros Fund Management LLC
George Soros founded the Soros Fund Management in 1962. The company gained tens of billion dollars over the years.
I already talked about George Soros and his partnership with Jim Rogers. They founded the Quantum Group of Funds in 1973.
George Soros has got an international fame on September 16, 1992. It was the Black Wednesday. The Quantum Groups earned $1 Billion in net by short selling an amount of 10 billion pounds sterling.
For this reason, George Soros holds the record of being the first person to get the highest earning in a single day.
At that time, Britain was part of the Exchange Rate Mechanism (ERM). The UK government had to hold the pound over a certain level against the Deutsche Mark to stay in the ERM.
But, on September 16, 1992, the Pound Sterling was not more able to stay above the lowest agreed limit. So, UK had to withdraw the Pound Sterling from the ERM.
This short sell made him famous. In that moment George Soros became:
“The Man who broke the Bank of England.”
His story deserves to stay on the Top of the Forex Trading Success Stories.
According to what Forbes reported:
George Soros is one of the largest supporters of drug reforms. For example, to use some drugs for medical purpose. His foundation donated about $200 million to drug reforms, since 1994.
Ethan Nadelmann, Drug Policy Alliance, said:
“He’s played a historic role in the evolution of drug policy reform from a movement that was on the fringe of U.S. politics to one that is in the mainstream.”
Founder, Duquesne Family Office
Stanley Druckenmiller worked at the Quantum Fund for more than a decade. He worked alongside with George Soros enough to consider him his mentor.
But Stanley Druckenmiller established his solid reputation with his Duquesne Capital Fund, before retiring.
Stanley Druckenmiller affirmed that his trading philosophy revolves around the preserving capital.
His work is the building of long-term returns. Then, it is the pursuing of profits, in an aggressive way, when trades are going well.
This approach emphasizes the value of maximizing the opportunity when you are right. Then of minimizing the damage when you are wrong.
Indeed, it downplays the importance of being right or wrong.
During an interview for the famous book “The New Market Wizards“, Stanley Druckenmiller said:
“There are a lot of shoes on the shelf. Wear only the ones that fit.”
A the end of the 1980s, the German Mark was suffering a constant depreciation. The serious situation around the reunification of Germany undervalued the German Mark.
Understanding such undervaluation, Stanley Druckenmiller saw an opportunity for purchasing.
At the beginning, he placed a multi million long position in German Marks. Later George Soros made him increase his position adding 2 billion German Marks.
The return was a 60% earnings for the Quantum Fund.
Stanley Druckenmiller learned a lot working with George Soros. His story deserves to stay in the list of the Forex Trading Success Stories.
Co-founder and Director of Portfolio Management at Hathersage Capital Management.
Bill Lipschutz turned the $12000 he inherited from his grandmother, into $250000.
But later he lost everything by bad personal investment decisions. By this loss, he realized the importance to work having a proper risk management.
In 1982, Bill Lipschutz attended the Salomon Brothers investment company training program.
In 1984, Salomon Brothers offered him to join a new department dedicated to the Forex Market. The intention of the company was to develop its business in the growing Forex Market.
Bill Lipschutz made hundreds of millions at the Forex division of Salomon Brothers. Earnings like $300 million dollars per year.
In the 1980s, such return per year was a lot of money for a growing market like Forex.
For this reason, Bill Lipschutz became:
Bill Lipschutz describes Forex as a very psychological market.
The market perceptions help determine price action as much as pure fundamentals.
Bill Lipschutz also agrees with Stanley Druckenmiller about trading on Forex:
How to be a successful trader in Forex, is not dependent on being right more often than you are wrong. Instead, you need to understand how to make money when you are right only from 20 to 30 percent of the times.
Bill Lipschutz empathizes the need to manage the risk explaining an important thing:
You should choose a trading size that avoids the forcing out of your position when your timing is inexact.
He made himself from scratch. he made hundreds of millions without a real background of experiences.
His story deserves to stay in the list of the Forex Trading Success Stories.
Understanding Risk and Opportunities in a Trading Scenario
I want to show you a Trading Scenario around NZDJPY.
The weekly chart shows the Spring in the Wyckoff Trading Range.
The supply action tested again the possibility to continue the bearish trend. But it failed. So the new buy block trades moved the price again into the range.
The Composite Operator accumulated consistent resources to test the reversing of the trend. So, the price jumped across the creek and then it ran throughout the range, marking new points of demand.
But, you see that the spring occurred too soon. So the remained supply was still strong.
The resources of the Composite Operator were still not enough to take out the Supply Edge. So the remained Supply tested again to continue the bearish trend. But the price has found an opposition to one of the higher points of demand.
The opposition in the backup shows that the Composite Man increased its resources.
Forex Trading Success Stories – NZDJPY – Monthly
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In the monthly chart, you see that the price could try to continue the bullish main trend, at least for a moment. But it has still chances to fail.
In the Demand Accumulation, there were opportunities to buy anticipating the markup. They occurred in the latest points of demand, going forward from the Spring.
Stop Loss in the NZDJPY Trading Scenario and Forex Millionaire Strategy
NZDJPY shows a throwback to
76, offering a buying opportunity in the highest point of demand. But the price had chances to fall to the lower points of demand.
On the chart, I marked indicative distances between possible entries:
You understand that if you opened a trade at
76 with a Stop loss of 60 pips, you started with a disadvantage. The highest entry around
76, carried chances to fail.
As I told you, you cannot limit your “view” to only one trade. In the most of the cases, your entry point would be wrong.
This falls into the Trading Philosophy of the Forex Trading Success Stories I showed you.
The Bill Lipschutz and Stanley Druckenmiller Forex millionaire strategy describes a few things. Let me show these important concepts again. So that you can set them very well in your mind:
- Your success doesn’t depend on being right more often than you are wrong.
- You have to be right for the 20% or 30% of the times.
- That 20% or 30% of right trades should give you a consistent return.
- Choose a trading size that avoids the forcing out of your position when your timing is inexact.
- Preserve your Capital.
- Build long-term returns.
- Pursue the profits, in an aggressive way, when trades are going well.
- Maximize the opportunity when you are right.
- Minimize the damage when you are wrong.
- The Trading Plan is much more important than the Stop Loss.
In the NZDJPY Trading Scenario, you define your Trading Plan.
In the Wyckoff Trading Range, you skip trading before the Spring. After the Spring, you prepare your buying action in the Demand Accumulation. You do this, even if the markup could fail later.
If your highest trades get wrong entry points, the wrong Stop Loss of 60 pips gives you 3 things:
- It bites your balance account.
- It compromises your profitability.
- As consequence, the growing of your account becomes uncertain.
Forex Trading Success Stories: 69.48% of Realized Profit Buying ETHUSD
Stanley Druckenmiller’s long position on German Mark made me think of my buy trade on ETHUSD.
Stanley Druckenmiller gave a 60% of return to Quantum Fund. This is why he is in the list of the Forex Trading Success Stories.
I bought ETHUSD at a perfect entry. The purpose was to catch the automatic reaction in the bounce back.
I planned this first trade in advance according to the Trading Scenario in the daily chart.
This was my highest order in the initial buy action. I planned it for the beginning of the Wyckoff Trading Range.
The exit point was on the preliminary imbalance. So my trade reached the take profit giving me 69.48% of Realized Profit. This was a quick profit.
The Bounce Back in the Automatic Reaction is always Strong and Fast.
Later the price retraced back and I took a second planned trade.
It is relevant to consider that there was no leverage on this trade. So it was only the amount of money invested to give such large profit.
The 69.48% of return gave a consistent rising of my account balance. This shows also the increasing of my profitability.
I continue to improve. Then, I earn more money by trading, increasing my Profitability.
The impact of this buy trade is visible on my Profitability Chart. It shows the Growth of my Account for the latest 12 months.
Forex Trading Success Stories – ETHUSD – The Impact of the realized profit on the Growth of my Account
Answering to my Profiting.Me student, I am answering to everybody who shows the same doubts.
You have clear now that the Stop Loss does not matter much. But the wrong Stop Loss that you set trade by trade, can stop your account growth.
More damages come If you skip measuring the cost per trade. The fees have an extreme importance. You should compensate them.
I showed you the TOP 3 Forex Trading Success Stories. Those traders who are in the Pantheon of Traders.
They are currency trading millionaires. Or better they are Forex billionaires.
Their Forex true stories show the Forex millionaire strategy that makes you different.
As Bill Lipschutz said:
“It is very difficult to be different from the rest of the crowd the majority of the time, which by definition is what you’re doing if you’re a successful trader.”
This explains why you should not stay in the same room with newbies to debate about trading.
No Facebook, Telegram, Skype Groups or others will let you improve. It is so if you are a lazy trader and if you lose time listening to newbies.
There are people who contact me telling:
“I am a trader. I am a supply demand trader too. But I continue to lose money.”
These traders are in the wrong place and debate about trading with wrong people. Besides they are lazy in the changing of their wrong habits.
So, let me ask you a few questions:
- Would you learn Forex Trading from George Soros, Stanley Druckenmiller and Bill Lipschutz?
- Or you prefer a boy in a Telegram group who wants to sell you his Trading Signals for $20?
- Or even you prefer to pay a millennial on Instagram who shares expensive golden watches and super cars?
How To Set Yourself Up For Trading Success
A wise man once said, “Luck is what happens when preparation meets opportunity”. However, many unsuccessful people seem to think luck is just something that happens by chance. To the unsuccessful person who is just hoping to “get lucky” and hit it big, it may look like a successful person is “just lucky” but that does not tell the whole story, not even close…
‘Behind the scenes’ of any wealthy or successful person is thousands of hours of hard work and repetition. While the poor man was playing video games or binge-watching Netflix, the rich guy was putting in the ‘hard yards’, doing the ‘boring stuff’ that most people don’t want to do or that they make excuses for not doing.
Today’s lesson is all about how to put yourself in position to make money trading, about how to set yourself up for trading success rather than leaving it to chance. It’s not just going to happen because you want it to, I can tell you that for a fact. YOU must make it happen by proper preparation and effective routines. You have to love the process, love the routine, once you do that you will be well on your way to trading success.
Once you do the homework and have put in the ‘hard yards’ and your mind is aligned for trading success, when the proper trade setup comes along, all you must do is put the bullet in the chamber, so to speak, and fire away.
Your goal as a trader (or with anything really) should be to work so hard and be so dedicated to mastering your craft, that when the perfect opportunity comes along, you hardly even have to think, you literally just execute the plan. You can nail this down all the way to the expectation of the trade. Win or lose, you can know what to expect before you pull the trigger. Doing this, will allow you to eliminate fear and other negative emotions from dictating your behavior in the market.
Be CRYSTAL CLEAR about what your trading edge is!
It’s commonsense to say things like “If you don’t know what you’re looking for you will never achieve success…” but SO many traders start trading live with no real concrete trading strategy or trading edge. They literally don’t know what their trading edge is.
Obviously, you must pick a strategy, a trading edge – something that gives you a high-probability entry – and learn to trade it before you can really do anything else. Many people simply don’t even get this beginning part right. They switch from method to method, never really mastering one and they end up with a hodge-podge of ideas that they call a method. Usually this means their charts are plastered with multi-colored indicators, which really means they are just confusing themselves.
The entry is simple, perhaps the simplest part of trading, so don’t over complicate the trading process. I teach a number of high-probability price action patterns that you can use to enter the market from. Now, a high-probability entry doesn’t mean a guaranteed win every time. It just means that over a large enough series of trades, that edge will give you a better than 50%-win rate, which really is all you need if you’re managing your money right and not over-trading.
I have written multiple lessons on how to master your trading strategy, so check those out if you haven’t already. Remember to “keep it simple stupid”, and don’t think too much about this very elementary aspect of trading. All you’re doing is finding a repeating pattern in the market and using it to enter, it’s not rocket science, but it does require discipline. The biggest thing is finding your favorite price action pattern and committing to master it and to NOT trading if it’s NOT present! This is the first step to getting yourself into position to make money trading.
Develop a trading plan and routine
Boring, right? I know that’s probably what you thought when you read the words “trading plan and routine” above. But, if you read this little section you will be light years ahead of most traders…
Guess what? Boring stuff is how you make money, how you get rich! One big problem with our current society of constant iPhones in our faces is that everyone seems to need everything to be a blue-light filled screen in their face all the time or they think it’s boring. Well, do you think Warren Buffet or Bill Gates or even Donald Trump got to be where they are by playing video games constantly or watching T.V. all day? No. They learned to love the process. They found what they loved, and they GOT INTO IT hard core. They didn’t whine about the boringness of routine and processes, they made themselves love them because they knew if they did that, the money would come. A funny thing happens when you do this, along the way, you ACTUALLY start to enjoy the process and it stops becoming something you have to force yourself to do, you just start WANTING to do it.
This is about turning your trading strategy / edge from the first sub-point above into a ‘bite-size’ trading plan and routine that you can really dig into and start implementing. You can and should write this out and read it every time you plan on looking at price charts.
Your goal is to be following an objective plan that allows you to approach trading from a calculated business perspective, rather than a random ‘shoot from the hip’ gambler mentality that most traders end up with.
Once you have your plan and routine written out, start practicing it everyday by demo trading on real-time market conditions or even trading with VERY small amounts of money. Ideally you will demo trade for a few months then start risking VERY small amounts of money until you are seeing consistent success with what you’re doing.
The goal is to learn to trade your chosen pattern / method so well that all you are really doing is checking in with your plan, following it to the T and then checking the charts to see if the conditions are ripe for a trade. The conditions are defined in your plan. If you do not see those conditions you go away from the charts until the next scheduled time to check them. If you do see a trade that meets what you’ve pre-defined in your plan, then you simply execute the conditions of the trade, which typically means:
- Identify best stop loss placement
- Calculate position size that maintains your pre-defined 1R per trade risk amount
- Identify profit target of 1:2 (or better) ideally.
- Set the trade and forget it.
This is the second step in setting yourself up for success in the markets.
Master yourself to master the markets
The ‘glue’ that will allow you to do Step 2 above, is mastering yourself, mastering your own mind and therefore your behaviors in the markets.
Setting yourself up for trading success is about getting into the proper trading mindset and perhaps what’s harder, staying in that mindset. Most people can get into the right mindset and stay disciplined and focused for a few trades, but it’s often the results of those trades that throws people out of whack. They start getting emotional; over-confident or afraid, depending on the result of their last trade. Don’t allow this to happen to you. Stick to the plan, to the strategy you have mastered. If you feel yourself getting frazzled then just read your trading plan again and take some time off from the markets to regroup, you will come back refreshed and re-focused.
Discipline, patience, overcoming mental hurdles, sticking to routine, understanding that your mind is the key. Mastering your mind is how you master the markets, and this is the glue that holds all of this together and that allows you to stay positioned to take advantage of obvious price action setups when they form in the market. This is the third step to setting yourself up for trading success.
There are a couple of very key aspects of money and money management that I want to discuss briefly. The most important parts of managing your money as a trader are controlling your per-trade risk (1R = risk amount per trade) to a 1R dollar amount that you can realistically lose on any given trade without it affecting your personal finances or trading mindset.
The other big part of money management is not over-trading. Whilst this isn’t directly money management, it is in the sense that if you are over-trading you are also risking too much money and thus putting yourself into a position to become emotionally ‘charged’ if you do lose.
You should aim to be a low frequency trader who only trades when conditions in the market are favorable and match with what your trading plan says. You should only risk a dollar amount that you’re totally OK with losing on any given trade. If you do these two things, the rest will almost take care of itself.
There are basically two parts to setting yourself up for trading success: The ‘work’ of learning how to trade the market and then the implementation of your trading plan. You want to break both parts up into smaller and smaller chunks that you can more easily ‘digest’ and understand.
Once you have become crystal clear on what you’re looking for in the market and devised a trading plan and routine, it just becomes a waiting game. Sitting and waiting is mostly what successful traders do. You should be out of a position / flat the market more than you are in a position, if you’re doing that then you’re on the right track. There simply aren’t very many high-probability setups per month that are worth risking your hard-earned money on. So, if you find you’re trading all the time, you are just gambling.
Setting yourself up for trading success means that you have done the work so that you will be prepared when the opportunities on the charts come along.
Proper preparation starts by learning, either from my trading course or elsewhere, but whatever you do, remember: Success (or luck) is what happens when preparation meets opportunity.
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