price action skills – 2nd Skies Trading

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Forex Trading Q&A: How We Teach Price Action Skills & Why You Need Patience

Forex Trading Q&A: How We Teach Price Action Skills & Why You Need Patience

In this week’s video, we’re answering a question from MJ who was a confirmation price action trader (i.e. trading candlestick patterns) and was having trouble converting from that to placing entries without specific candle patterns for his trade setups.

MJ was specifically asking about trading breakouts and our breakout strategy, along with how to enter on a breakout setup.

If you’ve struggled with any aspects of this in your trading, then make sure to post a comment as we might feature your comment in the next video.

Forex Strategies

The Problem With Trading Mentors & Trading Education Today

What You’ll Learn In Today’s Trading Article:

-Why most trading courses will fail to teach you how to make money trading
-Major problems in the trading mentor and education industry today
-How can we implement technology to help improve trading courses

Retail forex traders (along with stocks, futures, options, commodities and global index traders) have a problem, and it’s a problem the broker has as well. Most traders who open an account on January 1st of any year will not be profitable at the end of that year.

Think along the lines of 8-9 out of you traders will not be profitable at the end of the year.

9 out of 10 traders won't be profitable 2ndskiesforex

Now when I started trading forex back in 2000/01, there were about 6 websites online about forex trading. Now there are millions of forex trading sites with thousands of online trading courses.

We’ve had a massive proliferation of online trading courses, trading mentors and educators, yet the needle of retail traders making money has barely moved. Hence you have to ask the question; why are so many retail traders losing money?

The answer really only has 3 possibilities:

1) There is a problem with the trader (you)
2) There is a problem with the trading education out there
3) All of the above

The answer to the above question is #3.

Without a doubt, there is a problem with you (the trader). This is implicitly obvious in the fact you are constantly studying, training, and taking trading courses. You’re doing this because you realize you need to make changes to your thinking, trading mindset, and price action skills to make money trading. Hence you implicitly recognize (consciously or unconsciously) there is something you need to fix, thus making #1 true.

On the other hand, there is a problem with the trading mentors and education today. Think about this probabilistically:

How can there be an enormous explosion + proliferation of trading courses and educators out there, yet profitability over the last 10-15 years barely move?

Even if the root of the problem to profitability is just with the trader (you), then isn’t it the responsibility of the trading mentors + educators today to recognize this, and then change their trading education and courses to help mitigate this problem?

Hence, the answer to the above question (as to what needs to change to make more retail traders profitable), comes down to you + the online training available today.

For trading mentors, our job is to train you in 3 main areas to help you make money trading:

1) building a successful trading mindset
2) acquiring trading skills that can give you a trading edge over time (i.e. technical, fundamental, sentiment, or flow based)
3) learn to properly understand, quantify and manage risk

And while I have written over 1200+ free trading articles to date, have been trading since 2001 and training retail traders since 2007, I am not immune to some of the problems in the trading industry I’m going to talk about today.

Since 2013, I’ve been thinking heavily on how to solve these problems in the industry. By 2015, after doing 2 years of research on this, I felt like I found several solutions to make more traders become profitable and change the trading education industry. From 2015, I’ve been quietly in the background working with developers to build a solution.

chris capre trading office

Since that year, I’ve spent close to $200,000USD building this solution to help change the trading education industry. And just a few months ago, I’ve been working with another trader in the industry who has the same focus, vision and commitment to changing the trading education industry forever.

We’re pretty close to announcing it’s launch soon, but for this article, I’d like to highlight why most trading courses today will fail to turn you into a profitable trader. Then I’d like to talk about how technology is a vehicle which can (and will) provide real world solutions to changing the way you think, trade and perform.

Let’s get into this controversial and (IMO) critical discussion to have about trading mentors, educators and online trading courses.

Problems With Most Trading Courses Today

If you’ve taken an online trading course, or looked to take one, you’ve probably found thousands of courses out there. The majority of all trading courses fall into the following categories:

Online trading courses (pdf’s, videos, books, text, webinars, live courses, etc)
Online Trading Rooms/Chat Rooms
Live in person training (seminars/workshops)

The first two are the most prolific because a) they’re more accessible, and b) the most cost effective.

Live training in person is the least prolific because they’re a) not easily accessible being location dependent, and b) expensive for the amount of time you get doing live training.

london trading seminar 2ndskiesforex
(Image: London Trading Seminar 2015 – twas an amazing trading seminar)

Regardless of which category of training you work with above, they all have two things in common;

They’re all primarily ‘informational’ (this means they spend the majority of time giving you information)
Their feedback loops are almost always voluntary, not consistent, not automatic, not ongoing, and not continually updating.

Let’s address the first point to start with.

Why Informational Courses Fail to Help You Become Profitable

With informational courses, the general sentiments is ‘If we give you the information you need to make money trading, you should be able to then go make money trading…eventually‘. The problem is, you have to assimilate that information into trading skills, with you doing the majority of the work.

Why do ‘informational’ courses not build your trading skills? And why is the feedback model with most trading courses so poor?

Information Does Not = Successful Trading Skills

How many trading articles, books and videos have you digested over the last several years? My guess is somewhere in the 100’s, perhaps 1000’s? Now if 8/9 out of 10 of you are not making money, then why hasn’t all the books, articles, and trading videos you’ve studied turned you into a successful profitable trader?

Do you really think reading books about golf will make you a good golfer by itself?

Do you really think watching 100’s of martial arts videos on youtube could turn you into Bruce Lee?

Can you become a good archer simply by reading books on archery?

No, of course not. That’s because information (by itself) does not make you a profitable trader.

Trading is a ‘skill-based’ endeavor, meaning you have to wire specific trading skills into your brain to make money trading. Luckily, you have an amazing neurological feature called neuroplasticity, which means your neurological circuits can re-wire themselves (through training and repetition) to make money trading.

This is a real thing.

Now there are 7 characteristics (or rules) behind neuroplasticity. They are:

Intention
Mindfulness
Belief
Emotion
Focus
Repetition
Choices

Notice the word ‘information’ is not in the list above. So jamming as much information to your brain as possible (by itself) will not make you a good trader. Just think back to your college/university days, and try to think about how much of the actual information you digested you can still recall today?

Bottom line is information does not = making money trading.

Now there are 4 of the 7 rules above which are super powerful for impacting and increasing neuroplasticity in your brain, but the one that is most fundamental is #6 (repetition). Simply put, you cannot build new neural structures without repetition.

Hence, since trading is a skill based endeavor that requires ‘repetition’ of a specific action (i.e. proper trading preparation, analysis, execution, risk mgmt, etc.), to make money trading, you’ll have to wire those skills into your brain.

Reading books or watching videos over and over again simply won’t cut it. You’ll need to continually practice those critical skills till they become professional.

Why This Matters

If most trading courses today are ‘informational’, then isn’t there a problem with the trading education and courses today? Doesn’t this mean the majority of trading courses out there are not going to help you make money trading?

While you’re at it, when you think about your struggling performance you’re experiencing right now, recall how many trading courses you’ve taken and ask yourself; how many of these trading courses were ‘informational’ vs focused on ‘building skills’?

Most Trading Courses Have Poor Feedback Models

The second problem with most trading courses today is they have poor feedback models.

The best way to understand this is, reflect upon what gives you ‘feedback’ when learning to trade or taking an online trading course?

-the market (wins/losses/timing/trading location/accuracy/instruments/performance, etc)
-your emotions
-your self-talk
-your perceptions/attitudes about your trading performance
-your experiences
-environment
-the course content
-the skills your course teaches you to build

feedback model

Now there are several types of feedback you can get, but all peak performers in trading, sports, etc have the following characteristics:

The feedback model is quantified
The feedback model is automatic
The feedback model is ongoing
The feedback model is responsive
The feedback model is continually updating

For a feedback model to be quantified, there has to be fixed metrics you’re measuring through the course that are minimally sufficient to give you quantified data on what you’re specifically performing well with, and what you specifically need to change.

For a feedback model to be automatic, it has to be one where the feedback and data collected is automatic.

For a feedback model to be ongoing, it has to be feedback you’re consistently getting over time.

For a feedback model to be responsive, it has to be able to analyze what training/feedback/execution variables are improving your performance, and which are not.

For a feedback model to be continually updating, it has to be collecting your performance data and continually updating it based upon new data coming in and how the bulk of your performance is changing over time.

Now of the above 5 models for feedback, how many of them does your current course provide? My guess is 1, maybe 2 max. It needs to be said, while my 2ndSkiesForex trading courses offer quantified feedback (our Trading Analytics sessions), which is ongoing, responsive and continually updating, it’s not automatic (not yet at least ;-).

If you’re missing 2-3 feedback models above in your current online trading course, then you’re likely getting insufficient feedback and clarity on how to improve your trading performance. And that can mean the difference between making money trading, and losing money trading.

You’ll have to decide which side of that equation you want to be.

Final Thoughts

I believe the trading education industry needs to change. I think we have to improve our feedback models, along with stop producing ‘informational’ courses, and start building more skill-based trading courses.

This means not just teaching systems and how to enter/exit a trade, but how to build the most important base skills of trading. This has to be done in the same vein as professional basketball players continually work on their dribbling, passing, footwork, and shooting skills day in – day out.

I also believe the trading education industry is going to change, and it’s going to do so with the help of technology. I feel the technology is in place to produce the best training tools available, so you can become a peak performing trader who makes money trading.

beautiful car sunset

Now Your Turn

Do you feel the trading education industry needs to change? How do you think online trading courses can be improved? How do you see technology helping with this process.

Make sure to share your thoughts and leave a comment below as I’m very passionate about this topic and changing the trading education industry.

Lucy & Trading Forex Successfully – What You Can Learn From Lucy

This weekend my girlfriend and I watched the new movie Lucy with Scarlett Johansson. Entertaining, funny and somewhat provocative, the movie describes a woman who (through a strange turn of events) develops an ultra-powerful brain.

Being that I have studied Neuroscience at the University, while my partner has studied the brain from a health perspective, an interesting debate ensued after the movie during our summer saunter home. And out of the blue….the conversation shifted to trading (I wonder why :-0).
We’ve both trained traders, but from different fields, and we both realized there was a lesson inside the movie for those of you wanting to build a successful trading mindset. Below is our key takeaway from the movie, what we noticed about it, and how struggling traders can breakthrough to profitability.
Unsuccessful People Believe in Events, Successful People Focus on Process
In Lucy, Johansson has CPH4, a new and powerful drug, put into her stomach that is to be sold worldwide by a ruthless businessman. After being kicked in the stomach, the CPH4 releases into her bloodstream, overcoming her blood-brain barrier, causing her brain to expand in capacity and abilities. Within minutes (after a gravity defying series of convulsions), she starts to develop super human abilities (or are they ‘human’, just undeveloped in us???)
Philosophical and scientific debates aside, why do movies like this sell? Why do we constantly see movies about random ‘events‘ that turn people’s fortunes instantly – Limitless, Powder, Trading Places, Brewster’s Millions (yes, I’m old)?
The answer is, because they follow the general meme of most media, literature and culture – they focus on ‘events‘, not ‘process‘.
What do I mean by an ‘event‘? For this article, when I’m using the word ‘event’, I’m specifically referring to the end result moment in a long chain of events.
An event is the big paycheck, the striking it rich moment, the they’ve made it moment.

Media typically focus on events because it keeps the dream alive. Nevermind the largest wealth gap in history happening right now, or that home incomes dropping to multi-decade lows around the world.
Events get more reads, clicks and attention, giving people the idea that in a flash of lightning become rich, become a world-class athlete, some super special trader, or ultra-intelligent like Lucy.
But an untold sub-text lies underneath all these rosy ‘events’. There’s a harbinger behind each of them. That is, when you hear about an event, you don’t hear about the long process said-now-successful person went through to get that big paycheck.
A $57 Million Dollar Payday
Richard Sherman, the feisty outspoken cornerback for the Super Bowl Seattle Seahawks, recently landed a record breaking deal of $57 Million, becoming the highest paid cornerback in the NFL.
You’ll hear/read tons of stories, piling to the heights of Mt. Everest in the media about his big paycheck, the terms of the deal, how much it is, whether he is worth it, and how it breaks records.

What you won’t hear about is how Sherman was born in Compton (a really rough neighborhood in California), and how many people he knew were killed due to gang violence. Or how he was the Salutatorian in his High School class (second of all students academically) spending hours studying after a long day of practice, or an all-american track star, or a super late round draft pick in the NFL.
How many stories have been printed about his ‘process‘, all the hardships he went through to get this big paycheck, or how hard he worked over the last 8+ years? Compare that to the number of stories printed about his ‘event‘ and record breaking payday. I’m guessing the event articles outnumber the process articles by a margin of 10:1, maybe even 50:1.
Why? Because stories about ‘events‘ sell, and those about ‘process‘ don’t. Who wants to hear about how they have to work harder to become successful when you’re already working down to your bones? Who wants to hear they may have to put in 7 day work-weeks for 7+ years on end, when you barely make it through a five-day work-week with a family to take care of?
Few if any, but I’m not here to give you a false picture about trading. I’m here to help you become a successful and profitable trader.
14+ Hours Behind The Charts for 7 Years Straight
Outside of the members in my trading community, most don’t know I spent 14+ hours behind the charts for the first 7 years of trading, or worked 6-7 day work weeks at the broker when I was only paid for 5, or how I skipped out on many parties or weekend events on warm sunny days practicing on forex tester 2, and refining my price action skills. There was no ‘event’ behind my current success, just a relentless focus on process.
Breaking the Bank of England (An Event)
I’m guessing you’ve heard of George Soros’s big trade where he broke the Bank of England. But how many of you know the story behind it, about how he and Stanley Drunkenmiller did painstaking research for months on end, constantly getting rejected by investors to help finance his trade idea, or all the other work put into it?

Simply put, popular culture (especially in trading) has been trained to think ‘events’ just happen, and that ‘process’ is less important. You have to reverse this equation, and make process first.
Process Creates Events
By putting process first, you create the grounds for events to happen. Creating a garden doesn’t simply happen by buying a bunch of plants. You need to buy good soil, build a plant box for them, dig holes and plant them, give them nutrients, pull out weeds, and make sure they get the proper amount of sun regularly. Trading is absolutely no different.
First you had to study the basics of the market and the terminology behind it. Then you had get a free demo account and learn how to use the trading platform. After this you had to learn how to read charts and understand price action in real time. Then you had to find a trading system which made sense for you, then build a trading plan, then practice reading the patterns in the market, then train to accelerate your learning curve, learn optimal times to trade, build consistency in your trading execution, build confidence in your trading mindset, and then perhaps shift to live trading.
All of the above doesn’t happen without a focus on process in trading. Only seeing the event doesn’t help you get through the tough moments, help you keep the right perspective when draw-downs occur, or pick you up after a big loss.
Process keeps your head down until you have covered the distance. It helps you to continually move forward when you want to quit. So reverse this equation, re-direct your focus on the process, on what’s in front of you right now.
In time, you’ll find that big paycheck. It is there, and many of my students are now getting that big paycheck.
Like the one student of mine who just got $5 million in seed capital for his new trading fund, or Tony who started his own private fund after doing 110% return on capital over a year, or another Tony who made 100% return in just a few months risking only 1% per trade, which we talked about in our private members webinar, showing his real myfxbook account (image below).

I have many students trading forex successfully, but they all got there via process. There is no reason you cannot be next.
Always Preceded By This
Events do happen, but they are always preceded by process. So take the time to see where you are (and are not) focusing on process. Then build a plan of action re-directing your efforts to each of these skills, create timelines to complete them, and measure your progress until you get there.
Remember, the very underlying reason behind ‘the holy grail‘ is a pill, a one shot silver bullet, a solve-all-your-problems thing which takes you from losing money to super trader. Does such a pill or thing exist in Football, Basketball, playing piano or Martial Arts? No. So why would you think this exists for trading forex?
Why would you think all you need is a system to be printing money out of your laptop and trading account daily? Does having the best bow make you a professional archer? No, and neither does one system help you make money week in-week out trading. Process, and focusing on the little details does.
In Closing
The underlying cultural sub-text of the movie Lucy, is that events sell, but process doesn’t. Yet it is a focus on the process which gets you the big paycheck. Most of the world’s richest today got to where they were via process, not events. Many of them were homeless, or surviving on next to nothing at one point in their lives. Now they can buy a small island of Fiji.
You have a method and road map, now it’s time to dig into the trenches and do the work. The results are worth it, and so is what’s waiting for you.