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Trading the False Break Strategy Part 1

Key Talking Points:

  • False Breaks Offer Great Price Action Trading Setups
  • You Can Trade the False Break Strategy with Pin Bars and Engulfing Bars
  • Look for False Break Setups Trading With the Trend

Ever tried to enter on a forex false breakout breakout setup, only to have the trade immediately reverse on you? I’m guessing this has happened to you many times (present trader included).
With the market volatility declining over the last several years, false breaks can and will happen all the time. The key to avoid getting stopped out, and actually profit from these false break setups, is to understand the price action context which often precedes them.
In this two part article series, I will begin today’s discussion by defining a false break. Next, I’ll go over a common false break setup, which is trading the false break with trend. Then I will go over a fundamental false breakout strategy, and conclude by recapping the key points.
What is A False Break?
I would prefer to define a false break as one of the following two scenarios: 

  1. A break above/below a prior candle that fails to close above/below that candle
  2. A break above/below a key level, quickly reversing that level, and sparking a counter-trend move

Below is an example of the first type with a pin bar + false break:
trading the false break strategy 2ndskiesforex c1
In the chart above, you can see the arrow to the top left, showing a bullish move running into resistance. The pair then settles back, and makes a second attempt to take out this key level.
But on the top right, you can see it forms a pin bar + false break.
From an Order Flow Perspective
Looking at this from an order flow perspective, the bulls were in control leading up to the level, and were able to push past it. Either there was massive profit taking on their part, or they ran into heavy sellers a few layers deep behind the level.
Regardless, the sellers over-whelmed the buyers, and pushed the pair back below the key resistance level. After a second attempt to regain the level, the sellers realizing they had control, sold even more, pushing the pair down impulsively.
Trapping Traders
In most false breaks, there are ‘trapped traders‘, meaning traders who are caught long when the pair is about to go short, or vice versa. Those trapped traders once the trade goes negative, will likely be stopped out, & further fuel the counter-trend move.
The more savvy traders will exit manually when they realize they are trapped, while the slower traders will likely get hit for the full stop. There are price action clues to tell when you’ve been trapped, but that is for another article.
Trading The False Break Setup With Trend
It should not be surprising, one of the best false break setups occur when trading with the trend. This is because the underlying order flow is heavily imbalanced, meaning it’s heavily bullish or bearish.
When a false break setup forms counter-trend, it usually runs into buyers or sellers who are happy to take the pullback getting a better price. Their overall strength in the market makes it harder for counter-trend false breaks to be maintained.
This is why false breaks present such great trade opportunities.
Below is a classic example of trading the false break setup with trend:
trading the false break strategy 2ndskiesforex c3
In the chart above, starting with the top left, we can see the heavy impulsive selling. Eventually this leads to a bounce which hits the key resistance level 2x (marked by two red arrows). After forming a new low (red line at bottom), the pair bounces to retest the bears at the same resistance level.
Now note how the pair breaks above this level with a really large blue bar, closing at the highs. Ask yourself, if the bulls were really in control, how come they did not produce any follow through?
The next two doji candles showed no real strength or follow up buying, which should have been a warning sign to any bulls already long. Bears wanting to trade with trend, should have been looking for the false break and close below which they got on the 3rd candle.
Entry, Stop & Take Profit
With such a clearly defined trend and resistance level, there are two general entry techniques;

  1. Sell on Break back below the key level
  2. Wait for pullback setup to the key level

More aggressive traders who feel confident in their price action skills may sell on the break back below the key level. This may or may not offer the best price, but you may not get a second chance to enter if the sellers came in hard on the false break.
More conservative traders can wait for a pullback setup to the key level. If the false break is real along with the level, then the trade should hold and not go much into the negative.
I generally recommend placing the stop above the high (or below the low) of the false break by a few pips, depending upon the volatility and liquidity of the instrument.
The first target should be the other end of the consolidation. If you want to go for multiple targets, then the next key support or resistance level would be suggested.
To Recap
In today’s forex false breakout article, I talked about the price action and order flow behind a false break setup, and why it can be a powerful trade opportunity. I discussed the two types of false breaks and how to generally define one.
Lastly, I covered why to look for with trend setups trading the false break, giving the entry, stop and take profit methods.
When you learn to read price action in real time, you will begin to spot these false break setups more easily. As you get skilled in identifying them, you will avoid the common traps, and profit heavily from them as they offer great opportunities.
In the second part of this article, I will talk about using a false breakout strategy with pin bars and engulfing bars.

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4 Ways to Improve Your Trading

Why do some traders you know seem to profit consistently, while those green trading days elude you? Why do you find yourself consistently making the same mistakes over and over again?

Traders who are successful month in-month out, handle losses in stride. They are comfortable with losing periods, while maintaining discipline. And most certainly, they do not accept under-performance, constantly training to improve their game.

4 ways to improve your trading 2ndskiesforex
The good news is – you can be a successful trader who profits month in-month out.  Nobody is born to be a successful trader. These traits and characteristics can be learned.

Many of my profitable students, were not trained in any related field of finance. Yet they consistently make money.

Trading profitably is certainly possible for you, no matter where you are in your learning curve. But you have to work at it, and likely make a few adjustments from what you are already doing.

Here are 4 ways to drastically improve your forex trading.

1. Maintaining Commitment, Even During Challenging Periods
Throughout your learning curve in forex trading, the actions needed to get you there will not always be fun.

You have to love the process, and enjoy working towards your goals every day, regardless of the daily results.

If you were not being paid to trade, would you still love it, and enjoy the challenge? If so, you will maintain the commitment necessary to succeed.

2. Get Comfortable With Losses, and Losing Periods
How many emails have I received requesting a system with a high win rate? Enough to fill your inbox for a year.

By itself, the win rate does not guarantee profitability. Your risk of ruin does!

But I’m going to make a controversial statement here. That is:

Most un-successful traders who want a high win rate, are really asking for ‘compensation’.

What are they wanting compensation for? A lack of confidence. It is wanting something solid, yet virtually nothing is solid about trading.

Obsessing over a high winning percentage is short sighted. Directing your focus to continually getting better (i.e. on the process), is seeing the forest from the trees.

3. Intentions Must Be Consistent With Actions & Beliefs
If your goals, intentions & efforts in trading haven’t produced consistent results, there is likely one cause. You!

It is one thing to say or think, ‘I want to be a successful & consistent trader‘. But if the moment comes to fill in your trading journal, and you balk, then there is inconsistency between your conscious and unconscious mind.

Just like you may conceptually say ‘I want to be wealthy‘, but if you look around your house, and feel poor, you are not going to create wealth for yourself.

This is called ‘thinking in one way, and feeling another‘. Only when these two (thinking and feeling) come together in your mindset, do you produce results that match your intentions.

successful traders 2ndskiesforex
4. Ban Under-performance in Trading
What is one thing which without fail promotes under-performance? Excuses. Have you ever used excuses for your results in trading? If so, you are making it more probable you will under-perform.

The best way to ban under-performance in trading, is to ban excuses. Adopt a ‘no-excuses‘ approach to trading. Better yet – burn the following mantra in your brain:

I am responsible

You may not be in control of everything that happens in the market, but you are responsible for your performance.

In Closing
Ask yourself, how of the aforementioned forex trading tips and advice suggestions would help you in your trading performance? If you were to adopt the above suggestions, would they change your mindset and approach to trading?

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Why Does This Always Happen to Me?

why does this always happen to me 2ndskiesforex
Have you ever said this to yourself in trading? Most of us have, present trader included back in the day.
You don’t know it, but this statement is a trap. Unconsciously you believe you are a victim of cause and effect.
What you have to see is that you can ‘cause an effect’, particularly the ones you want.
A better question to ask yourself would be;
“How can I change my thinking, feelings and actions to produce the effect and results I am wanting?”
Doing this keeps you focused on the process first. This is how you accelerate your learning curve in forex trading.
This is employing a successful trading mindset.

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Finding Key Support & Resistance Levels Like a Pro – Part 1

Having trouble building your skill set for finding key support & resistance levels? Then you’ll need to train in finding them. The key lies is first identifying the price action context. Once you have this is in place, then you know what levels to look for.
In the beginning, we talk about one type of trend (volatile trends), and how to identify them. Then we discuss using this type of trend to determine what levels to find. We end by showing  how you can use Forex Tester 2 to help build your skill set in finding key support & resistance levels.
For those wanting to get the $50 discount, you can get this and order by clicking on the link Forex Tester 2 $50 Discount

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The Trading Mindset: Frustration Leads to Learning

I was listening intently to an interview of a professional athlete, talking about playing against one of the best teams in their league. Instead of being intimidated by the prospect of playing such a highly dominant team, they had the following to say;

“These are the games you really look for. They force you to test yourself, to find out what you are doing well, and what you need to work on.”
If there is a mindset or quality I’d like to install in every trader, it would be what this athlete was conveying. They looked forward to the challenge they were up against.
They weren’t worried so much about making mistakes, or not being able to handle the more dominant team.
If they couldn’t, it meant they had things to work on.
Frustration Leads to Learning
Developing traders need to build this type of successful mindset. Losses will happen, you will be frustrated at times, and the market will not always make sense. These experiences can last for hours, days, weeks, perhaps months.
How you respond to each and every trade matters more than you can imagine.

frustration leads to learning 2ndskiesforex
If you as a trader are going through, or have recently gone through a frustrating period – you have to let that ‘feeling’ of frustration be temporary. It is ok to experience stress in trading, but it is not constructive to define yourself by your frustration.

Frustration must lead to learning.
Better to have the approach that any losses, mistakes, or frustrations are learning experiences. That you actively seek out the challenges inherent in the markets.
Approaching every single trade as a learning experience, will help you see the bigger picture and build confidence in your trading.
Opportunities to Learn
Each trade and moment behind the charts is an opportunity to learn.
Are you really trading like a sniper, or just sitting on your hands waiting for some perfect setup? Are you trading to be right, or are you actively focusing on improving your skills? Are you working to accelerate your learning curve, or are you letting your emotions define your experience?
Frustration must lead to learning – in fact all trades must lead to learning. You either win, lose, or learn from each trade. The first two you cannot control entirely, but you can with the last. And which do you think leads to your development as a trader?
The best athletes, professionals, and successful traders learn from each trade, and maximize every chance to learn. This is part of building a successful mindset, which is essential and required for trading successfully.

michael jordan obstacles dont have to stop you 2ndskiesforex
Ask yourself, how would your trading experience and mindset differ if you looked forward to the challenges, and the frustrating moments, learning from each? How would this change your daily approach and thoughts when engaging the markets each day?

What parts of the above can you work on, and what have you noticed about yourself after reading this article?
Please make sure to comment, share your current experiences, and what you thought about these suggestions.

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Using Forex Tester 2 to Accelerate Your Learning Curve

One of the best things you can do to accelerate your learning curve is to do simulation trading. There will be times the market is slow, or you don’t have setups. If your only training is watching videos, and making trades in the market, then your learning curve comes to a halt when there are no setups. This is where forex simulation trading comes in.

In this video, we discuss how you can use Forex Tester 2 to accelerate your learning curve and build your skill set.

For those wanting to get the $50 forex trade simulator discount, you can get this and order by clicking on the link Forex Tester 2 $50 Discount

What If Your Trading Plan Cost You Money?

I recently got a daily forex trading plan from a new student and eager beaver who asked for some help with their plan. The moment I opened it, I realized it was incomplete and needed work. To be fair, they had gotten this template from another course, so cannot fault the student.

I generally suggest having two trading plans:

  1. The Day-to-Day Trading Plan which includes your daily procedures
  2. Your Business Trading Plan

What we’ll be focusing on here is related to #1 above. Below is the general outline of their current forex trade plan, which I’ll go over, show you what needs to be changed, and what is missing.

Their Current Trading Plan

  1. Introduction
  2. Price Action Signals to Trade
  3. Rating a Trade
  4. Time Frames
  5. Pairs/Instruments to Trade
  6. Risk-Reward Ratio
  7. # of Positions
  8. Position Sizing
  9. Stop Loss & Take Profit Rules
  10. Rules for Entry
  11. News Events
  12. Documentation
  13. Losing Trades

Do you see anything confusing, missing, or out of place here?

trading plan 2ndskiesforex

 

What I Would Change

#1: Introduction – I think this was a good start. However, two things in this introduction stood out;

a) the opening statement, ‘The goal of this plan is to avoid emotion-based trading‘
b) ‘the trading plan may be adjusted, and the rules edited‘

Lets start with A – If the goal of the trading plan is to ‘avoid emotion based trading‘, the current plan only helps for that day, but doesn’t get at the root cause of ‘emotion based trading‘.

Where should the real work be done for this? Prior to any trading, and in the ‘training’ phase! How? Proper training, building your sub-conscious skill set, and removing limiting beliefs.

For B – this is fine to allow the trading plan to be adjusted, but how often? The trading plan should be an evolving document as your level develops and grows as a trader. But put a time factor to this and stick with it.

I would have in the introduction why I am trading, what I am trying to achieve and what my daily goals are. More on this later.

#2: Price Action Signals to Trade – A military general doesn’t start their plan with tactics. They take all the information in to get a broad picture – i.e. the ‘context‘. In trading, this relates to understanding the price action context first. So this section needs to be later in the plan.

What would I put here? Pre-trading preparation, i.e. how will you prepare for each trading day (physically, mentally, market analysis, etc).

#3: Rating a Trade – We haven’t even gotten to our price action context first. This comes before rating a trade for quality. So this should be done here, starting with our top down analysis, how we find the correct context, then go from here.

NOTE: In this template from the other course, their highest point rating for a trade was ‘big size‘ for the signal bar.

Now let me get this straight – the size of the 1-2 bar pattern, is given the most importance? One bar out of the 30-50+ bars which comprise the validity of the signal?

confusion about trading
Seems like a confusion to me on what price action is about. Yet ‘Trading with the Trend’ is 5th on their list? How does one bar by itself, have greater value than the entire trend and order flow to this point?

Lastly, the 13-pt rating list completely rules out intra-day trading. A trading plan should be flexible enough to incorporate both.

# 4 & 5: Time Frames – by now, we are too far ahead of ourselves with this plan. Once we know the context, only then can we know the tactics (price action strategies) to use. We cover this in more detail with our course members.

One other thing about this is the fallacy that the time frame is more important than the instrument you trade. Should be the other way around.

Pairs/Instruments to Trade – Although this is completely necessary, I think in one section you can have the pairs/time frames you are trading.

# 6, 7 & 8: Risk-Reward Ratio/# of Positions/Position Sizing – The first one is completely irrelevant by itself without understanding the Risk of Ruin.

You can use my risk of ruin calculator to find yours. For more information on the risk of ruin formula, click on the link above.

Number of Positions – kind of irrelevant. Although you may have a fixed % equity risk per trade, what if you start your day, and realize 4-5 high quality setups on deck?

fixed percent equity risk model superior than fixed dollar amount graph 1 2ndskiesforex

My suggestion is to have a max risk per day, and per trade. If your max risk per day is say 5%, and you spot 5 trade setups, then you can risk 1% per trade. If only 2, then you can risk 2.5% per trade. As long as you keep the risk of ruin at zero, the number of positions should not be limited IMO.

Position Sizing – Can all be addressed under one section, which I’d label ‘Risk Management‘

# 9 & 10 & 13: SL & TP Rules/Rules for Entry – should be addressed in the strategy itself.

#11: News Events – I’d say make this part of the ‘pre-trading preparation‘, under the ‘market analysis‘ preparation.

#12: Documentation/Journal – I agree this needs to be part of your forex trade plan. But there is nothing in here about reviewing your trades, or end of the trading week analysis. Monthly, quarterly and yearly reviews would be recommended.

What About Training?

I generally recommend having a completely separate plan for training, very much like professional athletes have practice/training routines, which are separate from game-day preparation. Trading should be no different.

For those trading higher time frames like daily and 4hr strategies, I’d recommend using your non-trading time for practice/training. This is not just demo trading, reading books, or studying course material. We suggest going beyond this with live forward simulation trading, just like fighter pilots do simulators, or baseball players have batting practice.

practicing forex trading 2ndskiesforex

Our favorite tool for this is Forex Tester 2, which allows you to go back in time, and then live forward trade it bar by bar as if they were appearing in real time.

You can get a $50 discount on Forex Tester 2 by clicking here.

In Summary

As you can see, the template they were working with was quite confusing, lacking key things, and out of order. Had I been working off that trading plan and not known better, I would be approaching the market incorrectly every day, missing a dearth of things.

It is important to understand a professional trader will see things on a more sophisticated level than your traditional 1-2 bar pattern trader. Professionals, by default, can recognize opportunities beginning traders will not, like a good poker player can make money on more hands than a weaker one. This also goes for one’s daily forex trading plan, so having a more evolved one will give you a greater edge.

professional traders 2ndskiesforex
Ask yourself, how sophisticated is your trading plan? Does it feel unorganized, confusing and incomplete like the first template? Does it even include pre-trading preparation? What would you recommend adding to this trading plan?

Please make sure to share your answers, along with whether you agree or not, and why you agree/disagree.

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Book Review: Cultures of Expertise in Global Currency Markets

In a new series of articles, I will be reviewing books approximately once a month specifically related to trading. I am a fanatic reader, consuming on avg. 1-3 books a week, and often come across some great reads on trading, or building a successful mindset. Today’s forex trading book review is one my most recent reads Cultures of Expertise in Global Currency Markets by Leon Wansleben.

Book Review Chris Capre Cultures of Expertise in Global Currency Markets
Overview
The book is a solid study of traders and analysts at a top 10 bank in Germany, focusing on the FX desk. The author is a sociologist by trade, spending a lot of time analyzing the interactions between members on the FX desk.

It goes without saying parts of the book are highly ‘academic‘ in nature. This is key, because you will find yourself going through pages and pages of ideas which are aptly named ‘theories’.

We are traders – we deal in the reality of profits and losses, managing our risk models, emotions and mindset. Sociological theories by themselves will have little benefit to us. Regardless, the book has some highly valuable information, so onto the gems inside.

Pros
Want to find out a lot of interesting information on bank professionals? Then you’ll find this book interesting on such things as;
-how bank traders make trading decisions
-interactions with the analysts
-day to day activities

It is clear by the end of the book (if it wasn’t already), bank traders are highly aware of fundamental data/announcements. Sometimes this info is primary. Other times they are strictly concerned with the ‘flow data‘, or order flow and transactions from incoming hedge funds and participants.

Price Action & Intra-day Trading
One thing is clear – desk traders are primarily focused on the price action in real time. They are without a doubt trading intra-day on an active basis, while also building longer term positions in their book.

Hence, any ‘guru’ or ‘authority’ out there touting how ‘higher time frames‘ are the way the institutions trade,  has no idea what they are talking about and spouting  a complete fiction.

live price action trade eustx 50 for 4R in 30mins 2ndskiesforex

Interactions
The author does a really good job providing insights between the traders, analysts, salespeople and how they interact daily. He shows several diagrams of the layout, seating positions & conversations during specific meetings for an inside look into FX trading desks at large banks.

Traits of Top Traders
Another key point you quickly realize, is how the top traders manage risk, are incredibly disciplined, and have emotional courage to perform at the top levels.

Also you’ll begin to understand how critical intensive screen time is to developing a high level of trading skill. For those trading daily and 4hr strategies only, you won’t build a solid base of skill trading just 30 mins to 1 hr per day. Hence, you’ll need to augment this by accelerating your learning process, which I’ll describe how in a future article for those with full time jobs.

The Cons
Being written by a research fellow at a University, the book has a certain academic feel, which unless you are into academic theories, you will likely find these parts uninteresting.

My suggestion is anytime the author launches into a discussion about such theories, you can skip forward till they start engaging how the traders, analysts or salespeople act on a daily basis. This is where the real juice is for you IMO.

Another con is the price. Being over $100 – compared to most trading books, it’s on the upper end. You can ‘rent’ it for 1/4th the price, which would be my suggestion if you just want the nuggets inside.

In Summary
For those wanting an insight into the FX institutional world and how bank professionals trade, this will be an informative book. Most likely, it will change how you trade and approach the markets. That in and of itself means the book has value.

For those feeling like they should ignore fundamentals, you’ll probably find yourself re-evaluating this position. Minimally you’ll want to be aware of such events, and consider studying them a little bit further (without diving too intensely into them).

Along those lines, how do you relate to fundamental/economic events? Do you study them, just know of them, or trade through them? And for those trading only daily and 4hr strategies, what do you do to accelerate your learning curve?

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What Builds Confidence in Trading?

Last week in a free private webinar for my course members, I asked a key question about what builds confidence in trading.

Trading is without a doubt, an endeavor you need confidence in. Having a confidence that you can do this will be a fuel when you need it, clear obstacles when you face them, and provide a focus on what is essential. Confidence will accelerate your learning curve.

On the flip side, lacking confidence can be one of the most destructive traits for a traders mindset. When losses come, how will you re-bound and focus? What happens if you start your day with two, three, or four losses? Will you doubt your system, trading plan or skill set?
All eyes can see, lacking confidence is destructive, while having confidence gives us a greater chance for success. Although we know this conceptually, or intellectually, often times our actions tell a different story.

So how do we build confidence in trading? What can we do create an unshakable belief in our abilities? If we engage specific things, will they help us form a foundation to profit consistently?

The answer is yes, you can, without a doubt build confidence in yourself and your abilities. In this article, I am going to share a method to help you build confidence. Will it be enough? I don’t know, but it’s a great place to start.

Successful Endeavors

I am very proactive in protecting my mental capital and self-image. Having a strong self-image and a healthy reserve of mental capital will lead to increased performance.

With that being said, what do you think it does to remember your past successful endeavors? Do you think it builds up your confidence, or brings it down? The question is rhetorical, but I want you to begin thinking about this more deeply.

building confidence in trading 2ndskiesforex
I’ve worked with thousands of traders over the years, and one common trait among most of them, is they are all good at something. Chess, poker, math, sports, finance – you name it, they are likely good at something.

In our courses, we have well over 50 doctors, many of them surgeons. We have poker pro’s and tournament champions who are wanting to transition into trading. I have a few traders on the NYSE or for some large prop desk while others are high profile trial lawyers. Engineers, programmers, IT specialists….we have them all and the list goes on.

As a whole, most students who want to learn forex trading are intelligent, probably successful in their current field, and likely good at some skill. So how do we leverage this to build confidence?

A Method

One simple method you can use is to think about what you are already good at. Think about what you went through to get there, the obstacles you overcame, the doubts you faced, the hurdles you passed, how many times you weren’t sure you could be good at it. Yet in spite of all that, you became highly skilled at it.

Notice the confidence you feel to perform that skill or endeavor. Did you always feel that same way as you did now, particularly in the beginning? Unlikely. But you got there, and now have a competent level of skill in it, whether it be a skill, sport, job, martial art, musical instrument, work or endeavor. This current experience and skill can (and should) be used for our trading process.

Hence, take some time to think about deeply what skills or traits you can do well. Think about it till it brings up a feeling of confidence to engage that activity and do it well. Remember this feeling and apply this towards trading.

Climbing Mountains

It is important to remember, all of you at some point in your lives have broken through obstacles, difficulties, and gone past your doubts. Maybe these were small, or maybe they were mountains, but every one of them we’ve climbed reminds us of how far we’ve come, and what we’ve overcome along the way.

As I said, before, ‘Overcoming is the Currency of Success.‘

overcoming is the currency of success 2ndskiesforex
Remembering this, and having contact with our past successful experiences will help you build confidence in yourself. This is another method for protecting your mental capital and keeping a strong self-image.

Hence, take some time to remember all the obstacles you’ve overcome along the way. This should give you a feeling that you can overcome your inner obstacles to trading successfully.

In Summary

Having confidence and a strong self-image are two of the most essential weapons for a successful trading mindset. Most, if not all of you, have had to overcome something in your life. And equally most are already good at some skill, sport or work.

Think about your developed skill set in any particular field, and what you can do with those skills. Think about what obstacles you had to overcome throughout your life. Notice how it makes you feel about yourself when you think of what you can do, and what you’ve grown past along the way.

Sometimes, we need to just remember our strengths, inner resources, and wisdom we’ve acquired along the way. Sometimes just noticing those things will remind us of our capacity, and our potential. This is just one method you can use to build up confidence in trading.

bruce lee forex trading 2ndskiesforex
It should be noted, there are other crucial methods you can be engaging daily to build an unbreakable bedrock of confidence. Take some time to ask yourself what builds confidence in trading for you.

Please make sure to share your ideas on this, how it helps, and any comments you have regarding this article.

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A Successful Trading Mindset – Setting Goals

In a great study by Thomas Corley on the daily habits of successful wealthy business people vs. the poor, some fascinating statistics were unearthed. Here are several below:

  • 76% of wealthy people exercise aerobically at least 4 days a week vs. 23% for the poor
  • Those same wealthy people eat over 30% less junk food
  • 65% watch less than 1hr of TV a day, and almost never watch reality TV
  • 88% of those same wealthy people read 30 minutes or more each day  vs 2% of the poor
  • and lastly, 67% of those successful business people write down their goals vs. 11%

It should be noted almost 70% of these now successful people started off in poverty.

One statistic this study really dug into was that of setting goals, and the discrepancy was overwhelming across the board. Here they are below:

  1. 67% of successful business people write down their goals vs. 17% of the unsuccessful
  2. 80% focus on accomplishing a specific goal vs. 12% for those struggling
  3. 86% believe in continual self-improvement and education vs 5%
  4. 84% believe good habits create opportunities vs. 4% for the poor people
  5. 76% believe bad habits have a negative impact vs. 9%

Successful Trading Mindset - Setting Goals 1

Hence, highly successful people write down their goals, focus intensely on accomplishing a specific goal, continually train and work on themselves, are super confident good habits create more opportunities, and avoid negative habits and limiting beliefs.

Now ask yourself, have you written down your trading goals, or are they just in your head?

When you are training, are you working on a specific skill, and doing deliberate practice?

Or are you just going through the motions waiting till the market opens?

Do you just think between your two ears you should write in your trading journal, or are you writing in it each day you trade and train?

Where are you at in this spectrum of habits and in setting goals?

It’s one thing to say, ‘I want to make 10% a month‘, or ‘I want to be a professional trader’.

But do you follow it up with action?

Do you set goals, build a specific plan of action to accomplish that goal, and then put hours into that plan of action every day?

If so, then you have a key piece in place towards trading successfully.

But if not, spend about 1 minute asking yourself why you haven’t set any trading goals, then the next 30 minutes discovering what those goals are, and what you need to do to accomplish them. From there, you have to take action.

In reality, the largest portion behind your success is the choice to think successfully. What you think and do has the greatest impact on your success or failure. I meet a ton of people who were highly successful (at something) before they came to trading. Yet they get stumped on how to trade successfully and become frustrated.

That frustration is a type of amnesia. It’s forgetting you weren’t always successful at what you are now. It took time, likely hundreds of hours, you made an ocean of mistakes, worked hard when it wasn’t convenient, and kept going when problems hit you for a loop.
How Trading really Works out
Where is that wisdom now? Where is that experience now when you are experiencing your frustration? Rely upon that, and use it to keep moving forward. Tune your mind to what you want to accomplish, understand what it takes to achieve that, continually work on building a successful mindset, and then get to work.

Nothing about this will be easy, but nothing great ever is.