Why People Fail At Trading
Having worked with thousands of traders over the last 5 years… one thing is obvious…
Most traders have a good enough trading system to make money and the reason they DON’T is
that they lack solid trading discipline. The traders that succeed in trading do the following;
they follow the trading strategy, they keep a journal, they track their win-loss ratio, they
have a trading plan, and they follow their trading plan.
The successful traders are patient; they wait for the trades to come to them. They only take
trades that have a high probability of success. They usually trade on time frames larger than
the 5 minute. They trade from the 15 minute chart or larger. The only reason they use the
5 minute is to time the entry when they are day trading.
The more unsuccessful traders lose the smaller the time frame they gravitate to. The successful
traders gravitate to the larger time frames. When trading the larger time frames there are fewer
whips saw actions so you don’t get faked out as often.
The trader needs to know their trading strategy inside out. Not just go over it a couple of
times and never review it again. If you keep the trade tracker then you will know where you
need help and can go back to the trading system and study the areas you are week in.
When something goes wrong unsuccessful traders start to trade more and the more they trade the
further away from their trading plan they get. They let emotion and greed creep in. When this
happens they are just about finished as a trader.
A trader needs to know when to go back to demo trading and review the rules.
If you are not succeeding as a part-time or full-time trader, then discipline is likely your issue.
December 23rd, 2009URGENT – Potential Opportunity For Traders
Please watch this 1 minute video – it’s an urgent message from Kirk Norwood.
After this, we just need you to answer ONE question for a potential GREAT opportunity.
CLICK HERE and just fill out this one question. Whether you’re interested or not, please fill out the form.
Just remember, this is VERY real and ONLY for you if you’re DEAD serious about starting a great business in 2010…
December 22nd, 2009
A Hole New World; Moving From Demo To Live Trading 2 of 7
Trading is not a natural endeavor for us. We have no basic skills or understanding of how it works when
we first start out. We have to learn from scratch. Everyone has to start somewhere. Some new traders
have the all or nothing attitude with little or no training and soon lose some of their trades. Once they
experience some losses then fear and pain set in. Most traders who trade without preparation are on a
course of destruction. They will destroy their trading accounts and or emotional strength so as to not
be able to stay in the trading game. So the first order of business in avoiding the fear and pain of
trading is to get some education. Not only technical education of knowing when to enter and exit trades
but, an education in understanding who you are as a trader, the physiological side of trading.
One of the basic laws of trading is to use and stick to a trading system. That
means you use a trading system and have done enough paper trades to know what win-loss ratio to expect over
a span of at least 100 trades. This can be done in increments of 20 trades and keep track of the results in
the trade tracker. If you need to do 100 trades after you have figured out what works then the extra time
will be well worth it. Once you have figured out what works for you then you must use the same criteria
and procedures on every trade. No exceptions. Paper trading makes it safe because there is nothing to fear
because there is nothing to lose. You just won’t sit there and lose money in order to experiment to see
what works if you are trading real money. This is one reason that 80-90% of new traders fail; they do not
learn how to trade before they try to become rich. This is one thing for sure if you want to be successful
at trading you need to study and practice. If you don’t learn how to trade before you start trading with
real money you will go through a great deal of fear and pain.
Once you have developed the skills to follow a mechanical system. Knowing how to pick a high probability
trade, set your stops, and manage the trade, whichever way it moves then you are ready to move to the next
lever. You are ready to open a live account. This is where you will encounter loosing real money and
having to admit that you were wrong on a trade or two.
Do We Learning From Our Mistakes 1 of 7
As we all know loosing is a part of trading. Win some and lose some. A trader needs to get use to
losing. That does not mean you have to lose all the time but it will happen. Once you have entered
a trade then it is a matter of managing the trade that makes a difference.
Many of us never get over the subtle emotional effects of learning from mistakes. Making mistakes are
just opportunities to learn. If not understood in a mature way, mistakes can be felt as a personal failing.
We all handle loss in different ways. The way we handle loss comes from our experiences as a child.
Hopefully we learn from our weakness so we are able to make the right decision the next time something
similar comes up. So if we learn from our losses and or mistakes then we will be able to survive trading.
If you use a set of indicators that work on all time frames then you can wait for the best trades and
time your entries. By only taking the best trades you will have fewer losses. Know that you will win
so many trades and you will lose so many trades. Study both your losses and your wins. Once you know
what you did wrong and what you did right along with how you felt with each kind of trade you will be
able to overcome the frustrations of losing. When a trade goes against you cut it shortcutting the
emotions as well. When you have a good trade remember what you did what you saw and how you felt.
Review how you managed the winners and the losers; managing the trade is a big part of overcoming the
emotion, fear of loss, and loss of your account. Make sure you learn these lessons on a demo account.
DOMINATING THE FEAR OF LOSS A 7 PART SERIES
In this series of thoughts we are trying to point out some things to keep traders in the trading game.
The suggestions are not major changes; they are little adjustments to keep you on track. When a trader
starts out with a plan, and follows some rules he will be way ahead in the long run.
The foundation a trading career is built upon can make a big difference in the final out come. One of
the worst things is for a trader to have a couple of lucky trades in the beginning and not really
understand what he did right or wrong. This will give a false sense of skill level and understanding of
the market. When this lucky streak happens before the knowledge is obtained bad habits form and with no
method of tracking improvement a trader soon loses money and confidence so he is done.
These thoughts were split up into smaller blocks to give the concepts a chance to sink in. Think about
where you are at in each of these areas. Determine if you really want to be a successful trader or just
have an expensive hobby. If you want to be successful at trading you will need to follow these guidelines
and be disciplines about staying on track. If you read and think about what is written and apply the
concepts until they are habits you are one step closer to becoming a successful trader.
A Traders Focus
Have you stopped lately and thought back as to why you are trading. Or do you need
to stop and figure out why you want to get into trading in the first place? Is it
to build capital or is it to trade full time to replace your income, or for some extra
income? WHY DO I WANT TO TRADE? The answer to this question will help you maintain
your trading focus.
Once you know why you want to trade then you can set weekly and monthly goals.
This will automatically set you annual goals. It is easy to get caught up in making
winning trades that you forget why you started to trade. This will also help you
chose your trading style.
Maybe your goals include having some free time. Then you might say I will only
trade between two set times and only trade 3-4 days a week. Maybe you want to have
an extra $100,000 when it comes time to retire. Then you need to figure out how many
years you have until retirement then how much you need each year then month then day.
This will keep you focused on what you are trying to accomplish by trading the currency
market.
If you want to make a lot of money, then you need to figure out what a lot of money is.
Your target needs to be specific and measurable. Otherwise you are just spending time
on an expensive hobby. It needs to be broken down into bite size chunks and reviewed
on a regular basis.
If you do not have enough starting capital to reach your goal then you need to change
your goal or earn some more investment capital.
This is just an idea on how to stay focused on the right thing, and that is to
make money.
A Trading Plan and Discipline = Keys To success
“Only a trader with a solid, tested trading plan and the total discipline to execute that plan,
in all its aspects, will be equipped to take advantage of market opportunities and be a
consistently successful trader. All others will fail.”
Now ask yourself a couple of questions.
QUESTION 1:
How many times have you done a little chart work and you just “knew” that market was going to
take off? Then you hesitated, for whatever reason, to pull the trigger and the big trade slipped
away… again!
Problem: You have not created a solid trading plan you could trust and feel confident in
enough to make your move when you should have.
Solution: Learn what a “solid” trading plan IS… which includes a style of trader that fits
you, a heavy dose of money management and risk management (two separate things!), and a tight
entrance and exit strategy… then make yourself a trading plan, test it, run it on a demo
account, fine tune it then repeat it until it becomes second nature.
QUESTION 2:
Have you ever had a nice little winning streak, where you had 3 or 4 nice winners in a row,
only to put on that “final” trade where you watch all your profits go down the tubes?
Because you did not have a stop loss in place nor a trading plan to remind you to put a
stop loss on.
Problem: You’re out of control when things go “too well”. Your overconfidence gets the
best of you and you put on a trade that’s not a “high probability” trade because “you’re
on a roll”, or worse, you “load up positions” so you can really take advantage of your
“streak” without proper money management.
Solution: Train your mind (and I mean change your subconscious patterns, because your
subconscious beliefs control your actions) to stick to the “high probability” trades and
to honor your solid, tested trading plan. Treat your trading like a business, not a game.
Unless you get really honest, with yourself and where you are mentally and emotionally
with your trading and equally as honest with the “tightness” and quality of your trading
plan then you will NOT BE READY to take advantage of the opportunities that will soon be
upon you in the markets.
Here is something you need to know. The volatility that is present when trading the foreign
currency market will shake out those without a tight trading plan and solid discipline.
THE GOOD NEWS…
Like most traders, we struggled in our first few years of trading. We were not willing to
admit that the problem with our trading it was not the market and that the problem was ours
because of our lack of discipline. We even got to the point where I “personified” the
market … and felt that it was “out to get me”.
Then I did something that most traders are not willing to do, I looked in the mirror.
I got honest with myself. I realized that by going around thinking that I had many years
of trading experience and all I needed was more “experience”, I accepted the TRUTH… I was
a trader with 1 year of experience repeated several times!
I wasn’t changing. I wasn’t improving. I was lying to myself! That realization
changed EVERYTHING. Well, not the realization, but the ACTING on the realization.
I decided that I was going to get some help. I found some successful traders that had
been down the road and learn what I could from them. I also committed to myself that I
was going to be disciplined in what they asked me to do.
Here are some ideas on what you can do to turn your trading around.
FIRST:
Develop a tight plan of action (if you don’t know how, learn how). Review all that is
in the trading systems forexstrategysecrets.com has opened up to you. Then write out
your tight trading plan from the instruction you have available to you.
SECOND:
Understand that if you are not TOTALLY disciplined right now, you CAN be in a matter of
months, if you are trained properly.
YOU CAN DO THIS!
Big opportunities require big commitments. And if I’m right… you may vary will build
the fortune you have been dreaming of. The time is right, right now.
You can contact our Student Advisory Board and ask for an explanation of our affordable
coaching programs. I know this will light the way for improved trading.
800-961-6212 or support@forexstrategysecrets.com.
November 17th, 2009Answer To A Question # 17
Question:
Your site looks great and seems very informative. I was wondering what the difference is between
the Jump Start and Launch pad system that costs money? I’m sure there is value in spending the
money on the system, I am just looking for some more details. Also, can you map out an average
day for yourself using the system, times and such?
Answer:
Here are the differences
JUMP START
How to use two confirming indicators
How to trade with indicator signals not price movement
How to do Simulated trading
Learn how to trade with Indicators so you can trade all of the currency pairs.
LAUNCH PAD
How to do demo trading
How to trade in multiple time frames
How to take more profits per trade
Learn where to set a stop loss
Learn How to Identify a trend
Learn how to trade in the present not in the past trying to predict the future
How to spot break out moves and how to trade them
How to trade a side ways market
Get additional entry signals
Get additional Exit signals
How to deal with their emotions, greed, and pocket book
How to trade the NEWS in relation to the trend
Money Management
How many lots to trade with
When to start trading live
How to use multiple signals
Indicators
time Frames
How much information to analyze
Candlestick movement
Learn New trading Patterns
How to create a trade journal that works if you use it.
Get trade journal sheets with instruction of how to fill them out
How to print out the details of the trade
How to spot trading strengths and weaknesses
Do all of the above in small amount of time
Risk Management
How to group currency pairs to save time and find more trades
How to make a trading plan and why
Learn how to do visualization trading
Learn how to trade by spending less time in front of the computer
JS is a strategy to teach people to enter the market using indicators. LP is a complete
trading system for beginners. Some traders say they do not need anything else; others
would like to have our advanced product Nth Degree.
I trade mostly with the 4-hr 1-hr and 30-min time frames. I start looking at the market
at 6:00 am Mountain, 8:00 am Eastern. I will also Iook at the market again around 5 pm
to 6 pm Mountain, 7 pm to 8 pm Eastern.
I look for the trend or a change in anyone of the indicators on the 4-hour charts on 6
to 10 currency pairs. I use our alert program and let it monitor the charts on all the
time frames. When the alerts give me a signal I check the trend or change of an indicator
on the 4-hour and 1-hour charts, then I go to a smaller time frame or the time frame that
I received the alert and look for a 4 or 5 alarm trade
If there is not much happening by 9 – 10 am then I will go do other things away from the
computer. Some days I do not trade other days there are plenty of moves so I trade for
a longer time. While I am waiting for an alert to go off I do emails, write posts and
do correspondents.
By using our alerts I have all the trades I can handle. This makes it possible for me
to spend less time in front of the computer. I can trade when I have time, I don’t
have to waiting for the market to have a big announcement to trade.
Sometimes I trade the smaller time frames if there is nothing happening on the larger
time frames. I use the15-minute time frame to get the short-term trend and enter in
the direction of the trend when I see a 5 alarm trade on the 5-minute charts for a
quick 5 to 20 pips.
The same technique a trader uses on the larger time frames is used on the smaller
time frames. The size of the trade has to be adjusted. For the Larger time frames
expect larger numbers of pips per trade. For the smaller time frames expect smaller
numbers of pips per trade. Just look for the trend on the largest time frame you are
trading with and then enter on a 5-alarm entry signal on the smaller time frame you
are using during each trading session.
Before we developed the alert I would look at the computer every 30 min to see what
was happening.
I hope this helps.
Kirk
November 13th, 2009Don’t Swim Upstream
Early in my working life I became a shift manager. When a rush of work came in I would jump in and
start working right along with the other members of the team. My supervisor suggested that I not
jump in and do the work but look at the big picture and direct the flow of activity that was needed
to complete the task in an efficient manner.
When I relate this experience to trading it seem that by jumping in and day trading and not looking
at the larger time frames you are not seeing the big picture. By larger time frames I mean the daily,
weekly, and yes, the monthly charts. The larger time frames will pull the smaller time frames in the
direction of the larger trend. By looking at the big picture you can adjust your trading accordingly.
Swimming upstream is the reason you need to be aware of your long-term surroundings. It is really
hard or doesn’t work. You may see a trade develop on a small time frame and it goes against you
before you have a chance to get out without a loss. If you manage it correctly you will only suffer
minimal damages.
Have you ever been swimming in the ocean and all of a sudden you seem to be swimming nowhere?
I was playing in the ocean and was looking toward shore when I noticed the waste deep water was
now only knee deep and flowing out to sea I turn around just in time to see a 15 foot wave right
behind me. Before I could do anything I was picked up and dropped on my head where my feet once
were.
And that’s what it can be for YOU if you don’t honor your trading rules and not swim upstream.
Just because the small current is going out to sea doesn’t mean that, that is the way the larger
current is going.
The monthly chart, for the trader, is the most dominant current influence. It’s hard to turn a
battleship or an ocean liner…They turn slowly and after they do, they stay on that direction for
a good while, until some grand force has them turning again.
Take a look at any monthly chart. Big move up, then big move down, then up.. on and on.
The weekly chart has a lesser “macro” influence, of course, then the monthly, but a more immediate
influence for the day-trader. The daily chart has less of the macro influence, and more immediate
for the day-trader than the weekly, and so on for the 60-minute on down the timeframes.
If you’re a day-trader… sure, you’re going tick by tick in many cases… but when something happens
that “doesn’t make sense”… think about which way the current is flowing.
To make sure the current is my friend, I’ve learned to take the majority of my trades WITH the
current… and it’s made a very positive difference in my trading results. It will likely have
the same effect for you.
If I’ve noticed that the monthly, weekly, and daily chart currents are all pulling the same
direction, the wise thing to do in to not trade against all those forces.
The smart trader looks for the path of least resistance.
Hope this helps.
November 4th, 2009Four Thoughts on Discipline in Trading
We have summarized the comments of 4 traders about being a more disciplined trader.
A day traders comments: He is a consistent trader his accuracy was good but would have
a blow up one day a month and lose a lot of what he had made. When he realized that
being right is not the key to making profitable trades. Sticking to your pre determined
plan and making high probability trades and not being emotionally attached to being right.
Stick to stop losses religiously. When he corrected his thinking he has quadrupled his
profits in just a few weeks.
Another trader makes a few comments. Traders look for the Holy Grail. The Holy Grail
could be within you. Get rid of the bad habits you have. Harnessing your emotions gets
rid of bad habits that keep you from being a winning trader. People over look their i
nner trader. Traders need to get rid of the bad habits and reinforce the good skills
they have by being disciplined.
This trader felt that there was an advantage of strong mentor ship. Trading is 85% mental
and 15% know how. If you are a disciplined trader you are following the rules of your
trading strategy. Step back look at the trading strategy, document the rules and make
sure that you are truly following the rules. Successful traders document their trading
activities they learn over time where they have improved. You need to be a disciplined
and focused trader. Being more patient and waiting for the high probability trades you
will notice the percentage of your winning trades will go up. Being disciplined will
help you to have more confidence and be calmer in your trading.
When you learn the basics of trading you do not have to learn about your emotions.
BUT when you start trading live you quickly learn about your emotions. Control the
emotions of fear and greed. You will not be able to eliminate it but you have to
control them. Writing the journal helps you know where you need to improve you do
not have to tweak your trading system. How you feel when you lost and when you won.
Take less trade avoiding the bad trades so the account grows. People will spend a
lot of time learning the technical side of trading but never do the record keeping
or checking their emotions.
See if any of this information could help you become a more disciplined trader.
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