Trading Mindset & Risk Management – Page 5

Forex Price Action Trades +1640 Pips

Hello Traders,

Often times I share my own personal trades that I use from my price action course strategies, but today I wanted to share some from a student who has banked over 1640+ pips in just the last two days, using our strategies. This student (we’ll call him Stan) had joined our course only a few weeks ago, and has already paid for it several times over. How Stan came to me is quite interesting and worth noting.

He took another course from someone else on price action just this last January and had the following to say;
“I started a course from him in January, and I do not want to waste any more time on his course. I like your forex videos, but moreso wanted to learn from your unique perspective on trading and life, so I’m going to join your course.”
He joined on March 10th of this year.
For the next two weeks, he did nothing but study and ask questions, really digging himself into the material and constantly getting feedback. He without a doubt has the passion and drive, and is using these to fuel his growth without a doubt.
After a few weeks of study, questions, practice and feedback, he emailed me on April 4th with the following;
“I have been watching the videos on the price action course, and today I nailed 3/3 trades which I’m still in at the moment. I just want to thank you for being such a good teacher and gifted instructor. Thank you for passing on the knowledge.”
Making a good chunk of money to have the time and freedom to do what you want is one thing – but having an impact on another person’s life is a completely different thing. This is what I strive for, as making money is not difficult, but being able to impact a person’s life like this student – is as rewarding as it gets.
Stan made these trades the day before NFP, and was up over +1060 pips heading into the big announcement.
After a few back and forth discussions on how he should handle the positions, Stan stayed in them through NFP, and has profited even more – currently up +1640 pips on just those three positions.
Here are the trades below from the screenshots he sent me on Thursday:
CHFJPY 1hr Chart

USDJPY 1hr Chart

GBPJPY 1hr Chart

As you can see, Stan got pretty darn good entries on the positions considering the JPY volatility – but has also held his nerve as they developed, which has allowed him to make several multiples of R (reward) per trade, with some over 10:1 reward to risk plays.
As of Friday just after the NFP report came out, Stan sent me another screenshot of him holding the positions, and even adding onto it using one of our price action setups.

As you can see buy the date and time on his broker platform, Stan was still in the position heading into NFP and added more. If you include the new position he added, he’s up another 221 pips, so a total of +1861 pips in the last two days, and each trade is no less than a 7:1 reward to risk play, with one being over 10:1.
Keep in mind, Stan only joined the course a few weeks ago, and has learned tools and methods to take advantage of these huge moves in the market. The irony of it is, he was not the top performing trader in the course this week, who banked over +6300 pips this week from trading Gold and Silver!
Perhaps you have not been profiting lately in the markets, and having trouble catching these great price action setups and large moves. But seeing the above, I hope you realize how you can profit from trading the market, with the right education, study and practice.
Making money in the markets is a real thing, and its not just something that I do, but my students do as well, and continue to do. My belief has always been – if they can do it, then there is no reason why you cannot as well.
My job is to give you the strategies, training and mindset to be successful, but you must meet me on the path. I can only do so much, and my job is really to do 50% of the work for you (although it ends up being like 75%). But for those that meet me along the way, and do their part, the rewards are there, just like they were for Stan in his excellent trading above.
Hopefully, you will be next.
Kind Regards,
Chris Capre

Forex Trading, Ted Williams, & The Little Details Pt. 2

Last week I talked about the importance of looking at the details and refining one’s trading game in Forex Trading, Ted Williams, & The Little Details Pt. 1 article. All highly skilled professionals realize paying attention to the details pays dividends, and often leads to the difference between being good and great. Today is the continuation of that article, where I will be sharing how making a small trading adjustment in my trading could lead to a six-figure change in profits per year.
But before I get into one small adjustment I need to make in my personal trading, I want to discuss a few amazing examples of how Ted Williams really paid attention to the details, and how these small things separated him from the rest.

Attention to Details
Ted was known to be obsessive about his hitting skills and had made several adjustments which allowed him to understand hitting better than most of his time. Here are some of the details below;
-He traditionally used a much lighter bat than most of the heavy hitters (sluggers) back in the day. To test how sensitive he was to the lightness of the bats, he was once presented with 4 bats, 3 weighing 34 ounces, and one weighing 33.5 ounces. Most people on the planet now could not tell the difference between 34 and 33.5 ounces, a .5 oz difference, or to put this in context, a 1.4% difference in the weight of the bat (.5oz / 34 = .014, or 1.4%).
Yet Ted was able to consistently tell the difference and identify the lighter bat each time.
-Ted used to warn his teammates to avoid leaving their bats on the ground. Since the bats were made of wood, this would cause them to absorb the moisture in the dirt or grass, and thus become heavier, which would slow their swing down. How would he have known this unless he was sensitive to all the details?
-After he retired, in a Sports Illustrated article, he was able to demonstrate how swinging at a pitch, just one baseball width outside the strike zone heavily affected his batting average, and he divided the strike zone into 77 baseballs, with each baseball being = to a particular batting average for each pitch in that location.
When reading the above examples of how Ted paid attention to the details, you can see why he was such a great hitter and baseball player. All of those small little details, while they may seem insignificant on their own, led to a huge difference between him and everyone else.

Paying Attention to Details in Trading
This is exactly the same for trading. Did you know using the risk of ruin tables, if you were 35% accurate, risking 2% per trade, and always taking profits at 2x your risk, you would have an 8.37% chance of blowing up your account?
But reduce your risk to 1% per trade, and the chance of you blowing up your account is only .7%, which is improving your chances of being profitable 119x?
That is quite a huge difference, all with one small detail.
SIDE NOTE: This is also the reason why we always measure risk in % terms, not in dollars terms. Professionals don’t measure risk in terms of dollars, they do it in terms of %’s, because this is where they can use the risk of ruin and math to guide them about trading performance as dollars are relative to you.

The One Details Which = A Six Figure Difference
I was reviewing my trading journal one day in March this year, and noticed a behavior continually repeating itself. I had been making sure to mark in my journal since 2012, every time I entered at market, but also noting if I was entering a bit early in relationship to the system entry. I marked it with the code EM (‘entered at market’) / HOP (‘hit original price’).
Several weeks ago, I noticed this happening several times in the same week, so I started to go back through my entire trading journal over the last 12 mos to see how many times this happened. The answer….
78% of all trades entered at market, would have executed at the original price the system gave the entry at. This occurred a total of 242x in the last 12 months.
3.6 Pips
I decided to compile a few more stats to really get into the details and see what kind of effect this was having on my trading.
The average entry was 3.6 pips less than my system entry price.
Now 3.6 pips may not seem like a lot, but it has a significant effect on your trading. To give an example, lets say you have the following trade setup with my system giving me the stop and take profit (limit) levels using the following data below;
Long EURUSD at 1.3003 (entered 3 pips early at market)
Target = 1.3103 (100 pips)
Stop = 1.2953 (50 pips)
Total reward to risk ratio is 2:1
But lets adjust this by just 3 pips, meaning I entered at 1.3000, still had the stop at the same level (1.2953) and target (1.3003) assuming they were my targets based on the original price action system numbers.
This translates into the stop being 47 pips, and the target being 103 pips, or a 6 pip difference. This also increases the reward to risk ratio from 2:1, to 2.2:1, or a 10% difference just in the R:R ratios.
This 3 pip earlier entry, was in reality a 6 pip difference, but for me, the number was 3.6 pips, so a total of 7.2 pips of difference in performance. Assuming a 50% win ratio, 7.2 pips x 242 EM/HOP (entered at market/hit original price) would result in a 1742.4 pips difference. Based on the average lot size, this would = ~200K USD. Even if we halve this performance, it would still be ~100K USD, which is a huge difference in performance, per year!

The Difference Between…
After getting over the initial shock of how much of a difference this small detail meant in my performance, I have come to a greater understanding of how important the small details are in trading and performance (in anything). Often times, these small details can be the difference between losing and winning, between breaking even and making money, between being just good or great.
Thus, make sure to apply a fine comb to your trading account performance and journal, to mine the little details which could be separating you from losing and winning, or making a little money to a lot. You cannot underestimate the power and difference a few small pips, or one small bad habit can have on your trading.
All highly skilled professionals pay attention to these small details, as they can truly create a world of difference in performance. Jimmy Hendrix realized this when adjusting his guitars. Ted Williams also realized this when it came to baseball and batting.
The question then remains, will you take the time to find the little details which could be holding you back? How much is it worth to you, to take a few hours away from the screen time, the beach, or the bars drinking, so you can increase your performance by a huge amount? The benefits could last you a lifetime, and it’s possible this could be one of the best reward-to-risk plays you ever embark on.

Forex Strategies, Trading Mindset & Risk Management

Forex Trading, Ted Williams, & the Little Details Pt. 1

With liquidity dying down heading into the Easter holiday coming this Sunday, instead of writing my evening price action market commentary article, I wanted to write a little two part series today and tomorrow about some of the overlooked aspects of trading – the little details.
Wasn’t Ted Williams a baseball player?
Yes he was – and a great one at that.
This lesson actually centers around a great story about Ted, although not during his trading career, but well after it had ended.

Several years ago, the Ted Williams museum was collecting several items from Ted’s great career to be stored in the museum for all to appreciate. For those that don’t know much about Ted, he is considered to be one of the greatest hitters of all time, and in 1941, he hit a .406 average – which makes him the last person in over 70 years to finish a season above .400.
Williams was known to pay attention to the details of everything he did when it came to baseball, especially hitting. His famous bat during the 1941 season was suspected to have been bought initially by a collector for over $20,000. When the museum had bought the bat, they had asked Ted to come to the museum and verify if it was his bat.
He saw the bat, closed his eyes, and put his hands firmly around the handle just as he held the bat to hit a baseball.
After a short pause, he said the following;
“Yep, this is one of my bats for sure.”
One of the members at the museum had asked him how he had known it was his bat.
He responded;
“Back in the years 1940 and 1941, I had cut a groove in the handle of my bats to rest my right index finger in. I can still feel the groove in this bat here.”
You will find amongst some of the greatest concert pianists, guitarists, athletes, and anyone highly skilled in their craft, they pay attention to the details and the smallest aspects of their game. Often times, these small details and steps will lead to a large result, often times separating success from failure, breaking even to profitability, and from just good to great.
Ted Williams realized that if he could rest his index finger more naturally into the bat, it would influence his swing. That is attention to detail.
Jimmy Hendrix would adjust and oversee every guitar he ever used. Anytime he got a new guitar, he would bend the ‘tremolo‘ (whammy bar) by hand for hours at a time.
Why?
By bending it and getting it closer to the body, he could tap the strings while raising and lowering the pitch, sometimes down three steps instead of one.
That is attention to detail, and just one in the dozens he did when adjusting his guitar.

All highly skilled professionals look towards the details as a way to refine their game. And this is something you have to do in your forex trading. You have have to constantly refine your trading to greater and greater levels of precision, detail and performance. Maybe you have to adjust your equity threshold, or maybe you have to adjust your engulfing bar entry, as the vanilla one is quite inefficient.
As Michael Jordan once said;
” Take small steps. Don’t let anything trip you up in reaching your goal. All of those small steps are like little pieces of a puzzle. Eventually they come together to form a picture of greatness. But doing things step by step – I cannot see any other way of accomplishing anything.”

So take some time to think of all the little details where you could refine your trading. We all have them, regardless of our level, profitability, or account size. I’m willing to bet that if you look at the numbers, and run the data on your performance, perhaps even adjusting your risk of ruin, if you just changed one little detail, you would be completely amazed at how it would affect your performance.
This can make the difference between being profitable and losing money, between barely breaking even and consistently profiting, or the difference between being good or great. Ask yourself where you are on that spectrum, and where you’d like to be. Then get to work.
Keep in mind, I’ve never met a single profitable trader who cut shortcuts, who tried the easy way out, who wanted something for free, or was willing to steal to get there. Food for thought…but without having the mindset of abundance, how can you expect to be a professional trader who works with bigger and bigger amounts of money?
Tomorrow before the weekend, I’ll write the second part of this article, where I share one piece of data I’ve recently discovered in my personal trading, that would be the difference between my current performance, and a six-figure car…per year…without compounding.
See you then…

Forex Strategies, Trading Mindset & Risk Management

The Beggar and The Trader

There is a story about a beggar several hundred years ago from a small village. He was orphaned at a young age, and with no education and family, he had to fend for himself. He was reasonably intelligent and able, despite his challenging start. Living in a small village his whole life, since the village was abundant, he was able to beg for food and receive what he needed to survive.

He tried several times to find menial work to give him some basic subsistence, but was unable to find any.

Difficult Times
Later, some hard times fell upon the village, and many people were struggling. The beggar went around the village asking for food, but many were unable to offer him any. He went without food for some time, barely maintaining his energy living off what little he could find.
Eventually, after struggling for many months, unable to find any work, he decided to leave the village and go to another looking for food. Working his way up the mountain, unfortunately he was unable to find any food or work in the nearby villages after his repeated efforts.
Now days later, it was getting dark, he started to lose hope and realized the end may be near. He eventually found a cave which was empty to rest in, and spend his last moments. He was sad because he really felt he could do something in this world, but was unable to make things work.
Dark and barely able to see, he started to lie down on this rock, and noticed it was really warm. He thought to himself, ‘Oh wow, this rock is really warm. I am glad I was able to at least feel warmth while I rest here‘.
Shortly after closing his eyes and falling asleep – he died…
In the Very Same Cave
The next day, a group of explorers were looking for something on the mountain, and passed by the very same cave as the beggar just passed away in. As they entered the cave, they noticed a motionless person lying on a rock, and realized he had passed.
Out of respect, they decided to bury him, but when they moved his body, they noticed something that sparkled really bright. Under the man’s head where he was resting when he passed, was gold.

Akin to Beginning Traders
This story is very similar to many beginning traders who come to trade the forex market. They see the potential of what forex trading can offer, but stability, consistency and success seem just out of reach.
They often try a system for a short period of time, but then abandon it if it doesn’t make them a million dollars after a few months, let alone with the first few trades.
What many fail to realize, is that the actual gold they were looking for (a consistently profitable system), was right underneath them the entire time. They likely have been resting on something highly valuable, but because of doubt, limiting beliefs, and unrealistic expectations, are unable to see what is in front of them. When encountering obstacles, instead of working through them, they abandon their system, and look for the next best thing.
The Main Difference
I think the main difference between profitable and unsuccessful traders, is in how they approach the market. Consistently profitable traders do not analyze or value their abilities based on their last win or loss. They are trading and thinking in probabilities.
What the consistently profitable traders are willing to do, was to work through their obstacles and challenges. They understood what they have available to them, and work at it until they are successful. They realize the pot of gold has been right underneath them the entire time, and all they had to do was dig – long, hard, and with the unfailing belief they will get to the gold underneath them.

I know of no profession, sport or skill based endeavor you can enter, that within a few months, you are operating at a professional level. Yet many beginning traders quickly abandon something if it doesn’t create a 45+ degree equity curve and hit over 80% accuracy in the first month or two.
What has fascinated me, is how I could teach traders the exact same price action or ichimoku systems, yet get wildly different results, with some being highly profitable and consistent – while others not. Usually those who stick with it regardless of the results eventually find their ground, and start to trade consistently and successfully.
Imagine a World…
I cannot imagine a world where Benjamin Franklin gave up after his first few rejections and failures, or Einstein not pursuing science after failing to get accepted at the Swiss Polytechnic school, or Michael Jordan never playing basketball after failing to make the Varsity team in High School.

The good thing is, whatever is separating you from being consistently profitable at this moment, is completely learnable. The mind has neuroplasticity to it, & without a doubt you can learn to trade successfully.
So keep digging for your pot of gold. Work with a trading mentor, continue to improve your systems edge, money management, and building your successful traders mindset. You might just be surprised what you’ll find if you keep digging.

Forex Strategies, Trading Mindset & Risk Management

You Will Have To Do This Trading

The Rosy Picture
I know the idea of being a professional trader will seem like a rosy picture, but the fact of the matter is you are going to face some tough times as a trader. You will have to do many things to be a successful and professional trader (or successful/professional anything for that matter), but the most crucial things you do will be the little things in the big moments of time.

Bottom line is – you will have to deal with making mistakes that cost you money, and a lot of it. You will have to deal with some really tough losses, whether they be 4, 5 or 6 figures. Yes, you can make 5, 6 or 7 figures, but that will be totally dependent upon you remaining completely focused, confident and disciplined while you are going through the good times, as well as the really tough ones.

In Trading…
You will have flat periods, draw-downs, losses (perhaps several in a row), but regardless of what you face mentally, emotionally, or physically, you will have to keep proper money management.
You will likely have to take a trade shortly after getting hit by the market only minutes before. You will have to deal with getting stopped out by a pip or two, only to see the market move 100+ pips towards your target. You will have to be patient and sit on your ass, even though you want to get in.
And you will have to do all of this while the market is moving in real time, while there are large profits to be made, while your emotions are working completely against you, while you are experiencing fear, or worry, or impatience, or frustration, or absolute un-clarity.

You will have to make tough decisions in real time that may not be so evident as they unfold before you in a live trading environment. It is very easy and completely common to miss the best setups happening in real time, that follow your rules, or your price action system, because in real time all of the toughest things about trading are present.
The Mountain
I know it may seem like you are pushing up against something larger than yourself, like you are moving a large boulder up a mountain, but you are actually pushing up against yourself – not the market. There is a powerful, self-reflective & insightful quote from Sir Edmund Hillary (1st to ever reach the summit of Mt. Everest) which goes;

“It is not the mountain that we are conquering, but ourselves”

This is exactly what trading is, as you are not conquering the market – but yourself.

Safe Distance & The Monday Morning Quarterback
Hindsight is a free zone, a safe distance to evaluate things as there is no emotion involved, with no live triggers to activate your unconscious or limiting beliefs. When you look at a trade after the fact, there is always clarity, and it looks like the setup was literally put on a golf tee just waiting for you tee off.

However, the reality in trading is, the clarity so available in hindsight is often barely present when trading in real time.
You wouldn’t believe how many ‘authorities‘ or ‘masters of all things price action‘ (ironic considering no peer calls them that), talk about all these great setups after the fact.
They boast how it was ‘widely discussed in their members forum’ only to find out it never was & they never traded it themselves. This is despite the fact it was an ‘obvious’ pin bar setup, or engulfing bar setup, or some other ‘obvious‘ thing they didn’t trade, but lauded after the fact.
Anyone can be a Monday morning quarterback, but can they be a trader in real time is the question. This is why lately I have been almost weekly posting my actual setups here, here, here, here, here, and here of how I traded them in real time.
This is with all the success and mistakes made while managing that live trade, with my actual entry and exit from the brokers chart, based on all the thoughts, emotions and decisions that are involved in them.
Actual Trades
If they’ve only shown you one trade in the last year, or a few in the last few months, without actually even showing you the entry and exit from their broker chart – then run away as they are hiding from the fact they do not trade. They should also be showing you successful trades from their students which you can find here, here, here, here, and a ton more here.

But make no mistake, there are many things you will have to do while trading, particularly managing, and managing two things which require practice and precision to do well. They are;
1) Managing Risk
2) Managing Your Emotions
Hopefully you already have a set of rule based systems that you follow to get in and out of a trade, so there is little management in that part. It is the two listed above that require most of your mental/emotional/psychological management and capital.
In Summary
To repeat, you will have to endure tough times as a trader, with some tough losses, flat periods, draw-downs, making expensive mistakes. And you will have to do this while not investing all of yourself and success / failure in the last trade. You always have to be trading and thinking in probabilities.
Losses are inevitable, but how you deal with them is not. If you can learn to remain focused, confident and disciplined – regardless of what just happened in the last few minutes, hours or days, then you can find yourself back towards a winning trade. But more importantly, you can experience first hand a valuable lesson, which can pick you up after you fall, carry you towards winning trades, and feed your trading career for a lifetime.

Forex Strategies, Trading Mindset & Risk Management

Trading & Thinking in Probabilities

The A+ Setups, The Trades That ‘Kick You In The Chin’

There is one mistake I see beginning traders constantly making. They wait on the sidelines for days, waiting for A+ setups, waiting for setups that ‘kick them in the chin‘, or ‘knock them over the head‘.

If you need to get kicked in the chin or knocked over the head to act, perhaps you should consider MMA, not trading. If you need this to actually do something – you really are missing the most basic thing of being a successful trader.

Your job is not to sit there like Johnny Bench waiting for the delivery of the perfect pitch. Your job is to think in probabilities, to think in numbers and expectancy. This is one advantage for becoming a better trader by learning how to play poker.

poker playing probabilities trading dev2ndskies.wpengine.com

Positive Expectancy
In poker, they have this rule about positive expectancy. It basically involves not waiting for your power hands to arrive before you play. You should [pay your medium strength hands in the right environment because they have positive expectancy.
Sure, you can wait for AA or AK suited before you get involved in the pot, but you are passing up many hands that make money in the long term. You are passing up hands that have positive expectancy. This doctrine about waiting for A+ setups is a fallacy espoused by people who really do not understand trading. It is important to remember trading is not a fashion contest.
Trading is thinking in probabilities and finding setups that make money over 100, 1,000 or 10,000x.
You have to understand, that you may not make money on the trade right now, or even the next one, but if it makes money over the long run (has positive expectancy) then you need to pull the trigger.

Beginning Traders vs. Professional Traders
Beginning traders make the mistake of waiting for setups which have 60 or 70+% accuracy, trading at 1:1 or 2:1 reward to risk ratios. Sure…mathematically these will make money, but guess what – did you know you could have a system which is 35% accurate which still makes money (and a lot of it) over time?
Although losing 65 trades out of 100 may seem daunting, a professional trader doesn’t skip these trades – because they know they make money. This is the difference between a beginning trader and a professional – they think in probabilities. They are comfortable with uncertainty, because they trust the process.

Breaking It Down
To look at it mathematically, if you take 100 trades at 35% accuracy, you win 35 and lose 65. Now if you always target 3x your risk (meaning if you risk 50 pips, you target 150 pips each time), this system will make money. Although you may lose the next 6-7 trades, all you need to do is win 3 or more, and you’ll make money over those 10 trades.
This is the difference between a professional & beginning trader. They understand the risk of ruin principle, and are not worried whether they will win the next trade. Beginning traders rationalize losing the next 6-7 trades as being bad for their overall trading, when mathematically you can still make money.

What Separates Beginning Traders from Professional Traders
Professional traders are not worried about the next trade winning or losing. What they care about is making money long term and over time. They want to maximize their profits by playing the mathematics – by thinking in probabilities.

Although beginning traders hang their entire psychology, confidence and performance on the next trade – you have to look at the next one as just one free throw in the thousands you will make over time.

A Single Grain of Sand & Your Positive Sloping Equity Curve
One way to relate to an individual trade is to see how really unimportant one trade is in the grand scheme of things. A good visual for this is – if you are currently holding a hand full of sand you picked up from the beach – that each trade is like a single grain of sand.
If you are using proper risk management and thinking in probabilities, that one grain of sand is really insignificant. Put them all together, and it adds up to something more substantial, but by itself, it really means very little.
Now imagine your positive upward sloping equity curve over the next few years, with hundreds of trades per year under your belt. That one grain of sand really means nothing in the entire equity curve of profitability. It’s just a tiny data point in a very large set.

After a Long Trading Career

If you can really grasp this, I guarantee after you have a long trading history with hundreds (if not thousands) of trades under your belt, one little trade will not mean anything to you. But what will matter, is if you pass up trades that have positive expectancy with lesser accuracy, you may lose massive profits over time.

Thus make sure to let go of whether the next trade will be a winner or a loser. Try not to invest too much energy in this. Start to think like a professional, and pull the trigger whether your next setup has high or low accuracy. If your price action strategy has positive expectancy, then that is what you need to know. When you do, you’ll realize a huge piece of the missing puzzle as you’ve started to think like a professional, and started to think in probabilities.

Forex Strategies, Trading Mindset & Risk Management

What You Need to Do to Make Money Trading (Part 2)

In part 1 of What You Need to Do to Make Money Trading, I wrote about how you need to get comfortable – particularly with uncertainty as to what will happen next. Your ability to sit in the saddle of uncertainty will determine your ability to make good trading decisions which leads to more profitable trades.

In part 2, I will delineate why you need to get comfortable with yourself in trading and what this means.

Getting Comfortable With Yourself
When I first started taking archery classes, I had to decide if I wanted to shoot a recurve or compound bow, as they definitely differ in their shooting styles, techniques, handle, potency and uses.

My teacher asked me which I prefer after a few classes, and I took a moment to think about why I was taking archery classes in the first place.

For me, I was taking classes for twofold reasons;

1) As a complimentary skill for trading (concentration, focus, precision and awareness in the moment).

2) As a meditation practice

To this end, the recurve bow felt more suited to this. Even though it’s not as powerful, or cannot shoot the same distances as a compound bow, power or distance was not the motivation behind my archery training. Hence why I shoot a recurve bow to this day.

This process for you getting comfortable with yourself has to be done in a similar way. You have to really understand who you are, how you best operate, what environments does your natural talents/skills/intelligence prosper, along with what are your specific trading goals for trading.

My guess is when you have figured these things out, the system and method will be just naturally arise and be obvious. But don’t fall into the trap of thinking you have to gun for ‘the most profitable’ system, or trade on any time frame to be profitable. You’d be amazed how many times beginning traders ask the question of ‘what time frame do you trade‘ or the more common is ‘what is your most profitable system‘.

Anytime I see this, I can see they are asking the wrong questions. Making money is not time frame dependent – as if one time frame has a monopoly on making profits. And looking for the ‘most profitable system’ really is ignoring the fact it may not be the best one for you.

It may trade only when you are asleep, or at work. Or it may force you to hold trades for days when you prefer to be out out at the end of the day. What use is it to you then?

A Good Trader
I can always tell a really good trader when I talk to them. They are never worried about what someone else is doing, how much they are making, or what system they are using. I personally know a trader that did 3000% one year with over 90% accuracy making at the end of the year over 200k a day.

Yet he is an engineer who is highly mathematical, and employs a system that took him 8 years to learn with his level of mathematical skills (way above mine). Using that system would actually be counter-productive for me, my time and my natural way of thinking.

Eventually, a good trader has settled into two things;

1) They’ve settled into how they operate best when trading

2) They’ve found a rule based system that works for them

To do this, you really need a little bit of trial and error, but it also takes some self-reflective ability as to how you are as a being.

Do you prefer to micro-manage things, and does this usually work out for the better?

Or are you best using set and forget strategies?

Are you really available to trade several hours a day, and do you want to?

Or would you prefer to only ‘participate’ in the markets a couple hours per day?

Are you really risk averse, or are you comfortable with risk and volatility?

Answers to the above questions could determine what is the best strategy, pairs and style of trading you engage in on a daily basis. The bottom line is, if it’s not a fun car for you to drive, it doesn’t really matter what kind of car it is.

You can always tell if you are uncomfortable with a system, if it racks your brain, patience and emotions using it. If you feel drained trading it – regardless of profit or loss, then it’s likely not for you. However, if you feel this with every system you use, then the issues may be more on the psychological level with how you relate to trading. This is simply because the common demoninator is you – not the system.

I myself trade both intraday price action strategies, along with higher time frame methods. I also trade both price action and ichimoku models because the combination of the two is what works for me. I like a balance between being engaged for a couple hours per day, while also holding positions overnight so I can make money sleeping, and just let them play out.

In a recent article called The Ideal Trader, I explained how combining intraday + daily and 4hr price action strategies, is ideal because it allows you to quickly grow your account (via intraday trading), while also making money sleeping. But the key for you is to find a system and style that is tailored to you across the board, and provides the soil for your natural talents, skills and intelligence to grow and flourish.

Until then, trading will likely be an uphill battle against you – not the markets. But once you’ve found a balance of what’s most natural for you – it will result in you being consistently profitable, while finally feeling settled with trading and the markets.

The next article for this week will discuss always trading and thinking in probabilities.

Kind Regards,
Chris Capre

Forex Strategies, Trading Mindset & Risk Management

What You Need to Do to Make Money Trading (Part 1)

Happy New Year of the Snake!

NOTE: For this new year, I’ll be writing a blog post and article every day of the trading week to launch the Chinese/Tibetan New Year off with verve.
Today’s article is about what you need to do to make money trading (consistently). Did you know about 35% of all retail participants make money trading? This is true, but what you need to know is in the details, that ~half of them (17.5%) make money on back to back quarters, and ~half of them (7.5%) make money on multiple back to back quarters.
This should communicate to you consistency is hard to achieve in this market, however it can be done. But you have to do some key things to make money consistently. In reality, there are many things you have to do, but these two things are critical to make money trading consistently.
So what are these two things?
I can sum them up into two words: Getting Comfortable.
Yep, that’s right – getting comfortable.
What this implies is really twofold;
1) Getting Comfortable with Uncertainty
2) Getting Comfortable with Yourself
I’ll briefly talk about the first one today, and tomorrow dive into the second. But i’ll begin with why the first one haunts beginning traders.

Getting Comfortable with Uncertainty
When you look back on a chart, everything seems so clear. You can see where your price action systems made winning trades. You can see why that key support and resistance levels held, why it was a great time to get in, why the trend was going to continue, or reverse. It’s all so clear…after the fact, and it always will be.
Why?
Because right side of the chart represents uncertainty, while the left cannot be altered. Our brains are so hard wired to look for structure/patterns/order, that any chaos, lack of structure/solid ground is unnerving for us. The reality is, we are used to setting up our lives for predictability.
We often look for jobs that have the same schedule, the same pay, the same rules – all predictable for us to plan and live our lives.
Trading forex professionally is just the opposite and requires us to re-wire our neural programming.
It guarantees no return, no fixed salary, no predictability. It is a constant sea of uncertainty we are swimming in. The only thing that allows you to make profit, is you learning to make consistently good decisions (being disciplined, following your system, managing the trade well). But to do this, you need training, practice, and to get comfortable with not knowing what is next.
Ever Flowing River
The money is there to be made, and you sense this…you sense the potential. You just have to learn how to make it. But first, you have to get comfortable with uncertainty.
Much of developing a successful trader mindset is getting comfortable standing in the ever flowing river of uncertainty. It is standing at the precipice on the waterfall into the next moment. This river, or waterfall, is often referred to as the ‘right edge of the chart‘. But in reality, it is the absolute potential of the next moment.

Most of The Time
For most of the time you will be trading and sitting in front of the charts, there will be less clarity, and more uncertainty.
If you get anxious, feel pressured, upset, or worried not knowing whether you will make money on your current trade, then you will likely make a bad decision. These often lead to losses as you probably have experienced already.
But if you can get comfortable with this uncertainty, and comfortable with losses (which are inevitable), then you will find yourself making good decisions more often than not.
Good decisions lead to better trades. And when you start doing this consistently, the money will come. The destination will always take care of itself, but the process from here to there is what you can influence.
Ask yourself which end of the statistic of profitable traders you want to be on, then ask yourself what you are willing to do to get there.
Kind Regards,
Chris Capre

Forex Strategies, Trading Mindset & Risk Management

End of The Trading Week – What Are You Doing?

Hello Traders,
It is now the end of my trading week and I wanted to ask a critical question:
When the trading week ends, whether it has been a winning or losing week, and you know you will not make any more trades, what do you do?
Most typically shut down the charts, close the platform down, exhale and then walk away.
If it has been a winning week, I’m guessing many of you go for a drink to celebrate your hard work. For a losing week…I’m guessing many of you go for a drink to forget about your mistakes and what you lost.
Instead, I suggest trying another path.
Reviewing the Tape
I noticed a long time ago the best players and athletes spend tens of hours per week reviewing tape. They are looking for what they did well, but also zoning in on their mistakes, so they know what to spend energy on correcting. Ironically, some of the best traders I know do the same.
If you are really passionate about this, and are excited to get back to the chair (win or lose) after the day, week or month – then you’ll come back and work on your mistakes while re-enforcing your successes.
Oftentimes, the difference between a successful and unsuccessful trader, is doing all the little things which add up to a big result. Taking time to review your trades and performance is one of those little things that has a far reaching reward.
There are many ways you can do this easily, using programs such as Jing, Screencast or Camtasia, which are all done by TechSmith (some are free).
How I do it is I have a folder, with sub folders for each month and week. After a trade is done, I take a screenshot (or video), color code the trade (green for a win and red for a loss), and put them in the trading folder for that week. Below is a screenshot from a live trade I video recorded, which I shared in the member traders forum.

When trading is done for the week, after getting a brief cup of tea, I come back and sit down for my analysis on what I did well and what I need to work on. Sure, at the end of the week, I’m a bit tired. But I love what I do, and dedicate a ton of energy to becoming a better trader each day, to increase my skill and craft.
What I often find is there are patterns in the price action, or Ichimoku, that repeat themselves in my winners and losers. These patterns get stored in your long term memory and central nervous system.
If you do this enough, when you are trading in real time, you will be better able (and prepared) to spot patterns, either consciously or unconsciously, which will lead to finding and making better trades.
You will spot patterns on whether it’s time to reverse and go short, or time to exit a current trade, or time to enter before a big move. All of this review builds pattern recognition skills which lead to automaticity – a critical tool for success and mastery of any skill.
Trading is a constant learning process – it never ends, and that means a constant effort and fine tuning of your skills. So the next time your week ends, consider taking a moment to review your week of trading, and build a little habit that goes a long way.
Kind Regards,
Chris Capre

Forex Strategies, Trading Mindset & Risk Management

Trading Is Not A Fashion Contest

There seems to be some fascination with newer/beginning traders to find this perfect setup, this small set of circumstances that give price action the appearance of a great trade opportunity. You’ve probably heard about these patterns and setups before, often referred to as Pin Bars, Engulfing Bars, Inside Bars, etc.

Beginning traders become hypnotized, thinking these price action patterns are all you need learn to trade the market, as if trading were a fashion contest, and your goal is to find the best dressed setup.

The problem is, this is a really confined view as these patterns are more often the result of order flow – not the cause of it.

A Means, Not the Reason
These price action setups discussed above, are a means to get into the market, not the reason why you should be. And it’s often the case, they are the secondary reason why you should be entering the market.
The reason why you should be getting into the market, is because your understanding of the price action & order flow in the overall market, gives you an over-weighted picture as to a clear direction in the market.

This direction could be for 20 minutes, hours, or even days. The amount of time it will likely maintain that direction is not important. That the price action gives you an over-weighted picture of the direction IS!

And when this happens, there is a trade opportunity. If that opportunity offers you a good mathematical reward/risk play, then you should be trading it – not because of some picture perfect setup.

Trading is Not A Fashion Contest
How many times have you seen a picture perfect setup that completely failed? I’m willing to bet dozens of times, and if you trade long enough, hundreds or thousands of times.
Why is that?
Because trading is not a fashion contest where you are looking for the best dressed setup. Because price action setups can and will fail, which should communicate to you – not to become fascinated with finding the perfect price action setup.
What it should mean, is you want to develop your ability to read the overall picture of the market, understand the order flow behind it, learn to read the impulsive and corrective price action. Then, look for an over-weighted scenario. Once you find it, check the math to see if it’s favorable. If so, then take the trade.

Missing High Quality Signals
If you are always on the hunt for the perfect setup or trade, you will likely be completely missing high quality signals passing by right in front of you.
The greatest mistake of higher time frame traders is they often do not take great trades that are right in front of them, because they are waiting for the ‘perfect‘ setup – one that will hit them over the head.
The problem is in passing up these trades, they are also passing up high quality signals that offer a mathematical edge and profits.

Ironically, the greatest fallacy of intraday traders is they will often take trades that are not there, or not of high quality. Although it may seem like the former is better than the latter, both are the same!
The higher time frame trader makes a lot less profit because they pass up really high quality signals, looking for their perfect match.
Meanwhile, the intraday trader while often having more profits, generally has slightly more losses, because they are taking trades that are not there. Their upside is higher for executing their edge more, but the extra losses pull them back.
Thus, when you really see this clearly, these are two sides of the same coin! The trick is to find the balance and wisdom of the two, not to stay on one side of it. This is the knot of trading you have to untie.

A Fantasy World
Spending your time looking for the perfect setup is living in a fantasy world. It’s like looking for the perfect partner – how many people have you really met that have one? How many people have you met thought they found one, & were completely wrong? Food for thought – but trading is not a fashion contest, and it’s not about looking for the perfect setup.

Same Setup – Different Result
There are many times several of my price action traders spot the same exact setup, yet end up with completely different results.
How could that be?

Because they managed the trade differently. One took profits a little early (but still ended up profitable), while the other caught a huge portion of the move.
Although it may seem like this one trade may not mean much – it means a lot if its repeated.
When trader A encounters a series of losses (and you will, regardless of your strategy), their downside will be more severe and they will take more time to recover. However when trader B encounters the same downside period, their recovering will be faster, because they padded on more alpha to their trading account. For them, it only takes a few large wins to erase a lot of losses.
Keep in mind, they both spotted the ‘perfect price action setup‘, yet they both had different levels of profits.
What was the difference? In how they managed the trade.
This should be communicating to you, what is far more important than finding the ‘perfect’ price action setup, is learning how to manage the trade. And this really comes down to three things;
1) Understanding Risk Management
2) Learning to Read Price Action In Real Time
3) Managing Your Emotions/Mental State

Perhaps you can find the perfect setup, but fail to do the three above, & your perfect setup is powerless to deliver consistent profits. Bells should be going off in your head now about what you should be spending your time studying. It’s not how to spot a pin bar, or engulfing bar, or some other magical bar. It’s about setups, price action and context.
These pin bars, engulfing bars, or any bars are easy to find, and take little mental effort. The learning process for this should be short.
But the learning process for the three things I listed above prior, should be never-ending.
I understand why many of you have made this mistake. There are these so called ‘authorities‘ and ‘masters‘ (notice self-labeled as no peer will call them that), who claim you only need 3 of these ‘setups’ to understand the market. That these great setups only occur on higher time frames, that intraday price action trading is to be loathed, that accuracy and profitability has a linear relationship with time frames.
Ah yes, and don’t forget the three golden setups – how convenient! As if a market with over a million participants, composed of retail & institutional traders, hedge funds, banks/brokers, pension funds, HFTs, intraday traders, swing traders, long term position traders, etc. are all subdued by these overlords of price action patterns.
High quality signals occur on every time frame, and there are profitable traders across the world trading on almost every time frame. Intraday price action trading is not to be loathed – that is just a personal feeling of some, while a ATM machine for others.
Who is right? Neither – thus don’t hate intraday trading because it doesn’t work for you. The greatest mistake a trader can do, is to think their world and thoughts about reality – ARE REALITY! As if your wisdom and insight is so brilliant, so total, so complete, that it has a monopoly on the truth about trading.
Does that sound reasonable to you? Or does it seem more likely there are many ways to trade successfully, and the best way is what’s comfortable for you.
Just remember, what may be comfortable for you, may not be for another, and neither one individually is reality by itself.

Heed the wisdom of Obi-Wan Kenobi who once said, ‘Only a Sith sees in absolutes‘. Don’t be the Sith in trading, or follow a Sith.
Find wisdom in things, then find what is most comfortable for you, while constantly challenging yourself to take things to the next level. Rarely ever where you start this journey (both in trading and in life) is where you end up. Thus remember, trading is not a fashion contest, but it is about managing risk, your mental state, and learning how to read and trade price action in real time.

Forex Price Action Trades +1640 Pips

Forex Trading, Ted Williams, & The Little Details Pt. 2

Forex Trading, Ted Williams, & the Little Details Pt. 1

The Beggar and The Trader

You Will Have To Do This Trading

“It is not the mountain that we are conquering, but ourselves”

Trading & Thinking in Probabilities

What You Need to Do to Make Money Trading (Part 2)

What You Need to Do to Make Money Trading (Part 1)

End of The Trading Week – What Are You Doing?

Trading Is Not A Fashion Contest

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Options Trading

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