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A Trading Mindset: Books To Give You A Mental Edge

Professional trading and training can be like a marathon that never seems to end. Simply trading each and every of the +225 trading days a year isn’t actually healthy for the learning process and skill development.

There are times when we have to spend more time reviewing and less time trading. There are also times when we need to do more study and training than trading.

Traders often tend to be a passionate bunch and love to digest good reading material.

As someone who consistently reads 1-2+ books per week, I’ve built up a decent library, particularly around trading and the trading mindset.

In today’s article, I’m going to share half a dozen forex trading books, centered around the trading mindset and building a successful traders mindset. I’ll give a brief description of each one, plus a link to the book on Amazon so you can order whichever you feel most drawn to.

It should be noted, most trading lists like these will typically share some of the staples, such as Market Wizards or Trading in the Zone. Since these have been done and done time and time again, I’ll be sharing some alternative forex trading psychology books which share a unique perspective on trading, mindset, success and training.

Enjoy.

#1 The Playbook by Mike Bellafiore
I’ve talked personally with Mike before. He’s one of the good guys in the industry doing some unique work for traders, training traders and the industry. He runs SMB which is part prop desk, part training program. With decades of experience in trading and running a trading desk, Mike has a unique perspective on trading, training traders and what it takes to become successful.

If I was ever to work/trade for a team, I’d probably work with them.

the playbook mike bellafiore

This is probably the longest forex trading book review of them all since I have personal experience with Mike, but his unique approach to trading also applies to the mindset. In The Playbook, he shares a lot about working with his trading team, getting them through the same obstacles we all experience.

He shares his insights into working with traders who aren’t cutting it vs. the ones who show potential, guiding them towards success.

He puts a tremendous focus and effort on mindset. Two quotes that stick out from the book are;
1) “You do not become a great trader by being shown cookie cutter technical setups and then soon become successful. That is a myth from what I call Trader Disneyland. It would be wonderful if Trader Disneyland existed, but it is marketed and spun that it does, yet it doesn’t.” (That means you Nial Fuller & Jonathan Fox)

and

2) “Many novice pedestrian traders focus on the next position. Consistently successful traders focus on the process and care little about the outcome of the next trade. The distinction is enormous.”

There are many gems in this book, including the actual ‘Playbook‘ idea he shares, but definitely a top read in my library for a traders mindset.

#2 The Way of the Fight by Georges St. Pierre
The Way of the Fight? What does this have to do with trading?

Yah good question. Georges St. Pierre is a Mixed Martial Artist. He is a former 2x World Welterweight Champion in the UFC and holds several records that still stand to this day.

Not only being one of the good guys of the world of mixed martial arts, Georges is a trailblazer in terms of training, preparation, mindset, and integrating many styles seamlessly.

In his book The Way of The Fight, he shares his experiences, challenges, training methods, and how he personally and mentally approaches mixed martial arts at the highest level.

georges st pierre

Two gems that stand out from this book are;

1) “Almost anybody can be greatly successful. However most are not willing to go through the process and just want the result. It’s having to go through the process that stops people, not their limited potential.”

and

2) “If your enthusiasm is continually diminished by defeat, you will not have enough mental fuel to survive the learning curve.”

Definitely worth a read. Inspiring, challenging and clarifying.

#3 The Hour Between Dog & Wolf
Former trader turned Neuroscientist, John Coates spent almost a year studying an entire trading floor of institutional traders. With his training as a Neuroscientist, he shares some amazing information about how the brain and body works through the typical days of trading for professional traders at the highest level throughout an entire year.

In The Hour Between Dog & Wolf, you’ll learn more about your brain and body than any book I’ve seen out to date.

Ever had that ‘gut feeling’? You’ll learn about that. Want to know what stress hormones do to the brain, body and performance? You’ll find out in here.

A must read for traders wanting to learn about their brain, body and how trading affects them both.

#4 Cultures of Expertise in the Global Currency Markets by Leon Wansleben
This is a advanced forex trading book I covered in an article before (click here to read the full article and review), but had to mention it again.

Leon Wansleben is a sociologist by trade who also gets to spend time watching an entire FX trading desk. You’ll learn about how the traders work with the analysts, how they trade on all time frames, including intra-day lower time frames (Sorry Nial Fuller & Johnathan Fox for being flat out wrong again), what the bulk of their trading day is like, and more.

He covers how the top traders manage risk with exceptional skill while building emotional courage and stamina to survive the learning curve. He also goes in depth how they are trading price action and order flow, often in combination with fundamental analysis.

Another must read for getting a unique perspective on the trading mindset.

#5 Earn the Right to Win
After losing a coaching job, Tom Coughlin was found sitting at the NFL combine, which is where the potential new college grads will show off their skills and physical traits, hoping to get noticed by coaches and scouts for standing out.

While taking detailed notes on every player there, Tom was greeted by a friend in the industry who said this to him:

“Tom, what are you doing here? You don’t have a coaching job.”

Tom’s response says it all, “Not now I don’t.”

Tom has won two Super Bowls with the NY Giants. He is the oldest coach to ever win one, and has done an impressive job, often times taking the teams with the lowest winning records into the playoffs, and coming out champions.

When you finish this book, you’ll see the value of preparation, how managing one’s time and maintaining discipline leads to success. A great book from a great guy in the NFL.

#6 How to Be Like Mike by Pat Williams
Anyone who has been a follower of this blog and forex training site would already know I’m a big Michael Jordan fan. In this book Pat Williams goes through the many phases of Michael Jordan’s career, from his early failures in High School, to coming back stronger, to his winning the NCAA championship at UNC, to his early struggles at the bulls, and onto his 6 NBA titles.

You’ll learn more about MJ, and all the amazing little things he did in this book than any documentary I’ve seen yet. Sharing perspectives from players and coaches around him or against him, along with other greats in sports, you’ll see why MJ is and continues to be an inspiration, sharing a unique mindset on success.

michael-jordan-obstacles-dont-have-to-stop-you-2ndskiesforex

Three quotes of the hundreds I’d like to share are below:

1) “Success isn’t something you chase. It is something you have to put forth the effort for constantly; then maybe it’ll come when you least expect it. Most people don’t understand that.”

2) “I was sitting on the bench and MJ came dribbling past us at full speed. Then he shifted into another gear and went to the hoop. I’ll never forget that fire in his eyes, that look of determination. It scared me to see that look. I’ve never seen it before. I’ve never seen it since.”

3) “You can’t turn it on and off like a faucet. I couldn’t dog it during practice and then, when I needed that extra push late in the game, expect it to be there. But that’s how a lot of people approach things. And that’s why a lot of people fail. They sound like they’re committed to being the best they can be. But when it comes right down to it, they’re looking for reasons instead of answers.”

A treasure trove of a book, and something I continually go back to.

In Closing
Whether these advanced forex trading books were from traders directly, or from high performers in other fields, you’ll notice several patterns in their thinking and mindset.

Most focus on training, preparation and process more than result. Most struggling traders have this equation reversed.

Most have a highly evolved training routine, and work at their chosen skill every single day. There are no lazy traders or examples of success from being lazy (sorry again Nial).

And most consistently, they realize having skills is one thing, but having a stronger mindset is far more powerful.

Food for thought, but I hope this gives you some enjoyable reads.

A Message to Traders for 2015 (By Chris Capre)

chris capre trading office new years eve
Hello Traders,
I wanted to share some holiday/new years wishes for our members, to struggling traders, and the club of those wanting to become successful. These are my sentiments, hopes and wishes for you in 2015:
People are often unreasonable, unkind, irrational & self-centered: Forgive them anyway.
If you are kind, people may accuse you of selfish, ulterior motives: Be kind anyway.
If you are successful, you will win some unfaithful friends and some genuine enemies: Succeed anyway.
If you are honest and sincere people may deceive you: Be honest and sincere anyway.
What you spend years creating, others could destroy it overnight: Create anyway.
If you find serenity and happiness, some may be jealous: Be happy anyway.
The good you do today, will often be forgotten: Do good anyway.
Give the best you have, and it will never be enough: Give your best anyway.
-credited to Mother Teresa
May good health, abundance and clarity be with you in 2015.
Kind Regards,
Chris Capre

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(Video) Pyramiding Trading Strategy +200 Pips

In this video I share two live trade setups using a pyramiding trading strategy. The goal of pyramiding into trades is to maximize profits when trading with the trend, adding onto positions at key points thus compounding profits and +R.

Here’s the transcription for this Pyramiding Trading Strategy video:

“Hello traders here, Chris Capre, 2ndSkiesForex.com.

Got another live price action trade setup on the dollar yen this time, actually got two trades, so I’ve added on to my positions.

I’m going to explain the price action analysis behind why I got in this trade, what level I bought at, why I bought here, where my stop loss was, how I’ve adjusted the first position, why I got in the second position, and my targets.

So let’s get into this.

Right here as you can see, this is my first entry on the trade, so we’re still in a bowl trend right now, so I’m, because the trend is volatile, I’m looking to buy on pullbacks, if it was a non-volatile or highly imbalanced trend, then I would be looking to trade shell pullbacks or breakouts.

But this is not, we’re in a volatile trend, so I’m looking for pullbacks to prior resistance levels, turn support, or role reversal levels.

So after forming a prior swing high here, we broke above it, stopped at about 115.50, pulled back to 114.10 roughly, went right back to the same resistance, sold back off, and then started to slow down.

The selling just sort of slowed down, you can see all these wicks here, suggesting buyers are willing to step in just above the level.

Eventually, they got to the level, so I got in on the level, I didn’t wait for the candle to complete itself, I wasn’t trading a pattern, I wasn’t trading any sort of one or two **or** pattern, or anything like that.

I bought on the level because that’s where I felt that the buyers were going to come back into the market, and they ended up doing that, they went a little bit past this here.

My original stop was right about here, it was about 46 pips below, so I got in at 114.09, my stop was at 113.63, so 46 pips, and since the market took out the prior double top and highs and went past that, then after that I adjusted my stop below here on this position.

So, why did I choose to put my position or my stop-loss on my first position right here? So, my current stop-loss is at 114.61, which is 52 pips, so, +1R is locked in.

Why did I use that location? Well, strong buying interest emerged shortly after the level here, and, you know, bought it for 6 or 5, or 6 2R, 6 2R candles in a row, so 12 hours in a row.

Impulsive buying, followed by a corrected pullback, followed by more impulsive buying. so, if you look at this leg here, compared to this one, this one’s sharper, which means that either the current bowls added on to their positions on a pullback, or new players came in to help push this thing higher.

My guess is the latter, newer players came in, adding to the positions that were long, and so, if a fair amount of new players came in and added on to their positions here, ahead of resistance, with the intention of taking it out, then I suspect that any pullbacks towards here, would be defended.

So I put mine just below this here and literally a pip below this, at +1R right now.

Now, the prior resistance here, which can be considered to be here to here, acted as support initially, the pair bounced off of 15, 115, re-attacked 116, then sold off, but then it’s kind of slowed down again a bit here, and so if we look at say, the 15 minute chart here, we can see, you know, the market was slowing down into it, some buyers were trying to push this thing back up.

It broke below 115 and made a new intraday in low, but then immediate buying ensued after that, and that didn’t really make sense to me, or it does, in the sense of if the bears are really in control, they would have been able to keep pressing and pushing lower, but they didn’t.

Bulls stepped in, so I’m guessing this was some sort of stop flush, maybe people bought at 115, and so, they bought up, market pulls back to 115 and then the buyers come in really strong and earnest and push back up again another, what, hour and a half of straight buying.

I bought once we got back up above this level, and so I got in at 115.19, and so I’m currently up 44 pips on that one, adding on to the position.

Since then, the market has held above this former resistance, now support, and so it’s going to retest the bears at 116.

Because it’s been in a large range and it continues to find buying interest, I think it’s going to make a decent challenge here, if it clears it, then I’ll start adjusting the stops to lock in more profit.

So, I have essentially added on to this position, because I expect the market to continue moving. The stop loss on the second position is just below the intraday low, and so right now, the stop is, the entry is at 1519 and the stop is at, it should show me here, the stop is at 114.87.

I literally have about a 32, roughly, 32 pip stop, so I’m up +1R on that one there.

The other position is up over +3R, so about +4R right now, and again, once we take out 116, then I’ll start adjusting the stops a little bit higher, I’ll definitely lock in some profit on the second position.

In fact, if it holds above 116 nicely, and correctively pulls back to it, then I may add on to another position here, expecting this market to continue to move.

Now in terms of where my targets are, zooming out to the weekly chart, my first target is actually the higher position, the second position that I added on to.

So, that target is right here, just under 120, I’m suspecting it may run into some resistance, just a little bit short of it, maybe 118.50, 119, but barring that it can clear 117.73, which was resistance over here, and some over here.

Then from here, I’m expecting it to make it up to at least towards 118.50, 119, and then probably run into some seller, maybe some auction players who will protect 120, so I’ll take profit just before that there.

The second position, if the market should break 120, and then they get past 121 and a half, then I’m going to expect it to challenge this peak here at 123.40, roughly. So that’s back from 2007, and so at that point, then I expect some major sellers to come back in, or at least some heavy profit taking.

So, if you look and do the math of that, going back to the two hour chart, so the first position I got in at 114.09 and that had a 46 pip stop. The final target on that one is 123.21, so we’re talking a 912 pip target, with a 46 pip stop loss, that’s a 19.8R. Will it get there in a straight line?

Possibly, possibly not. It may, the market may start to reverse here, collapse below these lows, and then trigger my stop at 1R, that’s a possibility. But, if it can take out 116, and as the market progresses, I’ll trail on, continue to lock in profit and take advantage of it. If it doesn’t, then I want to be out of the trade.

The second position up here, had a 32 pip stop, and with a target at 1990, has a 471 pip target, so we’re talking a +14.7R on that one there.

So, all in all about a +33R available on this one there, 34R, but that’s if it makes it all the way up, that could take some time, and maybe it won’t, maybe the market won’t go that far, maybe it’ll stop here, maybe it’ll stop at 117.70.

Again, my intention is to capture as much of this as I can, and add on positions when it looks appropriate, when the price action is supported of it, and if the market kicks me out, on my trailing stops, then so be it.

I’m already up at this point, you know, +3, 4R between the two positions, if the first one gets stopped out for -1R, I still have at least a couple R locked in on the second one there.

So, I hope you enjoyed this video, this price action commentary, the analysis behind it. One last point I do want to make about this here is, this trade right here, so, with the 32 point stop, the high on the day was 115.72, so I was already up about plus 60 pips on this one here.

Remember that thing I said in the last video? That you shouldn’t have to wait, more than a day to get +2R? Well this one thing puts 2R within a very short period of time.

Again, if it’s taking you days, and days, and days, and days, maybe weeks or holding a week to hit +2R, then your entries are inaccurate, and your stop loss isn’t precise enough, and you have 2R to take profits or inefficient to take profits.

There’s no reason why you should have wait days on end for +2R, it happened every single day. This one did in about 23, 24 hours, this one did it inside a day.

So, I hope you enjoyed this. Please subscribe to the channel, comment anything below, check out our price action course at dev2ndskies.wpengine.com.

These are the same strategies I teach, and if you would like to learn how to make trades like this, then feel free to join the course and learn these same methods. So I will bid you all adieu. Good luck trading everyone!”

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(Video) Forex Price Action Live Trade Setup +142 Pips AUDUSD

Here is a live price action trade setup I took on the AUDUSD which ended up with a net profit of +142 pips.
I’ve also attached a screenshot of the broker trade report demonstrating this was a live trade and what the net profit was as I didn’t get a screenshot before the green arrows went away.
screenshot broker statement live price action trade +142 pips profit audusd

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(Video) Live Price Action Trade Setup +7R | +216 Pips Profit

Here is a live price action trade setup I made on the EURJPY, using only a 30 pip stop and a +216 pip target. The trade profited +7R, with the final trade result and screenshot below.

eurjpy 2hr chart live price action trade oct 31 2014 v1

Enjoy this EUR JPY forex trade video and want to make trades like this? Join my Price Action Course where you can get access to my daily trade setups commentary, live trade setups forum, private member webinars, and more.

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(Video) Live Price Action Trade Setup – Dow Jones

Here is a video of a live price action trade setup on the Dow Jones showing my entry, SL and TP. This trade ended up profiting +7R after holding the entry level perfectly.
Watch the video for  a detailed description of the price action context, along with my strategy for taking the trade, SL and TP placement.
Want to make trades like this? Click here to become a member of my Adv. Price Action Course.

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When Trading is Breaking Bad: 6 Tips for Turning Things Around

when trading or live is breaking bad 6 tips for turning the ship around 2ndskiesforex
We’ve all had moments where life seems to be getting the best of us, where things appear to be going in the wrong direction. Health, family, money, trading…any one of these can test our confidence and make us doubt what we are doing.
Sometimes the waves of life come faster and harder, like you are struggling just to tread water. Perhaps you are going through one of those times this year with trading (or life).
Below are six tips to help you turn the ship around when trading (or life) is breaking bad.

1. Do Something to Help Someone Else

One snowy winter day around the age of 12 when I was feeling quite down, I was wondering what I could do to shift my state from a negative one, to a constructive one.
I walked outside my house and noticed my neighbor (Mr. McDonald) who was in his early 60’s shoveling the heavy snow which had been falling all day. I’d helped others before, and noticed how I generally felt better after doing so. Thus I grabbed my shovel, walked over to his house, and started helping. 1.5 hours later, the task was done and I wished him a good evening.
Walking home, I noticed something shifted. I felt better, and wasn’t so absorbed in my personal situation.
This is what helping others does – it lifts us out of our self-absorption. It gets us focused on uplifting our energy while having a positive impact on others. Often times, this method alone can help shift your state, so try finding someone who could use your help.

2. Comedy Can Change Your Genes?

In a research experiment by Dr. Hayashi in Japan, he studied diabetic patients for changes in health by having them watch an hour long comedy show (vs. patients that didn’t).
Fascinatingly, the patients watching this program had up-regulated a total of 39 genes, 14 of which directly impacted the natural killing cell activity of the body (thus boosting their immune system to fight the disease).
On top of this, even though the 39 genes had no direct correlation to blood-glucose regulation, patients who watched the comedy showed improved blood-glucose levels (key for fighting diabetes). Simply put, laughter not only helped increase their immune system, but also change their genes (up-regulated them).
Try spending 30 minutes a day watching something you find funny and see if it shifts your mood. My personal favorites are The Daily Show with Jon Stewart & Last Week Tonight with John Oliver.

3. Fix Something that Needs Fixing, Clean Something that Needs Cleaning

When I was a kid, I wasn’t a big fan of ‘chores’, and I’m guessing many of you felt the same. Now, I have the opposite view. If I ever feel like some aspect of my life isn’t moving forward, or the way it should, I usually go find a project to work on.
This could be something in my house which needed cleaning (a closet, patio, office…) or something I needed to go fix or buy for the place. By fixing or cleaning something, we accomplish two major things; 1) we move our bodies, which helps increase our energy, and 2) we uplift our environment.
Try cleaning your office (desk, floors, unnecessary objects) and don’t stop till you are done. Then notice how you feel.
Anytime you increase the energy of a space, you create a more conducive environment to work and live in. This the very reason every house, spa and travel magazine shows really clean and well organized places – nobody likes to visit a messy house, but everyone likes coming to a space that is taken care of.

4. Get some Exercise, Do Yoga or Practice Meditation

With thousands of scientific studies validating the benefits of the above to our body and brain, anyone of these can improve your neuro-chemistry, raise your energy, or help you feel more calm and relaxed.
If it’s the first one (exercise), try doing it outside as nature tends to have the best environment for resetting our energy. With the latter two (yoga/meditation) try finding a calm space to practice these.
If you are feeling down after several failed trades, movement is generally more helpful. If you are feeling more agitated, stillness is preferred. Simply feel what is most relative to your case, and apply the remedy. More than likely you’ll notice a difference, even if it’s for a short moment.

5. Be An Optimist vs. a Pessimist

Yep – attitude affects our health and performance. The Mayo Clinic, Johns Hopkins, Yale (and others) have conducted experiments across decades studying thousands of people who were considered optimists or pessimists.
The results: optimists were more energetic, happier and peaceful. They lived 7-11 years longer on average, had lower blood pressure, cholesterol levels, and a healthier body weight.
Contrast this to the pessimists who not only lived less (on average), but had a 5x greater chance of getting coronary heart disease.
The lesson being: if you want to have a greater chance of turning your trading challenges (and life) around? Be an optimist. This will help you keep the right perspective when trading.

6. Keep Moving Forward

Whether it is learning how to trade forex successfully, martial arts, archery or sports, you will experience periods where it feels like there is no growth. These can run for long periods of time, and may seem like you are going nowhere.
The problem is, you cannot really predict when your growth will increase. Sometimes your learning process will just consolidate for weeks, months, maybe years, and then all of a sudden – you experience that spike in growth.
These spikes are often not tied to one event, but many, so we cannot try pinning our success on taking one specific action. We have to do as many things right as possible for longer than we think, or you may miss that huge leap in growth.
Just keep moving forward towards your goal of becoming a profitable trader. More than likely, with enough effort – you’ll jar something loose which allows you to take that next step.

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Live Price Action Trade Setups | Oct 15th

This week I want to share a few price action trade setups from one of my students, along with some of my personal live trades. Although I had several trades that were highly profitable, my student actually had some really impressive trades, so he’ll get the top nod for the week.
Here they are below, including one I just completed less than a few hours ago.

Live Trade Setup #1: EURGBP +130 Pips
eurgbp live price action trade 2ndskiesforex 30m chart oct 15

This is one of my personal live price action trades on the EURGBP. On October 13th, in the private member trade setups commentary, I told the members that I was flipping from short to long on the EURGBP, and suggested looking for a pullback between 7908 and 7890.
The pair pulled back to 7908, and as you can see from the chart above, this was an excellent trade location as the trade literally never went negative.
My entry was based on corrective pullback anticipating the trend would continue (not a price action signal or pattern), with me entering mid candle as price hit my limit order.
Literally just a couple hours ago, I took profit, and this seems like the prudent move as the pair has since sold off from the highs.
Total profit was +130 pips with a 28 pip stop, for a +4.65R profit in less than 1.5 days.

Live Trade Setup #2: Dax Trade Profits +3.5R
live trade setups 2ndskiesforex dax

This trade comes from a student, who probably like you, has been struggling with their trading. Right away, he got to work, training hard with our course strategies and lessons.
The result is his performance now taking a seriously good turn as of late.
In this trade above, you can see his trade entry, stop loss and take profit. He was viewing the corrective pullback + double top as a great opportunity to trade with the trend.
He targeted the bottom of the range, which was a prudent move as the index bounced heavily, grabbing +3.5R in less than 2 hours.
NOTE: We’ll discuss his other highly profitable trade shortly, which he made just a few hours earlier.

Live Trade Setup #3: $CAD +170 Pips & +3.77R
usdcad live price action trade 4hr chart 2ndskiesforex oct 14

On October 7th in our daily member trade setups commentary, we suggested looking to buy the USDCAD between 1.1120 and 1.1070 to get long and trade with the trend.
Looking at the chart above, we traded this play, buying at 1.1100 with a stop at 1.1051 and a targeting the prior resistance at 1.1270 for +170 pips and +3.77R.
Had you been looking for a price action setup, you would have missed this trade completely. Food for thought.

Live Trade Setup #4: 2nd Dax Trade for +8R!
live price action trade 5Min DAX 8R

Remember that student who had the +3.5R trade on the Dax we showed earlier? Well this is the trade that came just hours before.
Trading off the 5 minute intra-day chart, this student spotted a good with trend trade following a corrective pullback.
Selling just below 8957, he literally called the top of the day (within a few points), grabbing +140 points on a 17 point stop for an amazing +8R in 2 hours!
Hence between those two trades, he put +11.5R of profits in his account within 4.5 hours, all using the 5 minute chart.

In Closing

As you can see, we don’t just give vague trade recommendations about what the market ‘might do from here‘, or occasional trade ideas 3-4x per month. We actively trade the markets, sharing many of our live price action setups (and give more in-depth commentary to our private members).
Also by now, you should clearly see the power of learning to trade price action beyond your ordinary price action signals (which would have missed all these trades).
If you’d like to learn more about becoming a member and making profitable trades just like the above, click here.

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Set and Forget Trading – When To Use It and When Not To

Set and Forget Forex Trading with 2ndSkiesForex

A while back I heard a professional trader who ran a trading desk sum up ‘set and forget forex trading‘ strategies in one sentence:

“That is like getting in a car, putting your foot on the gas, and expecting to get from point A to point B without crashing – complete stupidity.”

By and large, I have to agree with him. There is a lot of confusion around set and forget trading, and it’s likely costing you money.

In today’s article, I’ll begin by sharing the fallacy in this way of thinking and how our brains are wired in relation to trading. Then I’ll cover the ONLY TWO SCENARIOS you should use a forex set and forget trading strategy.

From here, I’ll talk about evolving markets and how this relates to set and forget forex trading. After this, I’ll end with talking about how you limit your profits and how to avoid capping your growth as a trader.

The Irony & Fallacy of Set and Forget Forex Trading

The irony (and fallacy) hiding behind this one size fits all approach is it assumes you are responsible enough to make a good trade entry, stop loss and take profit, BUT you are clearly not mature, intelligent or responsible enough to manage a trade. How ridiculous.

To be fair, our brains are not wired for all the mechanics of trading, and our natural bias is negative towards most things, especially threats.

The translation of how this bias affects us is: we are more likely to close a trade when it goes against us (threat) vs. working for us (beneficial). And I’m sure you have experienced this yourself.

The Scenario
You are in a trade, everything is going for you, the price action is impulsive in your favor, you are in profit…and then…the first major candle goes against you. Immediately you think the move is over and you close the trade to lock in profit.

Has this happened to you? If so, its your brain and reptilian brain working against you.

(NOTE: For a great trading article on the negative bias in trading, read Why We Close Winning Trades Early)

neocortex reptilian brain 2ndskiesforex

Change & Growth Come Through Re-Wiring Your Brain

To be successful in trading (and anything), you have to re-wire your brain and change your habits. This is best done through repetition, focused awareness and skill based training.

We can either walk on eggshells around our negative biases (no growth), or we can learn to get past them (growth). Simply turning to a one size fits all approach for taking profit (or managing the trade) isn’t the answer. It leaves you crippled in terms of growth and assumes you’ll never get over it.

That is like saying you should never drink a beer (or glass of wine) because you’ll never be able to control yourself. Or you should never get a drivers license because you’ll never be responsible enough to drive on public roads. Ridiculous.

In reality, set and forget forex trading is simply ONE method for managing the trade. And it should (in reality) ONLY be used under two circumstances:

#1: You only have one, maybe two hours per day, and have no real way to manage your trades. Perhaps you work full time, have kids, and are just really really busy with a super tight schedule.

In this case, you are probably best employing a forex set and forget strategy as a profit taking method using daily and 4hr price action strategies, but there is a big assumption in this.

The Assumption
The scenario above assumes you are a) not trained in reading price action context, or b) your trade will likely hit its stop loss or take profit after you enter, but while you are busy.

Hence, unless you are not trained to read the price action context in real time, or the trade will close while you are at work, then you are a decent candidate for a set and forget forex trading strategy.

If your trade will take a few days, then this may not be the best method, because as it progresses, it may show signs it could go for a big runner. These are trades you have to take advantage of when they come, just like a really good poker player loads up on a strong hand.

pocket aces strong poker hand 2ndskiesforex trading
Once you get good at reading the price action context in real time, you can also trail your stop and reduce your risk as the trade progresses. Almost every professional trader will reduce risk as their trades advance.

Very few will look at it as a hell or high-water scenario, which is what you are saying when you use a set and forget trading strategy as your method.

The other scenario is below.

#2: If after exhausting all other methods of managing your trades (taking profits and adjusting your stop), and the ONLY baseline method which showed profitability, then you’d be a decent candidate for the set and forget method.

This one is pretty straight forward, and the risk of ruin needs to support your decision. Without it, you could have the numbers working entirely against you without even knowing it.

Thus, if you are that trader who falls outside of the two above reasons, you should explore other options, and develop an accurate baseline for gauging which method you use.

Markets Evolve Over Time

The bottom line is the market evolves as it progresses over time. This can happen intra-day, daily, or over days and weeks. Those that train and learn to adapt with such changes in real time will have their finger on the pulse and maximize opportunities.

finger on the pulse institutional trading 2ndskiesforex

This is what institutional traders do. They adjust and evolve their positions as the market does, just like a poker player will become more aggressive (or conservative), based on the players around him, and the size of his chips.

Just realize if you don’t explore other options for managing your trades, and train to get beyond your weaknesses, your growth will be limited, and your profits will reflect this.

Having A Curfew on Profits

But perhaps that doesn’t sway you. No problem, just imagine the following scenario:

It is the first week in May, 2013. You have just entered short on the AUDUSD on a break below the key support level around 1.0225. Your stop loss is just above the daily 20 EMA, so -100 pips, and your ‘set and forget‘ target is +200 pips, or +2R.

About a day later, it comes out on the news that George Soros has sold over $1 billion of the AUD. Considering Soros’s history, and that he doesn’t just get in and out in a day (along with the glaring fact other professional traders will likely pile on this trade), chances are this trade is going to run.

Yet…here you are, just a couple days later, saying ‘nope, I only set and forget because I ignore everything and cannot manage my trades responsibly, so I have this curfew on profits‘.

About a day later, you hit your +2R profit, thinking you are a darn good trader. This is your chart below.

set and forget trading 2ndskiesforex audusd chart 1

Looks great eh?

And then you see this…
set and forget trading 2ndskiesforex audusd chart 2

Keep in mind, this situation above happens on a micro-scale almost every day, sometimes many times per week.

So when you consider employing a forex set and forget trading strategy, realize there are other options, and this should only be used in very specific circumstances.

Also understand, if you choose to use this method while you have other options, you are a) putting a cap on your upside profits, and more importantly b) putting a limit on your growth and development as a trader.

There are many other methods for managing your trades regardless of what time frame you trade. For those wanting to learn more about these methods and how to leverage them in your trading, learn about my Trading Masterclass Course where you get access to our daily trade setups commentary, trader quizzes, private member webinars, live trade setups forum, and more.

Forex Giveaway!