I just realized I never posted this here: Bon appetit:
'AAA' - The Missing Link
Remember that demo account you had, where you doubled the balance in a matter of weeks? After all, it’s the reason you took your paycheck money and put it in FX to begin with. What seems to be the problem now that you have your own money in there?
I post articles filled with theory and potential solutions but I feel like this is a highly overlooked element that gets ignored far too much in this business. If there’s a ‘theory’ based article I don’t want you to skip, this is the one.
Here are three huge clichés about trading FX that we’ve all heard before, and separate the winners from the losers:
1. The trend is your friend
2. Let your profits run
3. Cut your losses short
They’re clichés for a reason. They work, and they’re true. But doing them is another story.
Today I want to add something to this list:
4. Take Action
Here’s a quote that needs emphasis:
“I watch trade after trade go by that would have been a winner, but the one I ended up taking was a complete loser.”
Some quick shots at this issue off of the top of my head:
1. Never hesitate.
2. Be on your toes. Focus in sharply on your chart and pull the trigger.
3. Control your risk. Most of the time you don’t take the trade because you are subconsciously aware of how much you could lose.
4. Curb the doubt. You know what you’re doing. You didn’t doubt your actions on the demo account.
5. Take the easy ones.
Overanalysis
You rightfully want and should plan out all of your trades, but don’t think that just because you didn’t spend 2 hours planning it out means it won’t be a winner. In fact, I find that the more I think about things the more things get screwed up, to say it plainly. Traders that have tendencies to overanalyze markets get caught up in a freakish pattern of actually undertrading, which is just about as bad as overtrading. In both scenarios the result is, many times, negative, depending on how you do things.
My daily plan is put together in a matter of minutes. I see what I need to see, and realize that there is only so much news out there that is truly going to shape the charts in front of me.
Ultimately, when someone comes into the market with a fist full of cash and moves it sharply, no fundamental data is going to tell you exactly when and where this is going to happen. But the technical levels and methods we use here will. Many of these levels are formed on an intraday basis, however, so constant monitoring plays a major role in your success.
Get comfortable, but not too comfortable
You’re not going to trade successfully if you’re under too much stress. By nature, I ‘m high-strung. I have always been this way and doubt it’s going to change any time soon. I take trades I’m comfortable with only, and doing this allows me to ‘keep peace’ with myself and let the rest follow.
Best way to do this? Profit. Build up a bank of initial profits, and your mind goes at ease on subsequent trades faster than you can imagine. Do what you need to do to post some initial balance higher than what you started with and the rest becomes much, much easier. A way to do this? Next point:
Take the Easy Ones
I use this as the slogan for this website for a reason. There’s no sense in taking trades that are ambiguous or pose a very low probability. Key word of this slogan is “TAKE”.
You actually DO know what's going on. The good versus bad subconscious
When we talk about our subconscious minds in terms of trading we generally refer to it in a negative sense, because usually it comes up when we’re talking about fear of losing. But there’s a good side to our subconscious, one which we don’t realize is there most of the time because we’re too busy remembering all of the bad things that have happened.
Anyone that has a basic knowledge of psychology might be familiar with the "Little Albert" experiement, where "Little Albert", just a child, was conditioned to be afraid of small, furry animals. We don't touch the stove because it's hot. We don't put our arms in spinning lawnmower blades for other obvious reasons. In trading, this subliminal conditioning which might have led us to a fear of losing is one which never gets us ahead, as we all know.
But here's the good news: when we learn how to trade, we are subconsciously storing a library of information in the back of our heads. Whether we realize it or not, its there. So when we see something on an intraday basis that is so obvious and so plain, are we taking it? Yes or no?
Most of you are pros already….I can see it in the charts that get posted and the comments that follow. But my experience knows full well that you’re not taking all of the trades you post. Don’t think your knowledge or education is any less than anyone else that takes up trading for a living. Do what is obvious, and use your initial judgment. It’s usually right.
Many times, you know EXACTLY what you’re doing, and how the market is behaving / reacting, but your doubts cloud your actions. Until finally, you get so fed up and bored at staring at charts, you pull the trigger on a losing trade.
“AAA” stands for “Action, Action, Action”.
Keep saying it. Easier said than done, I know. But get it done.
Naturally, I can't stress the importance of all of the other tenets I teach here (eg risk management, daily planning, etc), and this piece of the puzzle is in no way intended to undermine or contradict any of it. Put everything together, and most importantly, when you see it, take it.
'AAA' - The Missing Link
Remember that demo account you had, where you doubled the balance in a matter of weeks? After all, it’s the reason you took your paycheck money and put it in FX to begin with. What seems to be the problem now that you have your own money in there?
I post articles filled with theory and potential solutions but I feel like this is a highly overlooked element that gets ignored far too much in this business. If there’s a ‘theory’ based article I don’t want you to skip, this is the one.
Here are three huge clichés about trading FX that we’ve all heard before, and separate the winners from the losers:
1. The trend is your friend
2. Let your profits run
3. Cut your losses short
They’re clichés for a reason. They work, and they’re true. But doing them is another story.
Today I want to add something to this list:
4. Take Action
Here’s a quote that needs emphasis:
“I watch trade after trade go by that would have been a winner, but the one I ended up taking was a complete loser.”
Some quick shots at this issue off of the top of my head:
1. Never hesitate.
2. Be on your toes. Focus in sharply on your chart and pull the trigger.
3. Control your risk. Most of the time you don’t take the trade because you are subconsciously aware of how much you could lose.
4. Curb the doubt. You know what you’re doing. You didn’t doubt your actions on the demo account.
5. Take the easy ones.
Overanalysis
You rightfully want and should plan out all of your trades, but don’t think that just because you didn’t spend 2 hours planning it out means it won’t be a winner. In fact, I find that the more I think about things the more things get screwed up, to say it plainly. Traders that have tendencies to overanalyze markets get caught up in a freakish pattern of actually undertrading, which is just about as bad as overtrading. In both scenarios the result is, many times, negative, depending on how you do things.
My daily plan is put together in a matter of minutes. I see what I need to see, and realize that there is only so much news out there that is truly going to shape the charts in front of me.
Ultimately, when someone comes into the market with a fist full of cash and moves it sharply, no fundamental data is going to tell you exactly when and where this is going to happen. But the technical levels and methods we use here will. Many of these levels are formed on an intraday basis, however, so constant monitoring plays a major role in your success.
Get comfortable, but not too comfortable
You’re not going to trade successfully if you’re under too much stress. By nature, I ‘m high-strung. I have always been this way and doubt it’s going to change any time soon. I take trades I’m comfortable with only, and doing this allows me to ‘keep peace’ with myself and let the rest follow.
Best way to do this? Profit. Build up a bank of initial profits, and your mind goes at ease on subsequent trades faster than you can imagine. Do what you need to do to post some initial balance higher than what you started with and the rest becomes much, much easier. A way to do this? Next point:
Take the Easy Ones
I use this as the slogan for this website for a reason. There’s no sense in taking trades that are ambiguous or pose a very low probability. Key word of this slogan is “TAKE”.
You actually DO know what's going on. The good versus bad subconscious
When we talk about our subconscious minds in terms of trading we generally refer to it in a negative sense, because usually it comes up when we’re talking about fear of losing. But there’s a good side to our subconscious, one which we don’t realize is there most of the time because we’re too busy remembering all of the bad things that have happened.
Anyone that has a basic knowledge of psychology might be familiar with the "Little Albert" experiement, where "Little Albert", just a child, was conditioned to be afraid of small, furry animals. We don't touch the stove because it's hot. We don't put our arms in spinning lawnmower blades for other obvious reasons. In trading, this subliminal conditioning which might have led us to a fear of losing is one which never gets us ahead, as we all know.
But here's the good news: when we learn how to trade, we are subconsciously storing a library of information in the back of our heads. Whether we realize it or not, its there. So when we see something on an intraday basis that is so obvious and so plain, are we taking it? Yes or no?
Most of you are pros already….I can see it in the charts that get posted and the comments that follow. But my experience knows full well that you’re not taking all of the trades you post. Don’t think your knowledge or education is any less than anyone else that takes up trading for a living. Do what is obvious, and use your initial judgment. It’s usually right.
Many times, you know EXACTLY what you’re doing, and how the market is behaving / reacting, but your doubts cloud your actions. Until finally, you get so fed up and bored at staring at charts, you pull the trigger on a losing trade.
“AAA” stands for “Action, Action, Action”.
Keep saying it. Easier said than done, I know. But get it done.
Naturally, I can't stress the importance of all of the other tenets I teach here (eg risk management, daily planning, etc), and this piece of the puzzle is in no way intended to undermine or contradict any of it. Put everything together, and most importantly, when you see it, take it.
. I'm happy, if not overjoyed, to hear things like this. We do have a very selfless community here and it shows in all the posts, comments and help that backs it all up. FF has always been a winner in that respect. 
