This is one of the most important elements that I feel most aspiring traders and trading educators miss.

In this post, I'll show you why knowing your Trading Heroes (TH) Trader Personality Profile is so important to your success and how you can figure out your profile. Once you have defined your profile, I'll also show you where to go from there.

Why Your TH Trader Personality Profile (THTPP) is Vital to Your Success

Before we get started, you need to understand why figuring out your THTPP is important, primarily when you are still learning to trade consistently.

The power of knowing your THTPP lies its ability to focus your attention on learning strategies that have the highest probability of working out for you. 

Learning to trade is hard enough.

Don't make it harder by trying to learn strategies that will never work for your personality or lifestyle.

Once you have mastered at least one trading strategy, then your THTPP becomes less useful because you already understand the process and mindset of mastering a strategy and can apply it to strategies that you might necessarily be a perfect fit for.

Alright, here we go…

The TH Trader Personality Profile Breakdown

The THTPP is broken down into four core areas, with three subcategories in each:

• Trading Timeframe
  • Position (P)
  • Swing (S)
  • Day (D)
• Chart Type
  • Countertrend (C)
  • Trend (T)
• Strategy Type
  • Technical (T)
  • Fundamental (F)
  • Balanced (B)
• Risk Level 
  • High (H)
  • Medium (M)
  • Low (L)

Let's take a closer look at each of these areas…

Trading Timeframe

The first step is to understand what timeframe works for you.

I prefer swing trading.

…but that's just me.

A big reason that most traders fail is that they don't match their trading timeframe to their personality and lifestyle.

They take a course and the instructor says that swing trading is the best, so they follow that advice until they get a margin call.

So don't do that.

Think for yourself. 

You can make money on any timeframe.

Yes, longer timeframes will give you fewer trades, but you can compensate by trading more pairs or adding more strategies to your arsenal.

If you aren't familiar with the timeframes, here's an explanation of each one.

• Position trading: You stay in trades anywhere from a few weeks to a few years.
• Swing trading: You stay in trades anywhere from a couple of days to a few weeks.
• Day trading: You stay in trades anywhere from a few seconds to a day.

I think you are starting to see why defining your timeframe is important. 

If you are a busy parent, then day trading probably won't work for you. If open trades make you nervous, then day trading might be for you because you will close out your trades at the end of every day.

Also consider what you want your life to look like as a successful trader.

If you really want to hang out on the beach and travel the world, then you should probably work on swing or position trading strategies. However, if you like the excitement of facing a new trading day with a clean slate and trading for a few hours, then day trading might be for you.

Of course, there are exceptions. But that's the general rule of thumb.

So stop thinking about trading systems in terms of how much money the educator makes in their trading account and start thinking in terms of how well the timeframe suits you. 

Strategy Type

Next, you should consider what type of trading strategy makes sense to you. Do you primarily rely on fundamental or technical analysis to make trading decisions? 

Most people use a little bit of both, but pick the one that you will primarily use.

In very, very rare cases, some traders will use an equal balance of both technical and fundamental analysis. If that is you, then select the balanced option.

Chart Type

The next thing you should consider is type of chart pattern you are looking for to enter trades. Even fundamental traders will usually favor one chart type over another.

Here's a breakdown of the classifications:

• Countertrend: You are looking for a point on the chart where price changes direction.
• Trend:  You are looking to trade with the trend.

Yes, there are strategies that can be classified in more than one category. But do your best to define these terms in a way that makes sense to you and classify yourself accordingly.

Here's an example of each of the categories:

Note: I also used to categorize chart types as Breakout, but I don't do that any more. I feel that a breakout trade is essentially trend our countertrend, so I eliminated that category to streamline things as much as possible.

Risk Level

This one is pretty straightforward, but it is also relative.

To make things simple, here's how I define the levels:

• Low: Risking less than 1% one each trade
• Medium: Risking between 1% and 2%
• High: Risking more than 2%

From what I've seen, most traders should be trading with low to medium risk.

…at least in the beginning.

But if your testing shows that you can trade a high risk system and you can handle the drawdowns, then forward test it in a small live account.

Do what works for you.

If you have a lot of backtesting data, remember that you can plug it into the calculator to figure out how much you should be risking per trade, to avoid your “freakout' drawdown.

To learn more about how to figure out your optimal risk, read this post.

Putting it All Together

Alright, now simply take the first letter of each classification and put them together to form your TH Trader Personality Profile.

For example, I'm primarily a:

STTL

Again, this should not make you feel like this is the only way that you should trade.

But it is the best starting point to help you focus your attention on what has the best possible chance of working for you.

Where to Go From Here

Give your THTPP mindful consideration and don't just fill in what you want to be. Sometimes, what we want to become is different from what actually works best for us.

For example, John thinks that that day trading is sexy and exciting, so he wants to be a day trader. But in reality, he has a demanding job and two young kids, so swing trading is probably a better fit for his lifestyle.

If you aren't sure about what works best for you, do this…

Open a demo account and take trades from all of the categories, at the same time.

For example, if you don't know what chart type works best for you, then pick two different trading strategies. One trending and one countertrend.

It doesn't matter if the strategies are profitable or not. You are trading in a demo account, so you aren't risking real money anyway.

The important thing is to understand what feels best to you. 

Do this for about a month. At the end of the month, note which one you like best or makes the most sense to you.

Go with that.

It's not important to be perfect and pick exactly the right one.

The more important thing is to make a decision on where you will focus your time and energy.

You can make a change later, if it's obvious that you should be doing something else. But you will reach your goals faster by failing quickly, rather than trying to be perfect from the start. 

Once you have your profile set, then go out and find trading strategies that will fit this mold. It might surprise you how much easier it is to find courses and backtest, once you narrow down your focus to what fits into your THTPP.

You can also alter existing trading strategies to fit your profile. For example, if a trader teaches a strategy on the daily chart, but you are a day trader, then test it on the 5 minute chart.

Never risk real money until you test it!

Alright, that's how you figure out and use your TH Trader Personality Profile.

Now get to work!

The post How to Figure Out Your Trader Personality Profile appeared first on Trading Heroes.

After talking to hundreds of traders over the years, there are really only three things that separate the successful traders from the unsuccessful ones. Like most things that work well in trading, these three things are very simple.

Note that I said simple, not easy. 

So if you are still searching for consistently profitable trading, then it is likely that you need to improve in one of these key areas.

The Right Trading System

I’m not talking about a trading system that makes the most money.

All successful traders have found a trading system or systems that match their unique personality.

That could mean a high win rate (but low R multiple) trend following system, or it could be low win rate (but high R multiple) countertrend system.

…or whatever. There are so many ways to trade successfully.

But the key is to find trading systems that work for you.

How do you do that? Well, it boils down to figuring out the following:

1. Are you more of a fundamental trader, technical trader, or a little of both?
2. If you are a technical trader, are you a breakout, trend or countertrend trader?
3. What is your ideal trading timeframe? Is it day, swing or position trading?
4. What is your overall risk tolerance?

As soon as you can confidently answer at least three of those questions, then the number of trading systems that would match your personality drops significantly. This makes it much easier to find a trading system match.

Action Step

If you haven’t downloaded my free book on how to pick the right trading system for you, then I would highly recommend that you go here and download it before you continue reading this post.

It will give you more details on how to figure out the best trading system for you.

An Upgraded Mindset

Yes, upgraded.

I have not heard of any successful traders, who were successful from day one.

Successful traders are made, not born.

We have to work on our mindsets in order to withstand the unique challenges of trading.

The right trading mindset consists of several different components:

• Perseverance
• Ability to put in regular work
• Being able to withstand drawdowns
• Not getting too excited when a trade goes your way
• Following your trading plan

…to name a few.

You probably need to work on one or more of these traits (like all traders), so here's how to get started…

Action Step

In order to upgrade your mindset, you need to understand your current weaknesses. This might take a little longer than you may think because your weaknesses may be hard to figure out.

As I have worked on my own weaknesses and watched others do the same, one thing is very apparent. A majority of our bad habits, neuroses and insecurities, come from events in our childhoods.

We may think that we have all grown up to be well adjusted adults. But from what I have seen, nothing is further from the truth.

Most of us still have mental weaknesses that trading will expose in a second. 

So try to figure out where your trading mistakes are coming from.

• Is it from bad habits that you picked up as a kid?
• Is it from a traumatic experience that happened in middle school?

Many of these events lurk in our subconscious, locked away from our daily awareness. The easiest way to start exposing these subconscious thoughts is to start a daily journal.

You could write it in Evernote, but studies show that you engage more of your brain when you put pen to paper. Whichever you prefer, just start doing it.

Every day, write down your feelings about events during the day. Also write down your dreams. As you review your journal at the end of the week, you will start to see some patterns emerge.

This will help you understand why you do some of the things that you do.

…or maybe you already know what you are doing wrong, but feel helpless to fix it.

Once you identify the behavior that you want to correct, then seek out people, tools and courses that can help you fix your behavior. Here is a short list of resources I recommend.

• The You Get What You Trade For Course (inside the Naked Forex Forum)
• Inner Talk subliminal recordings
• The Power of Habit book

Talking to a friend about your challenges or seeking help from a professional can also provide another perspective. Keep working at it until you figure it out.

It's not easy, but the rewards are tremendous!

A Community of Like-Minded Individuals

Finally, many successful traders have joined a community that helped them achieve their success. Sometimes, that community was just one other person.

I know a few traders who have figured it out totally on their own.

But most traders have benefited from being in the right group. You can call it the mastermind effect or group flow.

Finding the right trading group or buddy can help you with:

• Education: A good community can help you learn faster because there are more knowledgable people in the group. It's like when elite athletes train with other elite athletes to get better at their sport. You are the average of the 5 people you surround yourself with, so surround carefully.
• Identifying signals: If you are in a group that trades the same systems, then you can help each other spot trading opportunities. This can prevent you from missing those big trades. A group can also help you stay away from bad trades.
• Moral support: When you aren't trading well, a good community can keep you positive and prevent you from revenge trading.

If you don't find a compatible trading buddy or group on the first try, don't get discouraged. Keep working at it.

Here’s how I would recommend getting started…

Action Step

If you would like to reap the benefits of a trading community, there are a couple of ways that you can go about it. Some people prefer to work with one or two people, while others like the social interaction of a larger group.

There is no right or wrong answer. If you aren't sure what is the best for you, try both and see how you like them.

Find a Trading Buddy

I have personally found a trading buddy to be a HUGE help. This person helps keep you accountable and you can bounce trading ideas off each other.

It can be tough to find the right person however, and you may need to try out several different people before you find a good match. To find a trading buddy, you can go to a conference or talk to other traders in the trading courses you have purchased.

Based on my experience, here are some things that you should look for in a trading buddy:

• In a similar timezone: It can work if you are in very different timezones, but it is much easier to schedule conversations if you are in a similar timezone and have similar work schedules.
• Mutual respect: You must respect each other or your arrangement will fail. You must respect the other person's time and stay accountable. Be the person you want to work with and you will attract similar types of people.
• Similar trading knowledge level: If you know a lot about trading and the other person doesn’t, then you will always be waiting for them to catch up. It works best when you have a similar level of knowledge.
• Different strengths and weaknesses: It helps a lot when your strengths are their weaknesses and vice versa. This allows one person to be the “expert” and coach the other.
• Dedication: Is this person committed to learning how to trade or are they just “trying it out?” You want to make sure that your trading buddy is dedicated to learning how to trade. There are no guarantees of course, but the more dedicated the person is, the better.

Find a Trading Community

I would recommend seeking out private online communities where there is a specific focus and it is moderated by a team that you trust.

That means that you should stay off any of the big Forex forums out there like BabyPips or Forex Factory. There are always a few idiots on those forums that bring the level of the forum down to third grade name calling.

There are many private communities out there, so do some searching and find something that appeals to you.

If you need some help getting started, here are a few resources that might work.

First, I would recommend our free Facebook group. If you want to learn how to test and develop a trading system, then our paid Forex Trading Strategy Development Course can help too.

Another one of the best paid forums out there is the Naked Forex Now Community. The reason I always recommend it is because you get access to so many resources, for one low monthly price.

Walter also does a great job of highlighting other successful strategies from people in the group, not only his own. Everyone in the group is cool and they try to help each other out.

You can also join a Meetup group in your area.

Again, there are many others out there.

So do your research and find the one that you like.

Conclusion

Although these three keys to trading success may seem simple enough to take advantage of, they can be quite hard to get right. But now that you understand their importance, it's time to get to get to work.

Follow the action steps in each of the sections above and you will be on your way to following in the footsteps of successful traders before you. It takes hard work and dedication to succeed at trading.

But so does anything worthwhile in life. 

Keep going…

Disclaimer: Some links on this page are affiliate links. We do make a commission if you purchase through these links, but it does not cost you anything extra and we only promote products and services that we wholeheartedly believe in. TradingHeroes.com is a participant in the Amazon Services LLC Associates Program, an affiliate advertising program designed to provide a means for sites to earn advertising fees by advertising and linking to Amazon.com.

The post 3 Things Successful Traders Have in Common appeared first on Trading Heroes.

Understanding a couple of things can shave months, or even years, of your learning curve. One of those things is figuring out your Trading Timeframe Personality and the other is figuring out your Chart Pattern Personality (CPP).

When you understand these two things, it makes it much easier to select trading strategies that match you and gives you a higher likelihood of success in Forex trading. Luckily, there are only three types of Chart Pattern Personalities.

Yes, you might be naturally good at two or all of these types of chart patterns. But in the beginning, just choose the ONE that you are best at and perfect a strategy around that chart pattern type.

You need to do this because people's brains are generally best at spotting one type of pattern and it will help you focus on methods that are more likely to bring you success. 

Just because a trader tells you that one type of pattern is the best, it doesn't mean that it will work well for you. They mean well, but you have to experiment for yourself, to find out what is best for you.

I'll show you how you can do that at the end of this post.

But first, let's take a look at the three chart pattern types.

Trending Chart Patterns

The first chart pattern type is a trend. I'm sure that you have heard the saying: “the trend is your friend.”

Well…

Not if you and trend trading don't get along.

Some traders are really good at it. However, if trend trading does not suit you, then you will struggle at it for a long time…and wonder why.

As with any other type of chart pattern, there are different ways to define a trend. Some trading systems use moving averages, others simple price action cues.

The actual system is irrelevant. You have to find out if you are good at trading with the trend and riding it to your exit point.

Take this chart, for example. Are you comfortable buying at the arrows?

This is more of a “bargain hunting” trend trading technique.

…or does that totally freak you out?

Another way to trend trade is to buy on new highs. In this example, you would buy at any of the orange lines. It's more of a momentum trend entry strategy.

Are you comfortable with that?

If either of those entries appeal to you, then you might be cut out to be a trend trader. This type of pattern works well for traders who like to see results right away and feel good riding the wave of buying or selling.

Countertrend Chart Patterns

Other traders are better at spotting turning points in the market. If you like to be a contrarian in your daily life and enjoy proving people wrong, then countertrend trading might be for you. 

There are a few different ways that you can be a countertrend trader. One way is to trade against the price action into a support or resistance zone.

For example, on this chart…as price moved up into the orange line, would you be able to take a short position?

Of course, it's easy to say “yes” in hindsight. But imagine that you can only see price action before it hits that line.

It looks like it will keep going up!

But if you have tested your strategy and you know that it has a good probability of reversing, then you will have the confidence to take this trade.

…and if your personality matches this chart pattern you will be more likely to keep trading it, even when you are in a drawdown.

Breakout Chart Patterns

The last type of chart pattern is the breakout.

I'm personally not great at trading breakouts, so I avoid them. But it certainly works for some traders.

Here is a pure breakout from a price range. I say pure because some people trade a breakout and retest of the channel as an entry signal and I see that as more of a trend trade.

As you may have experienced in the past, the biggest difficulty with trading breakouts is that there are a lot of false breakouts.

Like this one…

That can be tough to stomach, unless you know the probabilities.

Breakouts are in a separate category because it's the only type of chart pattern that doesn't take into account the previous price action. You are simply looking for a consolidation, then a breakout of that holding pattern.

How to Figure Out Which of the Chart Pattern Personalities Matches You

Now that you know the three basic types of chart patterns, the next step is to figure out your Chart Pattern Personality. In other words, which chart pattern type do you trade best?

In order to get this information, there is no way around it…

You will need to do some work. 

First, select one trading method from each of the three categories above. Right now, don't get caught up in if the strategy actually works or not.

You are trying to figure out is which type of pattern you prefer trading, not the exact method. 

There are many places that you can get trading systems. You can dig up courses you have taken in the past or choose a system from one of the free forums out there.

If you want to keep it simple, you can just trade price action.

After you understand which type of pattern you gravitate to most, then you can start searching for specific trading methods that work. More importantly, you can start to build your own unique trading method by combining different elements of similar trading systems. 

Again, figuring out your CCP may not be easy.

But if you put in the time to understand this first, it will save you a ton of time later. 

Conclusion

This was a quick introduction to the three main types of chart patterns and why it is important to identify which one you resonate with most.

To get a list of commonly traded chart patterns, read this post.

Of course, there are different variations of each pattern. But when you examine tradable chart patterns, they basically boil down to these three types.

You may resonate with more than one. But choose one and stick to it until you figure out a specific strategy that works for you.

Otherwise, you can get stuck on the Trading Silodrome.

…and once you get on, it's very difficult to get off.

Also remember to figure out your Trading Timeframe Personality. It goes hand in hand with your CPP.

Now get to work!

If you have any questions about chart pattern types, leave a comment below.

The post 3 Types of Chart Patterns: Which One Fits You? appeared first on Trading Heroes.

Almost every trader I have met starts on the wrong end of the trading education process.

Yes, myself included.

The journey becomes too difficult for most aspiring traders, so they give up and return to their cubicles.

That's why the success rate of traders is so low.

But for those who stick it out, the rewards can be tremendous.

To give you the best shot at success, I will show you the three elements of your trading personality that you will have to understand, to get the best results.

…and hopefully shave years off your learning curve.

I'll also show you what will probably happen if you do not work out your trading personality first.

I mention this because I want to help you avoid the pitfalls of learning to trade and also help you understand the importance of figuring out your trading personality early in the process.

What if You Started With the End in Mind?

Many traders get interested in trading because they want to make a lot of money, quit their job and travel the world.

…and that's great!

But therein also lies their biggest downfall. 

They only chase the money and look for the trading method that has the highest return.

…and that works sometimes. Like about as often as Hailey's Comet comes around.

But for the vast majority of traders, that doesn't work and they just end up tired and frustrated.

However, with a little bit of foresight, you can greatly improve your chances of success in the trading game.

The key is to understand what types of trading methods would work with your personality and desired lifestyle.

I think you will be surprised at how many trading strategies you can let go of, once you know what is most likely to work for you.

That leaves you free to focus on becoming a master at just one trading strategy.

Need more return every month?

No problem, simply add more currency pairs, timeframes or trading strategies. But without one profitable trading strategy, you are just spinning your wheels and will probably fail.

That might sound harsh, but it's the grim reality of trading.

Hopefully I have communicated the benefits of understanding your trading personality first. So with that in mind, here are the three pillars of your Trading Personality.

Trading Timeframe Personality

The first thing that you need to understand is your ideal trading timeframe. I call it your Trading Timeframe Personality (TTP).

It will take a bit of experimenting to find out which timeframe works for you. There are basically three timeframes:

• Day trading
• Swing trading
• Long-term investing

You can take a few systems that you learn on the forums and trade them in a demo account.

This will allow you to get a good feel for which timeframe suits your personality and daily schedule the best.

Remember, you are looking for the timeframe that matches you best.

Not the system that makes the most money.

You can usually make more profits by trading more currency pairs or trading more systems. But is it much harder to trade against your personality and daily schedule.

Trading Setup Personality

Along the same lines as trading timeframes, are the different trading setups out there.

There are basically two types of setups that traders look for:

• Technical setups
• Fundamental setups

You might be good at one or both. But the key is to start with just one and master it, before moving on.

I call this figuring out your Trading Setup Personality (TSP).

It is possible to make money as a technical trader or a fundamental trader…or some mix of the two.

My eyes start to glaze over after I read a couple of fundamental reports, so I prefer to stick to 90% technicals and use only 10% fundamentals.

But it will probably be different for you.

If you are more of a technical trader, then you can break that down into three different categories:

• Breakout patterns
• Trend patterns
• Countertrend patterns

Figure out which one suits you best and start there.

You can always add more strategies later, but it all starts with mastering one strategy. 

Trading Risk Tolerance Personality

The third important thing to figure out is your personal risk tolerance.

I'm sure that you have heard many times on the internet, that you should not risk more than 2% of your total account on one trade.

…and this is excellent advice.

But the question then becomes, how much should you risk?

In reality, there is a per-trade risk tolerance that you will feel comfortable with, and you should not risk more than that, or you will see your performance degrade dramatically.

This is your Trading Risk Tolerance Personality (TRTP).

It is actually hard to figure this out in a demo account because you are not risking real money. So I would recommend opening a small live account with $100 and trade nano lots.

After you backtest a trading strategy, you can also use a drawdown calculator to show you how much you should risk per trade, in order to avoid a X% drawdown.

For example, if you would freak out if you lost 20% of your account, but you would be OK at 19%, then put 20% into the calculator.

Next, put in the other stats of your system.

Then play with the risk per trade until your risk of hitting a 20% drawdown goes to zero (or close enough).

The Payoff

When you start your trading journey knowing these three things about yourself, will you give yourself a much better chance of success.

If you know your ideal trading timeframe and market conditions, you can choose the right education that will help you work with your innate strengths and not against them.

This will eliminate a big percentage of courses and mentorships out there and will save you a lot of money. 

When you understand the risk tolerance that suits you best, you can use the risk that you are comfortable with, when you take any trading course.

When you do this, you reduce the chances of blowing out your account and you can stay in the game longer.

You will also have greater confidence in your ability to learn to trade for yourself and that will help you stay away from trading robots and money managers.

Now let's take a look at what happens when you don't commit to your trading and you don't figure out your trading personality.

The Typical Trading Journey

It is a little painful to write about this because I have spent way too long on some of these steps. You can probably relate.

Hopefully, by understanding the common stops on the trading journey, you can avoid the ones that won't help you progress as a trader.

Here we go…

You Hate Your Job and Discover Forex…Among Other Things

It's Monday morning and you are sitting in your desk at work.

“Shit, this sucks,” you tell yourself.

So you start surfing the internet to look for ways out of your J.O.B. and the usual stuff comes up…

• Real estate investing
• Stock trading
• Forex
• Online Marketing
• Futures
• Creating travel videos on YouTube
• Starting your own stripper cam channel
• etc.

Since you found this site, I'm assuming that you picked Forex. You are excited it get started on your new trading journey, so you rush into it.

Here's what happens next…

You Join a Trading Forum or Group

Now that you are committed to becoming a Forex billionaire, you join a free trading group or forum to start learning the basics.

This is actually a great place to start.

You can learn the lingo and get help setting up your software.

The best part is that it's free!

You follow a few of the most active threads and try some of the trading systems.

The forums help get you started, but they are also really confusing.

Some people say one thing.

Others say the opposite.

…and they start to get annoying. Conversations tend to degrade into third grade name calling.

So you look for some real education to move you forward.

You Take Your First Course

Next, you start Googling for a reputable trading course to take. You choose a course based on how profitable the instructor is and if he or she trades professionally.

Things go well for awhile and you are excited to be learning this proven trading system. Learning the system is simple enough and you start trading it in that real money account you just opened.

You Make Some Money

The trading system is working pretty well and you have your first profitable week! This trading stuff is easy, you think.

So instead of risking 1% on every trade, like your instructor recommends, you start risking more.

Maybe 5% on some trades.

But you risk 10% only on trades that you are really sure about.

It won't be long until you turn that $500 into $100,000!

You Blow Out Your Account

Then it happens.

You take too much risk on a trade, forget to use a stop loss and when you are at work…BAAAM!

You get an alert on your phone, telling you that you just had a margin call. All of your trading capital is gone.

So now what?

The Search Begins For a Trading Robot (EA)

You fund your trading account again, but this time you are going to be “smart.”

Since you cannot check your trades while you are at work, you will get a trading robot to take care of your trades for you.

So you get back onto the internets and pick out a couple of Expert Advisors that look promising. You load them onto a VPS and let them rip.

Guess what?!

They actually start making money…in the first week.

Now that your trading income is “on autopilot,” thanks to your EAs, you decided to branch out into other areas of income generation.

At this point, you tell your friends and family that you have finally figured out this trading thing.

You Do the Other Things Too

Remember those other money-making opportunties that you found at the office?

Why not explore those too?

So you start going to real estate investing meetings and even try your hand at online marketing. These activities distract you from your trading and you lose focus.

I call these activities green fairies because they tempt you with the lure of making more money, but they fly away as quickly as they came.

Around this time, your EAs usually starts to crap out.

It usually begins with the robots trading flat.

Losing a few trades, winning a few trades, then losing again. Then they start to lose more money than usual.

What's going on here?

You finally realize that if you don't know how an EA works, you don't know when it has stopped working.

So you pull the plug on your automated trading and re-commit to learning to trade for yourself again.

Welcome to the Trading Silodrome

Thus begins the cycle I call the Trading Silodrome. You jump from course to course and trading system to trading system, in search of your “holy grail.”

This phase can last months or even years. 

Every time you lose money with a trading system, you think that it's the trading system's fault. So you keep paying for courses, hoping that the next one will finally be the one that leads you to the promised land.

Rock Bottom

After awhile, system hopping gets tiring. Right about now, you are at rock bottom and are questioning if trading is right for you or not.

This is where most people quit and crawl back to their cubicles.

Now you have a decision to make…

Admit defeat, or keep going?

You have always succeeded at what you set your mind to, so you keep going…

The Search Begins for a Money Manager

Wouldn't it be great if you could get a professional money manager to trade your money for you?

Instead of having a mindless robot trade your money, you decide to find a professional money manager.

Yeah, that's the ticket!

So you split your remaining risk capital between two traders, John and Roger.

Well, John turns out to be a crook like this guy and last you heard, the authorities were chasing him through South America.

Roger is actually a really good trader. But the technology that copies his trades into your account screws up and you end up losing money, instead of making the 10% that Roger made last month.

You decide that getting a money manager isn't always all it's cracked up to be.

Back to square one.

You Find a Mentor

Determined to figure this thing out, you assess your options.

At this point, you have tried a lot of different things.

So what's left?

Get a mentor of course.

So you look around for the most successful trader you can find and schedule a private mentoring session. It costs $200 an hour, but you figure it's worth it.

The first mentor doesn't work out, so you try another.

Then another.

You are back on the Trading Silodrome again, but this time it's costing a lot more money.

But what else is there?

You Figure Out Your Trading Personality and Trade With It

You are just about ready to give up, then it hits you!

There are some trading systems that you absolutely hate to trade and others that you are sure you could figure out, if given enough time and coaching.

Now you go back through all of the notes that you collected over the years, from your trading courses and private mentoring.

Which ones appealed to you the most? You revisit those and start to learn how to backtest and forward test. You figure out which ones match your personality and lifestyle.

That's when things usually start to click…

But if you did this in the beginning, you could have saved yourself a world of hurt. 

Conclusion

As you can see, starting with understanding your personality, instead of only learning trading systems, can have a huge payoff.

But most traders don't do it that way. I don't blame them, it goes against human nature. It goes against how trading is traditionally taught.

Hopefully, now that you understand the right way to do it, this will help you improve your trading faster.

If you have been through the entire process, is that about right?

If you haven't, then where are you in the process?

Let me know in the comments below…

The post How to Find a Trading Strategy That Matches Your Personality appeared first on Trading Heroes.

When I first started trading, I thought that the answer to making money was as simple a following a system from someone who is already a profitable trader.

After all, how hard could it be?

Does that sound familiar?

Over the years, through actual live trading and interviewing successful traders, I have come to understand that there is a lot more to it than that.

Why You Will Still Lose With The Most Profitable Trading System Ever

These are the 5 reasons that you probably will lose money, even if you know the most profitable trading system ever developed.

Hopefully they will help you understand that there is a lot more to Forex trading than just having a great trading method.

5. Preconceived Notions

Although I try to enter any type of education with an open mind, I do find myself bringing in my own preconceptions. It's only natural.

But if you bring in too many ideas that you think are “rules,” then you may be shooting yourself in the foot.

Take the time to consider that what you have learned in the past may have been completely wrong or you may have learned them incorrectly or conditions may have changed.

I never realized how much of a hurdle this can be until I worked with Rafael to create a course centered around his trading method. There were several students who thought they knew better, but never even tried the system in live market conditions.

They thought that since they learned some of the concepts on Baby Pips or wherever, they weren't learning anything new or they thought it wouldn't work.

While Baby Pips is a great introduction to Forex trading, it doesn't actually teach you how to trade. Yes, read through the Baby Pips school again if you don't believe me.

So even if you did have the most profitable system ever sitting in front of you, your ideas of what will and won't work might muck it all up.

Therefore, try to keep an open mind about learning any new system. Judging it before it has had the chance to prove itself to you is like sending a racehorse to the glue factory before it has even run its first race.

4. Lack Of Discipline

This is something that almost everyone struggles with at some point.

Taking entries and exits consistently.

Following the trading plan.

Reviewing your trades.

Not falling asleep while trading.

Lacking discipline will certainly mess up the profitability of even the post outstanding trading system.

I don't know if there is one good way to fix this. The only answer I have is that you need to want it bad enough. If you really are dedicated to becoming a consistently profitable trader, then you will find a way.

3. Doesn't Fit Your Personality Or Schedule

This is a tough one to understand in the beginning but it makes all the difference.

One component of choosing a system that fits your personality is finding out which market conditions you trade best in. Rafael learned that he is a better counter trend trader. I have found that I feel comfortable with either trend trading or counter trend trading.

Another component is time frame. Some people get impatient waiting for longer term trades to setup, so they might be better day traders.

Others (like me) don't like to sit in front of the screen and watch price wiggle up and down. So we prefer swing or position trading.

You also have to take into account is how much time you have available to trade. If you have a demanding day job, then watching the 5 minute chart like a hawk probably isn't the best thing for you.

So even the best trading system ever created will not work if it doesn't fit your individual personality and schedule. Pay close attention to what works for you and what doesn't.

Just because somebody else is killing it with a system, it doesn't necessarily mean that you will too.

2. The Education Myth

Human nature seems leads us to believe that there are magic trading systems that will take us by the hand and lead us to the promised land of fortune and glory.

Or is it really human nature?

If we dig a little deeper, it may be more a result of how we are educated. We are punished for getting answers wrong and rewarded for being able to recall the one or two “correct” answers. Think back to your tests in school or what your parents taught you.

Therefore, most people who come to trading think it works the same way. Follow one set formula and you will succeed.

But even if you discover an amazing trader like Paul Rotter or Ed Seykota and learn their system, will that really lead to trading success?

Experience has shown me that just having their system is far from being a guarantee. I'm not the only one who feels this way. Many of the professional traders that I have interviewed feel the exact same way.

Sure, you do need to find a system that has had proven results. Yes, finding a mentor will help you much more than trying to do it on your own.

But that is just the starting point.

So if you have tried trading systems in the past and failed to make money, consider that the answer may not be so black and white. There may be more shades of gray than you think.

1. Not Cultivating Faith

I'm not talking about blind faith. I am talking about faith that comes from having confidence in something that you have seen work with your own eyes.

This is an important point that came up in my interview with Kim Krompass. Even if you have the results of the trading system or even if the person who is teaching it trades for a living, it all comes down to if you will click your mouse and follow the system or not.

The only way that you will is if you have faith that the trading method does give you an edge.

But how do you develop this faith?

You can do three things:

1. Trade with the person teaching the system, in real-time
2. Practice on backtesting software like Forex Tester
3. Trade it in a demo or small live account

Ideally, you would be able to do all three. But that isn't always possible. So do as many as you can, because with every additional trade you take, each one will give you more and more faith that the system works.

With faith in the system, you will have more confidence to click your mouse and take the trade. You will have more confidence to exit at the right time.

…and seeing your trading account grow is the biggest faith booster of all.

But without faith, it really won't matter what system you are using.

Conclusion

“I always say that you could publish trading rules in the newspaper and no one would follow them. The key is consistency and discipline. Almost anybody can make up a list of rules that are 80 percent as good as what we taught people. What they couldn’t do is give them the confidence to stick to those rules even when things are going bad.”

– Richard Dennis

Take the time to figure out if a system that you learn really does fit your personality and schedule.

Also realize that you may have to learn several different systems before you find one that works for you and what works for you may be a combination of different things.

So don't be discouraged if the last course you bought didn't work for you. Learn everything you can and figure out what didn't work for you and what did.

Then see if you can combine several concepts to create something that does work. Remain open-minded and disciplined while learning about your personality and trading tendencies.

No matter how profitable a trading method has been for someone else, just remember that any or all of the reasons above may make it totally unprofitable for you.

Control what you can and learn to work with things you can't control.

If others have figured it out.

You can too.

Go make it happen.

Remember to keep your account as small as possible. So even if you do blow it out, you don't lose too much money and you can easily do things to build up a new one.

The post 5 Reasons You Will Lose Money Trading the Most Profitable System Ever appeared first on Trading Heroes.

This is a concept that took me awhile to understand, but I feel that it is very important, so I hope that you get some amazing insights out of this exercise.

One of the biggest things that you have to figure out on your trading journey is your Trading Timeframe Personality (TTP).

I fought this for awhile and I struggled.

But once I started working with my personality, things became much easier.

I'm not saying that this is the only thing that you should pay attention to in your trading education, but it is one of the big pieces.

So if you haven't found your TTP yet, you need to do this exercise. 

Be sure to have your notebook handy and write down your questions, ideas and answers.

What is a Trading Timeframe Personality (TTP)?

It is simply the timeframe that you feel most comfortable trading on.

If you are comfortable trading on that timeframe, you give yourself a much greater chance of success.

There are only two factors that must be taken into consideration when figuring out your TTP:

1. Your daily schedule
2. Your unique personality and attention span

Many times, we only take one factor into account when choosing an education program or trading method.

To get the best results, and to reduce your frustration, you need to consider both.

Also consider if your trading platform can support the timeframe you want to trade on.

Your Current Schedule

If you don't have a lot of time to trade, then being a scalper on a 1 minute chart might not be the best thing for you.

This is certainly the case if you have a demanding day job or you have a lot of family obligations.

I know that this sounds obvious, but I have been guilty of this myself and I have seen others make this same mistake.

It's easy to be attracted to the excitement of daytrading when you really should be focusing on longer timeframes.

On the other hand, if you have the time to daytrade, it is something you should try out.

You might be good at it.

Swing trading might not be your thing and that is why you are losing money.

How to Figure it Out

Let's start with where you are now.

Sit down and ask yourself two simple questions:

• How many hours a week can I realistically commit to trading?
• Can my dedicated trading time be set or does it have to be variable? For example, can I trade only between 1pm and 5pm? Or do I have four total hours to trade, spread out over the course of the day?

Be honest with yourself.

When considering your answers, take into account obligations such as your family, your work and time for leisure activities.

I would also subtract 30% from any hourly number you come up with.

For example, if you think that you have 20 variable hours to trade a week, subtract 30% or 6 hours.

Assume that you only have 14 hours to trade.

This is because we tend to overestimate what we can accomplish in a day. 

Then take a look at which forex markets are open during the time you have to trade. This mostly applies if you have set hours to trade. 

If you are only available during low activity times, you may want to trade on a longer time frame.

Having the London or New York sessions available for set, short-term trading hours is ideal.

If you don't know when certain markets are open in your timezone, then use this tool.

Write down your answers to this exercise in your notebook right now.

Your Personality

Now, let's talk about your personality and attention span.

Think back to when you were in school…

Were you able to study for long periods of time, or did you have trouble?

Do you prefer instant gratification, or are you willing to wait a little?

This can give you insight into which timeframe(s) you should be trading on.

How to Figure it Out

Ideas to consider:

• Do you prefer to see things to completion every day? – If yes, you might be a better day trader or scalper.
• Are you willing to wait a few days or even weeks to see your trades play out? Maybe you like to be able to enter your positions even if you are a little late to the charts? – If yes, you might be suited to swing trading.
• Do you prefer to check your trades once a days or even just once a week? – If yes, then position trading might be your best bet.

Really think about your personality and how you react when you are in trades.

One timeframe won't necessarily make more money than another, so don't let that factor into your decision. 

You might also consider taking some online personality tests for traders.

Never trust any canned test 100%.

But if they are all telling you a similar thing, then you should probably give it more consideration.

Here are a few to get you started:

• Baby Pips
• Market Psychology
• Van Tharp
• DailyFX

Now Do Some Testing in a Demo Account

Open a demo account at your favorite broker to test different timeframes.

I would recommend testing them all at the same time, to get to your answer quickly.

The trading method doesn't really matter for this test.

You could use technical analysis, fundamental analysis or astrology.

You are only testing for timeframe right now.

Do it for about a month and see what happens.

Remember to keep a trading journal to see which timeframe is working the best for you.

• Daytrading or Scalping (1 hour chart or below)
• Swing Trading (between 4 hour and daily charts)
• Position Trading (between the weekly and monthly charts)

What did you notice? 

Pay particular attention to:

• On what timeframe did you miss trades?
• Was one timeframe noticeably easier to trade on?
• Where you tempted to mess with open trades on a certain timeframe?
• Which timeframe did you lose the most money on?
• Did you find yourself getting anxious on any one timeframe?
• Where you up at night thinking about a trade? That might not be the best timeframe to trade on.
• Did you overtrade on a certain timeframe?
• Was your life getting in the way with certain timeframes?
• And more…

At the end of this exercise you should have your answer. Even if you aren't 100% sold on the result, just stick with it.

This will keep you from bouncing back and forth between timeframes and system.

I call this the Trading Silodrome.

It sucks…I've been there.

So commit and move forward, even if you don't think it's ideal.

Now you know how to choose the education you get in the future.

Will Your TTP Stay the Same?

Remember that you also aren't married to this timeframe. 

Your schedule and trading personality might change, so you might also need to change your timeframe, or add new timeframes (oh yeah!).

For example, let's say that you are able to quit your day job and start trading for a living.

You could then move from the daily charts down to lower timeframes and see if there are patterns that you can exploit for profit.

But you need to start from where you are and commit to learning one thing well. 

I can't stress this enough. 

True, you might have what it takes to be a badass daytrader.

But if you work a demanding day job, then your trading will be crap.

So maybe you have to step back a little and trade the 4 hour charts, with similar patterns.

Knowing that you can evolve later, might also alleviate some pressure around choosing the “perfect” timeframe right now.

Conclusion

My personal experience has taught me that my TTP is primarily swing trading, which is mostly on the 4 hour and daily charts.

It gives me time to see a trade and react.

I generally don't have the patience to sit around and scalp.

I also find that I get antsy when I position trade on the weekly charts and I find myself wanting to adjust positions or take swing trades around the position.

The bottom line is that you need to experiment for yourself and see what works for you.

Now get to work.

The post How to Find the Trading Timeframe That Matches Your Personality appeared first on Trading Heroes.