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What You’ll Learn From Becoming A Successful Trader

becoming a successful trader

“What does being a trader mean to me… it means the key to financial and personal freedom.” – From a former bank trader.

I actually find this quote above to be a dime a dozen statement. Anyone can parse out such a blatantly obvious and banal sentiment.

If offers no unique insights into trading, let alone an original perspective.

How about the ‘Get out of the 9-5 grind‘ – Cut and Paste. ‘Be your own boss‘ – Carbon Copy.

Any old (or young) bloke can write such waste.

Have I read/seen/heard any good ones? A few interesting reflections for sure. You can tell they’ve dug past the outermost crust, reached through the thick mantle & arrived at a rich core.

Coming from a buddhist, trader and 20 year student of neuroscience, here are 5 things I’ve learned from my 15 years of the markets.

#1: Money is Liquid

Most people work for a company (i.e. someone else). If that is you, you most likely get paid a fixed amount on fixed dates (neither are your choosing).

And it’s X amount of dollars on such fixed dates (barring an infrequent bonus). This causes us to relate to money in a very fixed & solid way.

Trading changes that completely. When each pip for or against you is $1000, your wealth is changing in real time constantly.

This forces you to see money in a completely different way.

Relating to money in a very fixed way doesn’t produce creativity, nor develop new neural networks in the brain. It doesn’t lead to challenging your ideas & looking at things from a different perspective.

It leads you to believe you are stuck and dis-empowered. Innovation and creativity do not arise in a fixed mindset, or a brain that isn’t growing.

When people start to trade for the first time and see how their money can grow, it changes something in your brain.

The limits are lifted and you start to see new possibilities (that money is liquid). This is a healthy thing for the growth and development of your brain and trading mindset.

#2: Novelty Helps the Brain Grow

Ever work in a warehouse? I did in high school.

It sucked. Great pay, but I would have preferred the Iron Maiden. Repeating the same motion every day 500x a day took me about…ohhh…2.5 days for me to say ‘F-THIS’.

Lamentably, most jobs keep you doing relatively the same things. Novelty in the workplace is not a commonality, but a rare commodity.

Trading changes that completely. No trading day is ever the same. The markets are in constant flux.

When I started in 2001, the market could move 100 pips on the first tick from an NFP announcement. Today…maybe 20-50 pips.

The GBPJPY (used to be called ‘the beast’) would move 250-450 pips a day on average.  Now it boasts a whopping 109 pips on the daily ATR.

Markets present you with an ever flowing river of unpredictability and novelty.

How does this help your dome?

Novelty stimulates the brain. It helps excite dopamine production which is helpful for building new memories, learning, and creating new neural pathways.

Novelty also increases the activity in the pre-frontal cortex (PFC), which helps you build greater insight, empathy, and self-control.

The novelty of the markets is simply good for your brain.

#3: Markets Are A Giant Mirror To Your Mind

Perhaps you’ve realized it, but the markets are a place for self-discovery. Regardless of the market you trade or where you are trading from, it is always one giant mirror to your mind and trading mindset.

Every action and thought you have affects your performance.

“The markets completely reflect back your mind to you, making it painfully obvious what your psychological strengths and weaknesses are.”

If you are disciplined in trading or not in the face of uncertainty, the markets will let you know.

It is completely unbiased and untainted how it reflects these things back to you.

The market does not judge you, and will mirror something back whether you are George Soros, a middle aged bank trader, or a young 20-something just starting out.

Any flaws you have will be brought to the surface and available to see whether you want to or not.

What person do you know that can so accurately reflect such things back to you without judgment, bias or an agenda?

What entity do you know out there, that every moment you engage it is constantly reminding you to observe your own mental, emotional and physical condition?

The markets are a giant mirror for your mind and mindset, and a fantastic place for self-discovery and growth.

#4: Understanding Risk vs. Reward

Recently my partner and I started looking at new homes. We met with a Sotheby’s agent as they had a few good listings in our area.

After talking with them about the numbers, my trading brain started to go off.

The law here requires non-permanent residents to put a minimum of 35% down on the house. Assuming a house value of $1 million, that comes out to $350K.

As soon as I started to hear the numbers, my trading brain went to work. Last year the market here gained about 4.5%.

Assuming a similar return, I’m putting down $350K to gain $45K on the overall property value (4.5% on $1M).

Now is that the most efficient use of my capital? I could put $350K into the markets and confidently get a 20% return. That would = a $70K return vs. my $45K on the house.

Considering I am not far away from my permanent residence status, when evaluating the risk vs. reward of the situation, it is actually more expensive and less profitable for me to put this money into a down payment.

Most people would never go through this line of thinking. Most wouldn’t do the math, or particularly evaluate situations from a risk vs. reward perspective.

This is a highly valuable skill in life beyond the numbers.

We will always encounter situations in life that will require us to understand, evaluate and assess the risk vs. the reward.

Simply put – the things we learn in trading are valuable for us in life.

#5: Learning How & When to Take Risks

Speaking of risk, one thing you’ll get intimately familiar and comfortable with via trading is taking risks.

Whether we want to acknowledge it or not, in life you have to take risks. It is not only good for your brain, but is a governing factor behind what you achieve.

Those who don’t take risks never get ahead. They live the same run of the mill life & never leave their comfort zone.

Yet leaving our comfort zone is often where the most growth is. It is where most successful traders and people spend their time.

By and large,

“successful traders & people in all fields have taken risks, oftentimes large ones for big payoffs that last them a lifetime.”

That is one thing you’ll get an instinctual feel for when trading, because it’s a part of your every day work and passion.

Learning how and when to take risks is a highly valuable skill which can pay dividends well beyond the charts.

It can literally define the direction you take and the trend of your life. Hence what you learn from trading can enrich your mind and life in ways most jobs never will.

Did you find this lesson useful? Please make sure to like, share and tweet it below.

Also I’d love to hear what ‘aha‘ moments you had by sharing your comments and thoughts below.

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Don’t Make This Mistake In Trading

mistakes in trading

You followed your trading plan. You got in at a great trade location. You were calm as a hindu cow throughout and executed perfectly from A-Z.

But…that noise your platform makes when you lose money…you heard it, and your account is now smaller.

‘I did everything right, it looked great, and yet I lost money. What went wrong?‘

Nothing. You did nothing wrong…up until that point right there.

Why?

Because you made the one failure almost every losing trader makes. You missed one essential element that will drastically affect your trading performance.

Reinforce what you did correctly.

‘What does that mean?’

It means regardless of how much you won or lost on a trade, you reinforce what you executed correctly.

‘What if I only did one thing out of ten correctly?’

Doesn’t matter – reinforce it.

‘How does this help me when I lost money? I want that money back.’

Ya, no shit! So does everyone else in that situation.

‘Ok tell me – why do I need to reinforce what I did correctly when I lost money?’

Because beating yourself up damages your self-image. Because not reinforcing habits doesn’t help to reproduce them.

By thinking about and reinforcing what we did correctly, we increase the likelihood we’ll repeat them.

“We cannot control the movement of the market, but we can control our thinking process.”

And what we think about from the beginning to end of our trading day matters. It heavily determines our performance.

The more we control what we think about, the less mental errors we’ll have while trading. And that leads to greater performance over time.

It also leads to a stronger self-image that believes it is ‘like you‘ to trade successfully.

This tip is just one slide in twenty-six from just one video of the Advanced Traders Mindset Course.

Want to change the way you think, trade and perform? Enroll now and join hundreds of members in ATM Course.

NOTE: Course registration closes in 3 days!

I know, sorry to give you such late notice, but I have been talking about it for 5 weeks now, and it’s been plastered all over my site.

Remember, one of the key dividing lines between success and failure in trading lies in your mindset. Make yours a successful one.

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Discipline = Freedom + Success for Traders

I wanted to share a unique lesson this week, one that is different from any of my other ones.
Recently I was at a meditation retreat with my teacher. As many of you know, I have been practicing meditation and buddhism every day for 15+ years now. For 14 of those 15 years, I’ve been working with one teacher.
Who I was 15 years ago is not even recognizable to the person I am today, and my teacher is the biggest reason behind that.
She guides, challenges and helps me grow in all aspects of my life. Her in-exhaustable wisdom, penetrating insight and poignant clarity continue to amaze me every time I am with her.
It is a relationship I am ever grateful for.
Back to the Retreat
During a private moment with the senior members, she was taking questions from the group, when one of the students asked a question about discipline.
meditation retreat 2ndskiesforex
I wanted to share her response because it speaks to the heart of what discipline, training and taking things to the next level is really about (in trading, and life).
I’ve changed a few words to make it more tailored towards trading, but the message is the same, and all the credit remains with her for this message below.
Without further adieu, here is her thoughts on discipline & training.
Discipline Is Not the Anti-thesis of Freedom
“I’ve often seen in people this idea, or framework of thinking, that force, rigidity, and intensity in one’s work is the antithesis of freedom & creativity, and it’s absolutely not.
One pattern that revolves around discipline is people floating around from one system to another, and another, and another, but what people end up doing is spinning their wheels and never going deep.
They’ll let go of one system because they think it is ‘under-performing‘ for that week or month, all according to our wants and needs to succeed ‘now’.
What we are really doing is playing out our conditioned scripts and never breaking through.
Breaking the Cycle
The only way to break out of this cycle is to harness the power of habit in a positive direction. That requires discipline, it requires a focused training.
There will be a level of force and unhappiness that comes with this sandwich. But for anything that requires us to succeed, we have to go deep, and that takes discipline & training. We have to develop this habit and power.
bruce lee discipline 2ndskiesforex
Michael Jordan
An Olympic athlete doesn’t always feel like getting up that day and training for hours on end each day.
I’m pretty sure Michael Jordan didn’t always feel like practicing or training hard. But he did it anyway, and that communicated something to his self-image.
To transcend our current limits, we have to go beyond what we feel like. We have to transform this feeling of constantly wanting to do what we feel like, and then making excuses in trading and why we aren’t performing the way we want to.
There is so much energy out there today about doing what you feel like, doing whatever you want.
michael jordan discipline 2ndskiesforex
Taking Things to the Next Level
But if the goal is to take your skills, awareness and mind to the next level…if your goal is to be something, do something, perform a skill at a higher level than you are now, then you need to start working on those hidden levels, in those areas of your sub-conscious and unconscious mind where we have some heavy conditioning in place.
So if you want to go beyond the level of success, performance and the mindset you have now, that takes training, that takes discipline, that takes force, even when we don’t feel like doing it.
Discipline = Freedom
I too have moments like that, where I ‘don’t feel like it‘. But what I remember in those moments is that discipline will give me freedom.
If I do the practice and train whether I feel like it or not, this very action repeated many times, will lead to an accumulation of skills, wisdom and knowledge that will allow me to transcend my current limits.
Part of what is happening for me in those moments is my nervous system is reaching its limit to participate, act and execute in a particular way.
In that state of duress, in that level of concentration, what is being challenged is our limits, and it is only there that we can learn to expand that.
We can’t expand our limits while ‘doing what we want‘, or ‘being a lazy trader‘, or spending < an hour in front of the charts and then being on vacation the rest of the time.
That is an illusion, and no-high level professional works like that in any field.
Discipline = Power
There is a huge power to doing things we don’t feel like, and that power is called discipline.
Perhaps though discipline isn’t the best word, because we can easily associate it with some form or punitive measure or experience. But the reality is, discipline is our potency.
If we cannot have it, if we cannot hit the mat every day, or keep playing the guitar when Jimi Hendrix isn’t coming out of our strings, if we don’t push up against those limits, against that inertia, then we won’t grow.
We’ll remain shallow, and we’ll just end up repeating the same mistakes over and over and over again. If that is your experience, then you know the variables and recipe behind said experience.
Habitual Momentum
There is so much momentum to repeating our habits and cultural scripts. They have incredible momentum and energy behind them.
To establish another direction, to challenge and go against it, we will feel it, and that will not always be comfortable. Yet in those moments, there is a huge power available to us, to make discipline our habit.
Those Who Really Develop
If we look at the defining moment of someone who matures, develops and takes things to the next level vs. someone who doesn’t, it’s their capacity to stretch beyond what they don’t feel like doing.
It’s their ability to hold a discipline.
If discipline isn’t our strongest point, that’s ok, we can start with where we are. We can go to that limit, stretch the envelope a little bit each time in a controlled growth way. Discipline is a super power we have.
If you can tolerate insecurity, tolerate discomfort, and go against what you feel like doing, hold that discipline and train – there is no limit to how much you can grow, develop and succeed.
That is a great power we have, and for those who take this on, it is only a matter of time before you climb that mountain and have a successful trading mindset.
climbing mountain 2ndskiesforex
Netflix + Video Games
I certainly have moments where I exert beyond what I think is possible, and many times after that I need to rest my body and mind.
It’s usually in these times when we start to have those fantasies of laying on a beach for days on end, or just lying on the couch watching movies. I’ve done that.
Recently after some graduate school exams, someone told me after their finally done, that they just watch netflix and play video games for 3 days to decompress.
I heard that and thought ‘oh wow, that sounds like heaven‘. So I tried that, literally watching Breaking Bad from beginning to end, playing video games for long hours.
breaking bad 2ndskiesforex
But after doing that, although there was some rest I caught up on, I can say the overall experience wasn’t truly satisfying. It was helpful to get that rest and down time in, and we need that in certain moments.
But the rest of it wasn’t really satisfying…not in the same way where I can experience the fruits of my discipline, work and what I’ve created.
Shifting the Fantasy
So I’ve shifted to a place now where when I experience those fantasies, that when they come up and I want a ‘vacation of freedom’, a ‘vacation from discipline’…I’ve learned that too much freedom can be just as much a poison as too much discipline, so that’s not the solution.
Hence I remind myself that it is an illusion, and that I don’t want the fruit of that. What I really want is the fruit of taking things to the next level.
Even if it’s painful, even if I don’t like it, I’ve found the fantasy to be limiting. I’ve found that discipline in training yields me a feeling of being regret-less about my time.
I don’t have those regrets of ‘oh, I wish I had done that,’ because I am doing ‘that’, and there is something really gratifying in that experience and knowing.
I am definitely not a master of it. It’s hard, and I have times just like you that I wrestle with it. But I can say that I love what discipline gives me, especially in my meditation and mindfulness practice.
Highly Successful People
When I talk to people of high caliber, people who have a unique perspective and are highly successful, this is totally the difference.
This isn’t someone just doing what they want to do, or feeling what they like all the time.
They definitely aren’t following the fantasy being marketed by people out there that you can just work one hour a day and have all the money and success you want.
They aren’t staying in the little house of their mind, of what their mind wants, or what feels comfortable.
They’ve put themselves in environments that challenge them, that demand from them, and stayed in those environments through discomfort, foraging their way through.
And for those that have had this experience, you’ll see they are of a high caliber and performing at a high level.
The fruits of their work, discipline and training are obvious when you meet and talk with them.
highly successful people 2ndskiesforex
Ultimately, I think time is really precious, and we should question what our cultures teach us about how we should spend our time, and what it is really for.”
Wow is all I have to say to that.
I hope you enjoyed this article and found it insightful, poignant and informative about trading, success and discipline.
Please do share your comments and thoughts as I’m itching to hear your feedback.
Just Released: For those wanting to build a successful trading mindset while re-wiring your brain for success, check out our Advanced Traders Mindset Course, only available till April 2nd.

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The Three Parts of Your Trading Mind

In this weeks lesson for the Advanced Traders Mindset Course, we went through a very important topic for building a successful mindset. We covered the three parts of your trading mind, addressing some of the critical topics below;
1) how these three parts relate towards your trading performance
2) how you can tell if these three are in balance
3) why the training you are doing isn’t going to work
4) what part of your mind creates each trading mistake you make
5) how to fix analysis paralysis
and more…
three parts of your mind 2ndskiesforex
Lamentably, most traders failing to achieve consistency or profitability are not working on all three parts of the mind. Most likely they are working on one part.
This creates an imbalance, and thus when you need to pull the trigger – you hesitate, get nervous, fearful, worry, experience doubt, have analysis paralysis, or any combination of those, and thus never hit the button.
Most likely, you end up watching the trade activate as you planned and hit your profit target with relative ease. The common response from here is frustration, regret, anger (towards oneself/market), and probably a host of other things.
Sound familiar?
Thinking and results mindset - disappointment
The reason why you have this experience repeatedly, is because you are training only one part of your mind.
This is done mostly via watching the market, doing ‘analysis‘, reading trading books, watching trading videos, basically stocking everything up to the ‘thinking-analytical’ part of your mind.
What you are missing is the other two parts of your mind which a) likely need training, and b) are probably imbalanced since you put 90% of your effort into only one part.
The result is…well you know what the result is…it’s the current state of your account, it’s the inconsistency, the repeating of the same mistakes over and over again, the inability to maintain any profits, discipline, or control your risk.
My teacher uses the phrase, ‘putting a big foot into a little shoe‘.
If you are putting something quite large (the mind/your trading mindset) & trying to stuff it into a little shoe (thinking/analytical part of your mind), the result will not work out as planned.
If you’ve experienced analysis paralysis, are still repeating the same mistakes, can profit for a few weeks, but then blow it all up in a few days, you are not alone.
The good thing is you can change this. You can re-wire your brain for trading success. You can learn to train all three parts of your mind.
fire bulb
We covered this in a 1+ hour video in our Traders Mindset Course. Registration closes April 2nd (2015) and we’ve already filled over 150 seats in the last few days.
To learn more about the Adv. Traders Mindset Course and how you can get past your biggest challenges in trading, click here.

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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.

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The 4 Components of A Trading Process

4 components of a trading process 2ndskiesforex
I recently read a post by Brett Steenbarger called ‘The Four Pillars of Trading Process‘. In this article he outlines and details what is a trading process, isolating several components of any trading process. They are;

1) Preparing
2) Performing
3) Reviewing
4) Revamping

Before I get into the spice and flavor of these four points, I’d like to state this commentary on Mr. Steenbarger’s post is both praise and critique. I appreciate his work on trading psychology and would suggest checking out his blog.

In this post, I found useful components to his description of the trading process. However, there are a few ingredients I would amplify/expand on, meaning I felt they could have been cooked a little more.

Let’s get into the four components and how he describes them. I will go over one at a time, discussing what I found valuable, along with what I’d change/adjust/or add to.

I will also give suggestions how you could get a greater understanding of the trading process and how to leverage this to increase your trading skill set.

#1 Preparing

Mr. Steenbarger defines this as the following;

“Preparing – What you do to identify and exploit opportunity in markets, including observation, research, idea testing, trade structuring, portfolio construction, and trade planning.”

To me, this first one falls short, because it only covers what you do once you sit down in front of your trading station.

Preparation (in my book) begins with the mental game, and that has to start before you actually put your butt in your chair.

light bulb idea preparation in forex trading 2ndskiesforex

You’ll see this in professional athletes who are getting themselves mentally ready before they even get to the stadium.

Aaron Rogers (quarterback for the Green Bay Packers, 1x Super Bowl Champion & holder of several Quarterback records) actually spends time the night before thinking about the game and what he is going to do.

Trading has to be approached in a similar way, and the successful traders I communicate with regularly employ the same tack.

Hence, we have to include mental preparation in this part of the trading process.

Even though Brett (Mr. Steenbarger’s first name) does a good job outlining what you do when you are in front of your trading station, I think this definition of ‘preparation‘ needs to be amplified.

#2 Performing

Here Mr. S. defines this as follows;

“Performing – What you do to initiate and manage positions in the market, including sizing, risk management, entry and exit execution, and adjusting to the ongoing stream of news, data releases, and market movements.”

Here I think Brett covers (by and large) all the ‘mechanical’ actions you as a trader will execute and engage on a daily basis. I do feel there is room in here to discuss ‘mental management‘ which is a large component of ‘performing‘ during your trading day.

However, I will cover this in the near future.

#3 Reviewing

Mr. S. here writes;

“Reviewing – What you do to examine individual trades and overall trading to learn from successes and mistakes and to reexamine ideas about markets.”

Not much to say here – he pretty much nails it, other than reviewing one’s mental performance & trading journal.

improving trading results 2ndskiesforex
Note: For a great article on how to review your trades, read Reviewing Trades: Two Crucial Tips)

#4 Revamping

Brett here states;

“Revamping – What you do to translate your reviews into concrete goals and actions that make you more prepared and aid your future performance.”

Here I also feel he gets it right, although I think we can bring this into #3 above and make them one whole component of the trading process.

Now he also states in this article how the main issue for traders is not letting their emotions affect their trading and discipline. He feels the big issue is how they neglect the last two elements and spend most of their time working on #’s 1 and 2. Does this ring a bell?

While I certainly agree traders are less likely to review their trades, performance, process, etc., I find most revamping their methods all too frequently without ever digging deep into any one process, system or skill set.

On top of this, I find without a doubt many traders let their emotions affect their trading and discipline. I hear about it all the time, and even see it in their trading journals.

My experience is both are a major issues. Any trader not controlling their thought processes or emotions is the least likely to succeed. Hence I see it as a both-and scenario, not an either-or.

the trading process by 2ndskiesforex

In Summary

I think Mr. Steenbarger does a good job of breaking down specific components of the trading process, and giving them a more detailed look.

I personally feel there needs to be more emphasis on preparation & reviewing, along with managing one’s mindset and emotions in real time.

I do see other components besides these four, which I will cover in the near future, but overall, he does a good job of bringing a greater discussion on the subject.

Those traders without a well developed trading process beyond the vanilla a) take a trading course, b) learn a trading system, and c) start trading in the markets, will find themselves struggling to trade consistently, missing key components, and not building their skill set.

Unfortunately this is the path most traders take, and it simply won’t get you from here to consistent profits. Hence why this is an important article and discussion.

With that being said, what parts do you see as critical to the trading process? Do you agree with my sentiments here?

Please make sure to share your thoughts, comments and feedback, particularly why and what you see the same/or differently.

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Excuses in Trading: What They Do & How to Overcome Them

clair and chloe gruenke 2ndskiesforex
Meet Claire and Chloe Gruenke. They are 13 year old twins. Both of them compete in track for their junior high school in Illinois.
A few months ago, both were in a track meet when Chloe felt something ‘pop’ in her leg and fell down. Trying to complete the race, Chloe tried to get up, but she couldn’t run, let alone walk.
At this time her sister Claire, realizing Chloe was physically unable to complete the race on her own, did something extraordinary.
Instead of calling for help, she put Chloe on her back and kept on running for the finish line. There was no chance either of them was going to come in any place but dead last. Yet Claire ran with her sister on her back.
Right before crossing the finish line, Claire gently let her sister down and told her to cross the line first. Chloe saw the bigger picture, and they crossed at the same time.
This is an amazing example of losing the race, but winning at life. It is also reflective of something which plagues developing traders – dealing with excuses when facing obstacles.
Excuses & Your Trading Mindset
When it comes to trading, what is the most damaging part of the excuses you make? Is it the fact you missed an opportunity pull the trigger on a winning trade? No. Is it that you didn’t fill out your training journal and learned from your trading mistakes? No.
The most damaging part about making excuses when it comes to forex trading, is how they affect your self-image. Every time you make an excuse, and then act upon said excuse, you communicate something which dis-empowers you.
excuses in forex trading
Each excuse you give and act upon sends a message to your self-image of how weak it is, how unable you are to accomplish something, and ultimately where your level of ability is at.
This is incredibly damaging because our self-image is one of the greatest determinants for our performance and level of trading success. With each an every excuse we make, we not only stunt the growth of our self-image, but concurrently shrink it.
Excuses Affecting Performance
We all have the goal to become a successful profitable trader. When we parse out an excuse as the reason why we didn’t do something, we lower our self-confidence, particularly in our ability to follow through. When we don’t follow through (even though we recognize our ability & potential), we experience frustration which affects our performance negatively.
Products Of…
In most cases, excuses are a product of two things;
1) Lack of Proper Motivation
2) Unspecified Goals
If you aren’t properly motivated to trade profitably, or do not know the underlying reasons for your motivations, your unconscious mind & limiting beliefs will subvert your efforts to do the hard things when it comes time.
This lack of completing what you set out to do can often be a reflection of being unmotivated. It is only when your motivation becomes larger than the energy of your excuses, is the moment you start to see forward progress in your efforts and training to accelerate your learning curve.
Also, having unspecified trading goals leaves you with no clear endgame, and thus motivational underpinning to trade successfully.
Easy to Produce
It will always be easier to produce excuses any time we fail to do something or reach our goal. We will always have moments when we are tired, do not feel 100%, lack inspiration, had a bad day trading, don’t have the money, the time, the genes, the experience, and the list goes on…
All of the above can be manufactured in a second and take no effort at all.
Before 6am & -40 degrees F
I cannot say I truly like getting up just before 6am every day. Sometimes it feels great, and sometimes I’m tired as all hell. In those latter moments, it is hard to get up, and quite easy to stay in bed.
transforming excuses into strengths 2ndskiesforex
Luckily, I’ve had various ‘trainings‘ since I was young (soccer, martial arts, yoga, meditation, forex trading) which conditioned me to ‘just do it‘. Getting up when it was -40F at the age of 11 during a Chicago winter wasn’t fun by any means. But working towards a goal and accomplishing something for my day was 99% of the time far better then doing nothing.
It’s true – getting up that one day wasn’t going to make me a professional trader, martial artist, or soccer player. But each step was both building my skills, while increasing my self-image. Do this enough times and eventually you feel like you can overcome almost any obstacle.
Common Amongst Successful Traders & People
One thing you will notice amongst highly successful traders and people, is when they come up against an excuse, they look for ways to get past them and complete their task. Their long term vision is far more important than their short term discomfort.
They are solution focused, thus constantly turning their minds towards finding an answer. This solution based focus, while being focused on the process helps to improve brain performance and wire your brain for success.
Successful traders and people do not leave much space for excuses to enter. Even when they do surface, they are usually met with discipline, focus and a forward moving momentum excuses usually fold under.
Overcoming Is…
Remember, overcoming is the currency of success. Thus it is very important you are solution focused when facing your challenges, instead of allowing your challenges to transform into excuses.
In 95+% of all situations, you are in control of ‘you’. Hence the underlying reason you haven’t done what was needed, was because of something YOU chose to do (or not to do).
Once you realize how much you are in control, there are fundamentally no more excuses to give as you determine your reality more than any other agent.
Going back to Chloe & Claire, Claire was less worried about winning the race, and more focused on finding a solution.
She communicated to everyone on that track, there are always ways to finish the race. She wouldn’t let any excuse into the situation. She showed us all something great about humanity, of what we could be if we let go of excuses, and directed our minds towards solutions.
Unable to run, Chloe still finished the race, and Claire wouldn’t let it happen otherwise. She had the mentality of ‘No-Obstacle‘, which is one of the most powerful mentalities you can have in trading and life.
Every time you face an obstacle or excuse, but overcome it – you increase your self-confidence and self-image. This is one of the most effective ways to build a successful trading mindset.
In Closing
Excuses are some of the most damaging things to your mindset and trading success. They reduce your self-image, which must be strong to trade successfully.
By learning to see what excuses are, and discover how much we can actually control them, we give ourselves the potential to transform obstacles into growth, and excuses into determination.
In reality, although there are great mountains like Mt. Everest & K2, the greatest mountain we will ever climb is our own mind, and our own challenges.
no excuses in trading 2ndskiesforex
For those who can and do scale such mountains, you will find yourself standing atop all those obstacles, limitations, and challenges, which can bring a confidence to last you a lifetime. It is in that moment that you will see the great expanse, and what’s available to you.

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Korean Archery And The Training Process

In the summer of 1988, a new trend was about to begin. During the Olympic games of this year, (ironically being hosted in Seoul, Korea), team archery was being introduced. Since this inclusion of team archery into the Olympics, the Korean women’s team have won all 6 titles, with the men’s team winning 4 out of 6.
Before the 2012 Olympics in London, of the the top UK shooters, Larry Godfrey said the following:
“Myself and Simon Terry are the only British archers to have ever shot over 1350 points in a round. But in Korea, there are at least 50 archers who could score  over 1350 at the moment.”
koren archery and the training process 2ndskiesforex
Needless to say, Korean’s are some of the most dominant archers in the world, and one of their secrets to success lies in their training. And never mind the fact the archer featured above is virtually blind!
Moving on, there are many aspects of their training which deserve study, but we will focus on one component here.
In many Korean archery schools, you may actually practice the basic technique of shooting a bow, for 3 months before you actually fire a live round.
Let me repeat that – THREE MONTHS!
What this hyper-focus on technique does, is insure you have properly wired into your brain the foundation for correctly shooting the bow and arrow. It also forces you to focus more on process and technique, thus keeping the right perspective.
This is one of the most common elements successful traders have, as well as high performers in all fields (the focus on process/technique – not results).
Imagine what your trading skill set would be like now, if you spent the first three to six months focusing entirely on technique and process. How much better would your trading be for it?
Have you focused 90% of your energies on results, or technique? On process or profits? Would it be worth taking a little longer in your training process to build a rock solid foundation?
If you are focused on getting rich quick, then you’ll skip this process, and ironically, be least likely to achieve your goal. But if you want to learn how to trade professionally, you’ll take the time, train properly, and put in the effort.

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How to Keep The Right Perspective When Trading

Without a doubt, the learning process to successful trading is not a short one. It is one that takes time, akin to virtually all other skill based endeavors. Be it sports, playing a musical instruments, or martial arts.

Although we want to become black belt traders, or virtuoso readers of price action in a jiffy, in 99% of the cases, your time line from here to success will likely not be as quick as you’d prefer.
Because of the extended time on our journey from A to B, it is common as bikes in Amsterdam for us to lose perspective, and go off the rails.
Putting Things In Perspective
Take a look at the graph below. What you are seeing is a snapshot of an equity curve from one of the strategies in my price action course.
snapshot equity curve 1
Upon first glance, it looks incredibly unimpressive…that it loses money. And you would be correct in this assumption…for this period of time.
Now take a look at the second image below, which is the entire equity curve over several years.
price action strategy equity curve 2ndskiesforex complete
What you are now seeing is something totally different.
When you look at its entirety, you are seeing is a price action strategy that made 108% return! This is across only one ONE PAIR, and only ONE TIME FRAME.
Some highlights of the performance are below:
+108.9% profit
Profit Factor of 2.3
Expected Payoff of 112.28
Maximal Drawdown of 14.27%
% Profitable Trades 68.04%
Greatest Win 36% Larger Than Greatest Loss
Max Consecutive Profit Almost 200% Greater than Max Consecutive Loss

Without a doubt, this is a strategy that makes money, consistently, preserves capital, with a balanced risk to reward ratio.

Below is the table from the performance test, showing you the same performance.
total performance profitable strategy 2ndskiesforex price action

Most Un-Successful Traders Make This Mistake
For those who are not trading profitably, most likely when you are in a draw down, you don’t give the strategy enough time to work itself out. You see the equity curve falling, and think something has to be changed.

In reality, there could be nothing wrong with the strategy. Maybe this particular strategy won’t perform well in that market, yet this price action strategy makes money over time.

Now imagine if you changed strategies at the end of the first graph. You would have missed out on over 85% of the entire profit that strategy made. You would have lost several years of consistently profitable trading. That alone would have put you in top 5% of all traders. Food 4 thought.

Building A Healthy Perspective
Generally developing traders are more hyper-sensitive to every single trade, each win and loss. But look at this from a different perspective:

Imagine being a new archer having this same approach – that you gauge your confidence based on each shot.

That map would be all over the place, and drive a person batty as to how they are doing, because naturally one will be an inconsistent shooter in the beginning.

Instead, look to a great basketball player, and tell me if their confidence wanes from missing one free throw. They don’t make this mistake. They keep the right perspective and mindset by focusing on the process, not result. They keep the right perspective.

Constantly Changing
Changing strategies every month or so will take you in circles (like the dog that chases its tail).

dog chasing its tail
Quarterbacks don’t change throwing motions every month, nor do musicians change instruments every time things go bad. Why would you think the path to successful trading would be any different?
So avoid changing your trading plan and strategy every month. Stick to the one you got for at least 90 days, once you’ve refined it. Commit to learning/trading it inside and out.
By doing this, you are (at the very least) building a skill set towards successful trading. Even if the strategy does not work out, you are developing one of the most important qualities in trading – discipline.
And with discipline comes confidence, which is something most un-successful traders lack. Remember, the draw down of the first chart was the prelude to a 108% return, (doubling your account in a few years).
Ask yourself if you have done this (changed strategies after a small losing period). Ask yourself if you’ve focused on result more than process. Then see how you can change this to keep the right perspective when trading.

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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?