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33 Visitor Messages

  1. The money you put at risk on any given trade, whether it’s $5 or $500, is an investment with the best Forex coach in the world — the market. Keep an open mind and it’ll show you everything you need to know.
  2. They Use Price Action

    Every successful forex vps trader I’ve met uses price action in some way, shape or form.

    This doesn’t mean they’re using price action in the same way I use it, but they are using some form of price action as part of their trading strategy.

    Whether a trader is using raw price action or simply using it to identify key levels in the market, price action plays a major role in any strategy.

    That’s because it serves as a representation of the psychology within a market. It gives us some insight into the minds of other traders.
    Having some idea of where buy and sell orders are located in the market is critical to becoming the best Forex trader you can be. It can strengthen any trading strategy by providing areas to watch for potential entries as well as profit targets.

    Trading Forex without using some form of price action is like trying to drive a car with one eye closed.
  3. 3. They Have a Defined Trading Edge

    I see a lot of talk on the internet about the need for a trader to develop an edge and define it. And, if I’m honest, most of what I’ve read out there is pretty alarming.

    It’s little wonder why so many traders struggle to understand what an edge is and how they can develop one of their own.

    So what exactly is a trading edge and why is it important?

    An edge is everything about the way you trade that can help put the odds in your favor.

    It’s a combination of the time frame you trade, the price action strategies you use, the key levels you’ve identified, your risk to reward ratio, and other factors. It even includes your pre- and post-trading routine.

    How do you handle losses? What do you do when you win? These are all things that make up your trading edge.

    Think about it like this…

    What allowed Brazil to win so many World Cups in soccer (football to most of the world)?

    Was it the passing? Maybe the shooting?
  4. It was everything. Brazil had the “total package”, as they say. It was their passing, shooting, dribbling, movement of the ball, set plays and everything in between that gave them an edge over other teams.

    Your trading is no different.

    Although there are dozens of factors that make up your edge, you don’t have to master all of them at once. Nor do you have to master all of them to start putting the odds in your favor.

    It’s better to master one set of factors and then slowly expand to others to further define your edge. Not only is this a natural progression, it’s the preferred way to learn.

    Have you heard the saying, “jack of all trades, master of none”?

    If you try to master too many of these factors at once, you’re setting yourself up to become good (not great) at a lot of things. That isn’t what we want.
  5. Instead, master one thing at a time. For example, become an expert at identifying key levels. Then expand your skill set by learning how to determine trend strength. After that, set your focus on learning about pin bars.

    Those three things are all you need to witness a rise in your profit curve. Continue to expand your skillset in this manner and soon you will have a trading edge of your own.

    The key is to only tackle one or two factors (at most) at a time. Using a slow and steady approach will get you on the road to becoming a successful Forex trader in no time.
  6. 4. Successful Forex Traders Don't Try Too Hard

    But trying hard is what it takes, right?

    Not quite.

    This might apply to other ventures in life, but Forex is the exception. Successful Forex traders know that trying too hard is a sign that something isn’t right.

    This is different from studying hard. As a new trader to Forex, studying the market is highly recommended.

    For instance, you can’t spend too much time learning the ins and outs of the various currency pairs, or how to draw key levels. The harder you try to learn those particular topics, the better.

    However, trying to make a trading strategy work will only lead to destructive behavior, such as emotional trading. Similarly, trying too hard to find trading opportunities is a good way to lose money on subpar setups.

    Jack Schwager, the author of the Market Wizards series, said it best when he wrote, “good trading should be effortless”.
  7. I’m a big fan of this book series. In fact, I wrote a post that features several of his books.

    When I first started trading Forex, I remember spending countless hours studying setups over the weekend. I would often come back to my trading desk multiple times on Saturdays and Sundays.

    Then on Monday, more often than not I would end up taking a completely different trade setup only to watch the original trade idea move in the intended direction without me.

    Does that sound familiar?

    It happened because I was trying too hard. As soon as I stopped over-analyzing trade setups and trying to make them work, my profit curve started to rise.

    Now I spend maybe 20 to 30 minutes per day looking at my charts—the exception being the charts I post on this website, of course.

    Successful Forex traders have taken note of this, which is why they let the market do the heavy lifting for them.
  8. 5. They Think in Terms of Risk

    It’s often the smallest things in life that generate the greatest improvements.

    The concept of thinking in terms of money risked, as it applies to Forex trading, is no exception. It’s an extremely simple concept that can have a huge impact on your journey to becoming a top Forex trader.

    I’ve never met a successful Forex trader who doesn’t calculate their risk before putting on a position.

    You may think that’s an obvious statement, but a surprising number of traders don’t think about how much money is at risk before opening a trade.

    This is because they’re using an arbitrary percentage to calculate risk, such as one or two percent of their trading account balance.

    Think about your last trade for a moment. Did you define the exact dollar amount at risk before putting on the trade? Or were you more focused on the number of pips and the percentage of your account at risk?
  9. The convenience of Forex position size calculators has made it so that we never have to consider the dollar amount being risked. This convenience has caused a huge oversight.

    Don’t get me wrong, I use the position size calculator at the link above before each and every trade.

    However, I’m just as interested in the dollar amount at risk as the percentage of my account balance.

    Aren’t those the same?

    Yes and no.

    Obviously, 2% of $5,000 is $100. In that respect, the 2% and the $100 are essentially the same things.

    However, in terms of the way our mind perceives these two figures, they’re at opposite ends of the spectrum.

    I wrote an article a while back called, Pips and Percentages Will Only Get You So Far. In it, I talk about the need to think in terms of money risked vs. pips or percentages.
  10. This is because pips and percentages carry no emotional value. So when you define your risk on a trade as a percentage only, it triggers the logical side of your brain and leaves the emotional side searching for more.

    When you calculate your risk as a percentage only, you’re defining your risk but you aren’t accepting it.

    As soon as you convert that percentage to a dollar amount, your mind is able to visualize what $100 looks like. This enables you to determine if you’re prepared to lose that $100. In other words, is the trade setup in question good enough for your $100?

    It’s much easier to risk 2% without fully accepting the potential loss because it doesn’t carry the emotional value that money does.

    The best Forex traders know this. That’s why they always define their risk in terms of a percentage and a dollar amount.
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