Have you ever shown another trader a chart and you saw a great potential long and she saw an equally good potential short?

Or have you taken a trading course and seen the instructor take great trades, but for some reason you simply couldn't see the setup until after the trade closed?

Well, there could be several reasons for this. In this post, I'll show you seven reasons why two traders can look at the same chart and see completely different trades.

I hope that this post helps you understand what could be going on in your own head as well as in the minds of other traders.

More importantly, I hope that it helps you understand that opinions can easily change from person to person, from and moment to moment.

So you need to stick to your trading plan and protect your mental capital against the opinions of others.

1. They're Currently  in a Position

Having some “skin in the game” is best reason to have a strong opinion about a chart. If you are short the AUDUSD and you start talking to a trader who is long the same currency pair, then each of you are probably going to defend your position.

When you take a trade, it's like putting on colored glasses. You will always see the market differently.

So regardless if a trade is good or not, it will always influence the opinion of a trader.

2. Completely Different Trading Personalities

As I have written about many times before, your Trading Personality plays a huge factor in determining the trading strategies that will work for you.

So whenever you talk to someone about trading strategies or positions, it's vital that you first get a feel for what type of Trading Personality they have.

If their personality matches yours, then it's probably beneficial to trade ideas. But if you have totally different personalities, then you can take a look at what they are doing, but it's probably not a good idea to let them influence your trading.

3. Different Timeframe Focus

This is a classic one.

You are in a long swing trading position on the daily chart EURUSD and you start talking to a day trader. As you talk to this trader, he is pretty convincing as to why the EURUSD will start to fall. So you start to second guess your trade, or you might even alter it.

But he could have been talking about what he thinks will happen in the next 24 hours, while your trade would take a couple of weeks to develop. Make sure that you are both analyzing the same timeframe, otherwise it's almost as if you are speaking different languages.

4. Burn Bias

Traders can have bad experiences in trading that can create cognitive biases. It's like if you burned your hand around the campfire as a little kid. You would probably stay away from that fire for the rest of the trip.

For me, I lost quite a few breakout trades when I first started trading. To this day, I won't trade a pure breakout entry.

I probably could trade a breakout strategy, but I just haven't tested them. It's not right or wrong, just a bias that I developed from previous experience.

So if another trader tells you that your trade doesn't look good, they could simply be speaking from their own experience of being burned before. That's where relying on your testing and journaling comes into play.

Let the data tell you what to do…not the opinions of others.

5. Different Trading Strategy

A difference of opinion about a chart could come from something as simple as having different trading strategies. Maybe you are a trend trader and the person you are talking to is a countertrend trader.

Well, then you are going to look for very different things on a chart. There is no right and wrong, just different ways of approaching trading.

6. Trading Skill Level

Skill level can certainly play a role in how two traders will look at a chart. A more experienced trader might see nuances in the price action that a newbie might not be able to identify yet.

New traders also tend to jump from system to system a lot and get really excited about the last YouTube video that they just watched. So if you are speaking to someone about a chart, make sure that they have some experience behind their statements.

7. Different Mental States

Finally, if a trader is having a bad day, then that could change the way that she sees the charts. We've all been there…

It starts raining out of nowhere, your car breaks down and you spill coffee on your shirt as soon as you enter the office. Bad days (and mental states) happen to everyone.

If you or another trader are distracted, then that could lead to an inaccurate analysis of a chart. Become a keen observer of your mental state and you will be much less likely to misread the charts.

To get better at becoming more mindful of your mental state, consider meditation or this tool. Also read my article on how to develop a Trader's Mindset.

Conclusion

So those are the most common reasons why two traders can see a chart very differently. Obviously, there's no right and wrong when looking at a chart.

We all have our own trading methods, experiences and biases that tell what what a good trade looks like.

The next time you are tempted to tell someone that they are in a bad trade or you are tempted to alter your trading, based on the opinion of others, be sure to remember this list. They are perfectly good reasons why your opinion is just as valid as the opinion of another trader.

Follow your plan and let your edge work for you.

The post 7 Reasons Traders Can See the Same Chart Differently appeared first on Trading Heroes.

There's one question that I get asked more often than any other.

It goes something like this… 

I'm really frustrated because I've tried so many trading systems and nothing seems to work! What should I do next? 

So instead of typing out an answer to every single email, I thought that I would take some time to collect all of my thoughts in one blog post. 

If you are feeling frustrated with your trading, then this post is for you…

You are Not Alone 

Almost every successful trader has been in the position you are in now.

I have heard this story over and over and over, when interviewing successful traders. 

Therefore, the first thing you need to do is forgive yourself and make peace with the fact that this frustration is just part of the learning process. 

It's time to embrace the suck and move forward. 

This guide will show you the best process I know of to reboot your trading in a clear, systematic way.

When you follow these steps, it becomes much easier to figure out where you are going wrong and how to fix it. 

Step 1: Take Full Responsibility for Your Trading Results  

If you are blaming someone or something else for your trading losses, stop right now.

Everything begins and ends with you. 

So take a good hard look in the mirror and repeat after me…

I am 100% responsible for my trading results. 

Here are some ways that you might not be taking complete responsibility for your trading results: 

• Blaming your broker for running your stops 
• Blaming your job for not having enough time to trade 
• Blaming a trading course for not teaching you the right strategy 
• Blaming your mentor for not giving you enough attention
• Blaming Tim Ferriss because he hasn't figured out a hack for learning successful trading in 4 hours yet 

You get the idea. 

So before you move on, you need to take extreme ownership of your situation. Even if something may not seem like it's your responsibility, take ownership of it anyway.

Have a backup plan.

Have a backup plan for your backup plan. 

For example, you cannot control when your internet connection will go down.

But you can have your broker's app on your phone so you can still execute trades.

You can also figure out which coffee shops in your neighborhood have free WiFi, so you can still trade, even if your internet at home goes out. 

If you want all of the rewards of successful trading, you need to be responsible for the not-so-fun parts too.  

Step 2: Write Down Your Trading Strategy 

Do you have a real trading strategy or are you just parroting the last trading guru you saw on Instagram? 

I see a lot of traders start trading a strategy (with real money) that they learned the day before on YouTube.

Usually, they only watched the video once and only have about 80% of the rules right. 

I'm not judging, I've totally been guilty of that too.

But if you are wondering why you aren't getting the same results as the trader in the video, then this is one possible reason. 

There's nothing wrong with getting a trading strategy from YouTube, a course or some blog.

But take the time to write it down and go over the material several times so you are sure that you understand all of the rules to the strategy. 

You need to start building a playbook. 

An easy way to write down the complete rules of your trading strategy is to download this free worksheet. 

I know what you will probably ask next…

But what if I trade several strategies? 

Then focus on just one for now.

The one that you think has the greatest probability of success. For every strategy you add, your chances of success drop significantly. 

It's like juggling.

Anyone can juggle 1 ball. 

But how about 6?

That's much, much harder. 

I'm not calling anyone dumb.

All humans have limits…including you. 

Start with one thing at become a master at it. 

Step 3: Figure Out if You Have an Edge 

Now that you have your strategy written down, it's time to test that strategy to see if it actually has an edge. 

Obviously, there are a ton of different trading strategies out there.

But at a very basic level, most traders either have a technical or fundamental trading strategy. 

If you have a primarily fundamental strategy, then see if you can get historical fundamental data to backtest your trading ideas.

Can't get historical data?

Then you will have to forward test your strategy.

Read this post to learn more about forward testing. 

If you are trading a technical strategy, the read our backtesting guide for tips and tools. 

Either way, commit to testing your strategies in a demo account or with backtesting software.

If you cannot get positive results in testing, then there's no way that you will have an edge in live trading. 

Step 4: Keep Excellent Records 

This is super important. 

In order to figure out exactly where your trading is going off the rails, you need to have as many feedback loops in place as possible.

It's like the gauges on a dashboard.

Each one tells the pilot exactly what's going on with a part of the helicopter. 

Similarly, your records will allow you to see exactly what's happening in every aspect of your trading. 

So document everything you are doing. 

Here are the records that you should be keeping: 

• If you are backtesting, you should record every single test that you do in a spreadsheet. Yes, even the “bad” ones. 
• Journal every single one of your forward testing and live trades. It doesn't matter what you use, just use what works for you. Here are tutorials on how to use Evernote and Trello. 
• Also journal your missed trades. This will show you how much profit you are missing out on and more importantly…help you figure out how to stop missing out. 
• Track your win rate in live trading and how it compares to your testing results. If there is a big difference, then figure out why this is happening. 
• Record your physical and mental state when you are trading. You can do this in your journal as a qualitative entry, or you can use quantitative tools like Muse, a heart rate monitor, Apple Watch or NeuroTrader. Try to spot patterns in your readings that tell you when you should and should not be trading. 

I know that it's a lot to track. But if you are dedicated to becoming a successful trader, then you should leave no stone unturned. 

Take a look at what elite athletes do to train for their sport.

That will give you some clues as to what it will take to make it in trading. 

The “sport” is different, but mindset needed for success is the same. 

Step 5: Adjust Systematically 

Now that you have a process in place for tracking your progress, work on each step and don't move on until you have completed each step successfully. 

If you hit a point where something isn't working, then don't give up and jump to a new strategy.

Simply backtrack to the last step and try to figure out what changed when you moved on to the next step.  

You may have to experiment with a few different variations of your strategy before you find something that works. 

Trading is not easy. But if want the rewards, you have to be willing to put in the work. 

Final Thoughts 

So if you are ready to reboot your trading and start fresh, first take a few deep breaths. In fact, follow this video to learn a simple exercise for reducing stress and frustration. 

Now start at step 1 of this guide and work on each step until you complete it. 

I understand that it's much sexier to skip directly to trading. B

ut that's probably what got you to this point to begin with. 

Take your time, focus on the process and the results will come. 

The post The Trading Reboot Guide for the Frustrated Trader appeared first on Trading Heroes.

In most businesses, you can work harder or hire other people to make up for skills that you lack, in order to become successful.

But in trading, you run the whole show and everything depends on your skills and your trading psychology. 

On one hand, that is great because you are the boss. You have nobody else to answer to and you are in complete control of your destiny.

This also means that if you have a good trade in the morning, you can take the rest of the day off. You are not exchanging hours for dollars, like in a regular 9-5 job.

However, what if your boss (AKA you) is painfully indecisive and an all-around crap trader? He always seems to go long right before price drops and fails to take those trades that turn out to be big winners.

Well, I’m here to tell you that it’s not your fault.

So don’t lose faith in yourself.

The real culprit is the education system that we have been brought up in. This post will show you how the education system as we know it, has failed us.

Then I’ll show you what you need to do to overcome that programming and become the trader that you want to be.

The Antiquated Education Model

For centuries, schools have been structured in basically the same way. You go to school and you are forced to learn everything that your teachers teach you, regardless if you are interested in those subjects, or not.

When you ask why you need to learn these things, you are told that, if you want to become successful and happy in life, you need to get good grades and get a good job. 

It seems logical and everyone else seems to believe it, so we blindly go along with it.

Teachers and parents often talk about people who are successful and attribute that success to things like having good grades, going to the right college or being in the right profession.

So we learn that if we want to have the things we desire in life, we need to follow one of these pre-determined tracks. 

…and therein lies one of the biggest reasons why it is so hard to become a successful trader.  

For example, let's say that you want to own a big 5-bedroom house and drive a M3 BMW. So you look around and a lot of the people you see with a nice house and that car, are lawyers.

So you set your mind on becoming a lawyer.

However, many times, we forget to ask ourselves two important questions along the way:

• Would I enjoy being a lawyer for the rest of my life?
• Is there another (more enjoyable) way to get that house and that car?

You can probably relate to this, in one form or another. You have probably worked a job for 5 years (or more) before you realized that it sucks.

But you followed the formula, how could you have gone so wrong? Well, because you ignored the means and only focused on the ends.

How This Applies to Trading

When we want to learn to trade, most of us follow the same logic that we have been taught in school. We look for the first successful trader we can find.

Once we find this trader, we set our mind to learning her trading method because we have been taught to emulate success, without regard for how we get to that success. 

…and this is one of the biggest reasons why aspiring traders fail to become consistently profitable.

To find the solution to this problem, we have to rewire our thinking…

The You-Centric Education Model

What if you could do it over and your formal education started with YOU? What if your elementary school teachers took into account your interests, learning style and innate abilities…then taught you accordingly?

Your life would probably be totally different right now.

Even if you don't believe that this method would have worked out for the better, humor me for a minute.

Let’s flip the traditional education system on its head and take a look at what could happen if your schooling focusing on you first.

For starters, if you only studied the things that interested you, school would have probably been a lot more fun. You would have wanted to go to school, instead of ditching class to go to the movies.

When we enjoy something, we also tend to become experts at it. When you were a kid, where you an expert at something like dinosaurs…or cars?

I would venture to guess that the answer is probably yes. You were an expert because you genuinely loved that topic.

For example, I was an expert at baseball. I was terrible at playing it, but I loved watching it and knew almost everything about the game.

You are probably an expert at something right now, simply because you enjoy it.

So if you were brought up to enjoy what you are doing, then you would probably be really good at it and figured out a way to get that big house and that nice car with those skills.

Even if you didn't figure out a way to make a lot of money, you would be one hell of a lot happier!

How This Applies to Trading

Alright, now let's look at this education model in the trading world.

What if you first figure out where your trading interests and abilities lie, then pick the trading methods that are best suited to your individual personality and lifestyle? Well, for starters, you will be working with your strengths, instead of against them.

Then trading also becomes more enjoyable and dare I say it…*gasp*…even fun.

So before you sign up for that next trading course or attend another webinar, ask yourself:

• What is my Trading Timeframe Personality?
• How much time do I realistically have to commit to learning and trading every day?
• Am I more of a trend trader, reversal trader or breakout trader?

Of course, this will take a little time to figure out, just like when you were discovering your other interests in life.

But once you can answer these questions confidently, you exponentially increase your chances of being successful at trading.

I've experienced this myself and have heard it time and time again from other traders. They only started to see positive results when they worked with their personalities.

Conclusion

Even though your miseducation is not your fault, you are 100% responsible for what happens next.

…especially now that you now know how to fix it.

Remember to start by figuring out the answers to those three personality questions, then seek out training that is aligned with those traits. This will put you light years ahead of most people who are learning to trade and greatly increase your chances of success.

What do you think? Are you willing to try it? 

The post If Your Trading Sucks, It’s Not Your Fault. Here’s Why. appeared first on Trading Heroes.

This is something that has helped me a lot and I hope that it helps you too.

I have ADD-like tendencies and I'm fine with that because ADD isn't a real disease. It's just something the drug companies made up to sell more pills to irritated parents.

But it does mean that I tend to get distracted easily. Therefore, I need to be very conscious of removing distractions from my environment. Otherwise, I can easily go down a distraction rabbit hole that takes me 3 hours to climb back out of.

One distraction that I didn't even know was an issue was chart information overload.

In other words, I had too many colors on my charts.

In this post, will show you how I discovered black and white charts, how they have helped me, and I'll share the settings that I use. 

The Side-By-Side Comparison

I have seen people using black and white charts, and I wondered if it really helped to set them up that way.

So during a round of backtesting, I gave it a try.

It was actually pretty amazing. That sounds like an exaggeration, but it's not.

I was able to backtest about 5 years of data on the 30 minute chart, in one sitting. Normally, I would find myself quitting after one year of historical data.

So I sat down and asked myself why that was the case. I put the two charts side-by-side, like this:

First the old way…

Then I removed the colors…

Then I looked at each one and took an internal inventory of how I felt. I noticed that I feel much more calm when looking at the b/w chart.

How do you feel when you look at the green/red chart?

Perhaps a little more anxious or distracted?

For me, it was both.

Why Chart Colors Matter

As we all know, the candle colors are simply a way to represent price data….if the candle closed up or down. That might not seem like a big deal, at first.

But you may not be aware that those colors can also represent other things in your subconscious. This will be different for different people, depending on your natural tendencies and life experiences.

The colors may not affect you at all. 

However, if the colors do affect you, then this is extra information that your brain has to process every time you look at a chart. For example, you may subconsciously associate the following things to red and green:

• Red: danger, losing, blood, creepy clown noses
• Green: money, “go” on a traffic signal, growth, Lucky Charms

Marketers know this and have made a science out of it.

Those extra thoughts are swimming around in your head every time you want to place a trade and are eating up valuable brain processing power. If your associations are strong enough, they may also affect your trading.

An obvious example that comes to mind is: If you have a strong association between red and danger, then that may cause you to stay out of short trades (since falling candles are red).

At a very basic level, for a split second, your brain will ask the question…

Wait, what do red and green mean again?

…every time you look at a chart.

Why go through the extra stress?

If you use black/white candles, that communicates the same thing as colored candles, but without the extra baggage.

The bottom line is that I found myself less tired when I started using black and white charts.

So I changed all of my templates.

How to Get Rid of Unnecessary Chart Colors

Getting rid of the colors on your screen is not hard. But there are a few nuances that might help you.

Here's how to do it on the two most popular Forex charting platforms.

Metatrader

In Metatrader, if you right-click on any chart and select Properties, you will see all of your chart colors. Here is how I set mine up.

Notice that I also made the Foreground and Grid darker. I found that this also helped make my charts easier to use.

Yes, the last few items have color, but I don't use volume and stop level and I only turn on the ask line when the spread on a trade makes a big difference. Otherwise, I really like this setup and it allows me to just focus on the price action.

TradingView

The setup is similar on TradingView. Right-click a chart and select Properties.

Then there are two different tabs where you need to set the colors. The first tab is the Style tab. Here is what mine looks like:

You also have to setup the Background tab.

Obviously, you are free to customize it as you like. But this is a good starting point for setting up black and white charts.

One of the biggest things that you might disagree with me on is the background. Some traders find a white background easier to use and others (like me) prefer the black background.

For me, the main reason is that the dark chart gives off less light and cuts down on my eye strain if I am sitting in front of the screens for awhile.

You might also want to try using blue light blocking glasses when you are trading.

Final Thoughts on Black and White Charts

So give it a try and see what you think. It is one of those things that you may not have thought to try, but once you do, you will probably wonder how you did it the other way for so long.

Maybe you want to use blue and white charts because they make you feel good.

Do what works best for you. 

Also consider hiding your quote screen from view until you're are ready to trade. Those flashing colors are really distracting too.

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The post How Black and White Forex Charts Can Increase Trader Focus appeared first on Trading Heroes.

I'm paraphrasing here, but the student was basically saying that he sits down to trade and he gets lost in the charts and never ends up knowing what to trade and he feels helpless…

…in spite of the fact that he has done is backtesting and has profitable strategies at his disposal.

Yes, he knows what to do, but he still cannot execute a single trade!

At first you might think that he is just dumb, but I find that is very rarely the case.

Traders are a smart bunch.

So let's take a closer look at this situation.

We decided to skip this question for the recording, because we didn't quite understand what he was talking about.

You see, I intuitively understood what the student was talking about, but at them time, I couldn't quite articulate what he was feeling, or formulate a possible solution.

But the question stuck with me…

So I thought about it for awhile.

As someone who has felt this way before, I finally understand what was happening in my mind (and his).

If you have ever felt this way, then you will want to read this post because I do have a simple three-step solution. 

Whenever this happened to me, I was basically getting screwed by Buridan's Ass.

No, it wasn't a Donkey Show.

Here's what I mean…

What is Buridan's Ass?

In spite of the name, Buridan's Ass isn't an actual animal, but a philosophical principle.

Buridan's Ass is a hypothetical situation where a donkey is standing between a bale of hay and a trough of water. He is equally hungry and thirsty. The donkey cannot choose which to partake in first, and ends up dying of both hunger and thirst.

Sound familiar?

It's the paradox of free will. The donkey is free to choose either one, nobody has chained him. But because he is free to choose, indecision gets the best of him and he can't pick one.

This is obviously an overly dramatized situation, as much of philosophy is. However, it also illustrates a very real occurrence in trading.

You open your charts, see a ton of potential trades, but cannot execute a single trade because…

There is TOO MUCH opportunity. 

Therefore, you end up not taking any trades and make zero money. This leaves you frustrated and keeps you on the Trading Silodrome.

So what should you do about it?

Step 1 – Acknowledge That You Have a Problem

The first step is acknowledging that you do have a problem. Don't beat yourself up about it, don't judge it.

That only makes things worse. Just see it for what it is…and resolve to fix it.

Think of it this way…

If you are short, does it make sense to beat yourself up about not being able to reach the stuff on the top shelf of your kitchen. Of course not, just go get a step ladder.

Nothing you do will change your situation. So deal with it and move on.

It's like getting mad at a zebra for having stripes.

So if you are in this situation, identify that it is an issue and work on solving it. 

Step 2 – Severely Reduce Your Choices

Now that you are in problem solving mode, let's take a look at your biggest roadblock…too many choices. This is easy to fix.

Now I know what you are thinking…

But what if I miss out on a trade?

This is the root if of the problem, isn't it? Since you have given yourself too many choices, you have run into the paradox of choice.

So reduce your choices. 

Yes, FOMO (fear of missing out) will creep back into your psychology. This is a strong emotion that can take you back into your old habits.

When this happens, just remember the result of your old behavior. You sit there, flip through charts, stare at them…and nothing happens.

Remember how frustrated you were? Remember how helpless it feels?

Really engrain that in your mind. It feels like a brick wall, right?

Because it is.

If necessary, tie it to an extremely unpleasant experience in your life. It's not fun, but it will give you the motivation to move forward.

Let's say that you hate swimming in cold water. Think about falling into a frozen stream, every time you look for other trading setups. That is just one way to do it, but find what works for you.

Now, reduce your options. Start with one pair and use only one strategy.

This is what brought me to the 8 tests formula in backtesting. By taking one strategy and one pair, you can focus and start to get results.

Step 3 – Go to Work on That One Thing

From here, it is just good ol' fashioned hard work. This is something that most people aren't willing to do, but you aren't most people, right?!

For starters, remove any temptation to look at other pairs and timeframes. Just keep one chart open and look for your one setup.

If you are tempted to look for other setups, go back to step two and remember what happens when you do that. Work on testing your system, instead of trying to trade other methods.

Setup a schedule to work on your system. A good way to setup a schedule is to use an app like Way of Life. Only test that one setup on that one pair, until you are confident in it.

Conclusion

Yes, this is not easy. This is something that I still struggle with, but I'm getting better.

Remember, staring on charts all night won't do you any good. So if you ever sit down to trade and you don't know where to start, you probably just have to reduce your options.

If you are simply at a loss for trading methods, then these courses might help you out.

Happy Trading!

The post How to Get Buridan’s Ass (Indecision) to Stop Screwing with Your Forex Trading appeared first on Trading Heroes.

A silodrome is also known as a motordrome or more dramatically…the Wall…of Death.

It's a carnival sideshow that involves driving a motorized vehicle, usually a motorcycle, around the inside of a cylindrical structure.

Some performers take it to the next level and use a car.

Spectators watch from the top of the cylinder.

The vehicles drive around the bottom of the cylinder until they get enough speed to eventually climb the walls and drive perpendicular to the floor.

What does this have to do with trading?

Movement Does Not Always Equal Progress

Well, this is a perfect analogy for what I see a lot of traders doing.

They are on the Trading Silodrome.

The reason that silodrome riders are able to stay on the wall is because they are going fast enough that the centrifugal force holds them on the wall.

But no matter how fast they drive, they are still just going in circles.

In the context of trading, you may seem like you are making progress simply because you are busy.

I have certainly been in the Trading Silodrome myself, until I started to understand what I was doing and was able to ease myself off the wall.

In this post, I will share some specific ways to know if you are in the silodrome and how to get back on flat land, so you can actually make some trading progress.

I'm not saying that this understanding will make you instantly profitable.

But I hope that if you are in one of these loops, that this post will help you get out of the rut.

So before you are tempted to buy another course, put down your mouse and credit card for a minute.

Take a couple of minutes to read the three ways that you may just be running in circles and driving yourself up the wall.

…and how to get out of that vicious cycle, so you can finally start to make progress.

[toc]

“You have to walk before you can run.”

– Your Mom

1. Education Overdrive

We can mistakenly think that continually learning new techniques will eventually bring success.

So we spend money on new courses and join new trading communities as fast as we can find them, to learn the “secret” that seems to be eluding us.

The reality is that when we do this, we are just driving faster and moving higher up on the silodrome wall, not actually going anywhere.

You can literally spend a lifetime “learning” and not become a better trader.

So if you are constantly after the next new trading system and have already spent a ton of money but haven't placed a trade yet, you are in Education Overdrive.

Or if you “try” a trading system for 3 months, then just drop it and go searching for the next trading system, then you may also be in Education Overdrive.

Solutions to Education Overdrive

There is nothing wrong with seeking knowledge and getting properly educated.

In fact, I feel it's mandatory.

You can see our recommended education programs here.

The problem does not lie in the quantity of information, but the quality of its utilization.

That is just a complicated way of saying that it's not about what you know.

It's all about how you use it.

Do you have a process for improving your trading, or are you always shooting from the hip? 

So take the time to actually learn a trading method and backtest it. Then trade it in a demo account and really get to know the system before you even think about looking for something else.

Journal your trades.

Get input from traders you trust.

Remember that there are only two reasons why a trading system won't work (assuming you are trading correctly):

1. It really is a crap system with no positive expectancy that someone thought up while they were half-baked
2. The system doesn't work with your personality or lifestyle
3. You don't have the right psychology to trade the strategy correctly yet

Before you move on, figure out for sure if the system you are learning falls into one of those three categories.

Backtest the system (if possible) and/or forward test it in your demo account for at least 3 months.

Read this post and figure out your Trading Personality. When you understand your Trading Personality, it's much easier to find trading strategies that might work well for you.

This post will give you advanced trading psychology strategies to level-up your trading psychology.

Do your best to make friends with the system before you decide that you want something new.

If a system tests well, but it doesn't work well in live trading, then take the time to figure out why.

This will save you a lot of money because you aren't buying new courses all the time.

It will also make it much more likely that you become consistently profitable trader. 

2. Speed Tweaking

Another common mistake that I see is that traders want to constantly fiddle with a trading method before they even get a good feel for how it works.

The problem with this is that you are always trying to “optimize” the system based on your last trade (recency bias) or based on your own biases, which may or not be correct.

If you do this, don't have a solid trading strategy and by default are actually trading the SWAG system.

Take a minute to reflect on if you do this or not.

It is a natural tendency and you may not even realize you are doing it.

Solutions to Speed Tweaking

In a similar way, you can cure speed tweaking by just sitting down and trading a method exactly the way that is has been taught.

Stop messing with it all the time.

Guess what?

It may actually work as advertised!

Then again, it may not work.

But if you trade it exactly as it has been taught, this will actually give you the best clues as to what you can tweak in the system to make it work better later, or if you should just throw the whole thing out.

Get some baseline data before you make changes.

Keep a trading journal and figure out when you are making your own “improvements” to the system.

Remember that changing your system all the time is like adding random ingredients to your dinner recipe.

They will both leave you with a bad taste in your mouth.

3. Bullshit Quick Draw

Some people love to be the first to call bullshit on trading strategies, traders and everything else.

They are riding their silodrome motorcycle backwards, with a blindfold, no hands and at the very top of the wall.

They think they know better than everyone else.

But the fact still remains that they are going in circles.

If you have the tendency to immediately think that something won't work, then guess what?

You will always be right because you will give up long before you ever find out the truth about a trading method.

Solutions to Bullshit Quick Draw

If you call bullshit all the time, you simply have to ask yourself, do you want to be right or do you want to be profitable?

It's really easy to be right. 

Just say that nothing works and you will always be correct.

It will never work for YOU…because you won't let it.

Being profitable is whole different story.

That's actually a little scary.

There is a chance that you may fail.

…and you have to actually put in some work.

That being said, if you want to continue to be right, then keep doing what you are doing. You are already getting what you want out of trading.

You don't actually need to make money.

However, if you want to move towards being profitable, then keep an open mind whenever you learn a trading system. 

I'm not saying to believe everything you read.

But be willing to figure out if a system really doesn't work before you call bullshit.

Otherwise, you are punching your ticket to ride on the trading silodrome.

Final Thoughts on the Trading Silodrome

So if you aren't consistently profitable yet, you might be on the Trading Silodrome. 

If so, then figure out what kind of speed freak you are.

Maybe your education is stuck in overdrive or you make unnecessary tweaks or you are masking your insecurities by calling everything bullshit.

Whatever the case may be, careful reflection and maybe even some meditation can be just what to need to get some proper perspective.

Also take some time to review this post on Advanced Trading Psychology.

Your mental gremlins may not be what you think they are.  

If you want to see actual silodrome videos, go here.

How else do you see your “friends” going in circles when it comes to learning trading?  Let us know in the comments below.

The post 3 Ways the Trading Silodrome is Killing Your Profits appeared first on Trading Heroes.

The storm's a-comin'.

…or maybe it has already hit you.

It can be disorienting, disheartening and even depressing. I wish that I was being a drama queen but unfortunately I'm not.

If you have already gone through this, you already know what I'm talking about. If you haven't, I want to prepare you for it.

Either way, this post will help you deal with people who want to smash your trading dream into a million pieces.

You might think that the people who are closest to you will always be your biggest supporters. But the opposite can be true and often is…when it comes to trading.

In all fairness, these people usually have your best interest at heart.

So what can you do? 

We will explore steps that you can take to reduce or eliminate the effect that these people have on you. Since protecting your mental capital (trading psychology) is just as important as protecting your monetary capital, it is vital for you to figure out how to stay as focused and positive as possible.

So if you are wondering what to do about people who are always bashing your dream of becoming a Forex trader, here are some honest and actionable things you can do.

Have a Heart-To-Heart Talk

The best place to start is to just have an open and honest talk about what trading means to you and asking the naysayer to be a little more supportive of your dream. If you get your feelings out there, then you may be able to hash out some possible misunderstandings and clear the air fairly easily.

But don't do all the talking.

Listen too. 

Ask them why they are so against it. Many times there are perfectly valid reasons.

They will usually think that it's dangerous, or it's not a real job, or they just don't understand it.

Do your best to understand where they are coming from. Many times, they simply don't want to see you get hurt.

Talk about how trading can possibly provide you with a better future, help you get out of that job you hate or just give you more options in life.

If that doesn't work and they seem pretty set on their negative stance then here's what you can do next…

Don't Bring It Up Around Them

As passionate as you are about trading, one way to avoid confrontations around the subject is to just avoid the topic all together. You obviously associate with these people for reasons besides trading, so if you still want to hang out with them, find other things to talk about.

Even though they are a close friend or family member, it doesn't mean that you have to talk about everything with them. Keep your trading aspirations to yourself and you might both be happier for it.

If they ask you why you never bring it up, just be honest with them. Tell them that it isn't a topic that you both agree on, and you value their friendship, so you think that it is just better if you don't discuss it.

How to Get Your Partner Involved

There may be situations where you have no choice however. For example, if the person that doesn't support you is your partner. You live with them and you should obviously discuss all financial matters with them.

But what can you do if they are really against you trading?

I haven't run into this situation personally, but I have heard a few great solutions over the years. Jessica Peletier mentioned in episode #2 of The Trading Lifestyle Podcast that her solution was to just keep talking about it until her husband was comfortable with the fact that trading involves both gains and losses.

This may take a little strategic thinking to ease your spouse into this, but it can be helpful. Don't lie to them obviously, but get them comfortable with the process first.

Also let them know what's going on, so they aren't worried.

If there is an analogy to trading that they might understand better, then try leading with that.

Using an Analogy to Trading

For example, trading could be compared to running a bakery. Some days you will do well and sell all of your muffins.

Other days, you might lose money because you only sold a small portion of your muffins. Just like in trading, there are winning days and losing days.

If you took out a business loan to start the bakery, that is like trading on margin because you are borrowing other peoples money to invest in the business.

In both trading and running a bakery, you have to figure out your system (or muffin recipe), manage the risk (don't bake too much, lease bakery space you can afford, etc.) and take the time to learn the trade.

Anyway, you get the point.

Use an analogy that your partner would understand.

Don't get me wrong, I'm not calling your spouse or partner dumb. Trading is just one of those things that very few people know anything about.

Just because you and I know something about it, that doesn't mean that others do. Not taking this into account can lead to major misunderstandings.

…and nights on the couch.

I also think that it is helpful to show your partner examples of people who are successful traders. This can go a long way to expanding their comfort level and awareness.

Set Risk Limits

Another method that I've heard about is to agree with your partner on an amount of money that would be worth risking in your trading account. Some traders have even gone so far as agreeing to give up trading completely if they blow out their account.

Hopefully it doesn't come to that, but it may be required, in certain circumstances.

When pitching trading real money to your partner, keep the money at risk as low as possible. When your partner knows exactly how much is at risk, they are more likely to let you do it because they are comfortable with what is at stake.

Then do your part and stick to your end of the deal, don't risk more than the agreed upon amount.

I would suggest starting with Oanda (if you can, in your country) for as little as $100. Actually, you can start with much less, but I feel that is the minimum amount to be “properly capitalized” for learning.

You can trade for a penny a pip (or less) and still only risk 1% on each trade because Oanda allows you to trade nano lots.

For example, if you have a $100 account, you could risk 1% per trade ($1 total risk) and still have a 100 pip stop loss if you trade for a penny a pip.

Nano lots also allow you trade much smaller lot sizes so you can trade for even less than a penny a pip, if you want to risk less or need a bigger stop loss.

Yes, you won't get rich, but that's not the point right now. You need to learn, and not lose a lot of money doing it. 

…and not piss off your partner either

Also be sure to demo trade and backtest so you have results to show before you actually risk any real money. If you can show positive results and dedication to your craft, even when real money isn't on the line, that will make your case much stronger.

If all that fails, you can always resort to sexual favors.

Just joking.

Kinda.

Now let's talk about people who are not your partner and what you can do to limit their negative influence on your trading.

Reduce or Eliminate Your Contact With Them

This is more for your friends or family members that you don't live with. But, there may come a point where you simply need to cut down on the time that you spend with some people, if they are having a big negative effect on you reaching your goals.

If you already tried avoiding the subject and it didn't work, then you may have to take more drastic measures. 

It may seem like a harsh thing to do at first and I'm not suggesting that you do this on a whim. Our personal relationships are our most valuable resource, so consider carefully.

But do you really need some of these people in your life if they are that much of a downer?

Maybe.

Maybe not.

You could try avoiding them for a little while and see what happens.

Are you happier overall? Is your trading better?

If the person who is always trying to squash your dream is someone you live with or a spouse or partner and you have already tried all of the above and there is no compromise, then you have a tough decision to make.

Do you make them happy and quit or continue to work towards your dream without them? Only you can answer that question.

Time to put on your big boy/girl pants and decide what is really more important to you.

Be totally honest with yourself and the other person. I personally couldn't be with someone who didn't support my trading goals, but that's just me.

Make New Friends

“You are the average of the five people that you hang out with the most” – Jim Rohn

This really is true. I'm not saying that you should be a snob and only hang out with people so you can get something out of them.

Assuming that you have sorted out the above or are actively working on it, then think about how you can expand your circle of friends that will support you in your trading. When you want to do something, isn't it easier when you have people who are doing the same thing and have the same goals?

For example, I love surfing and I hang out with some of my friends because they like to go surfing. I don't want to be a pro surfer, so I don't hang out with competitive surfers. I like to travel, have a good session and get a cold beer and some good food afterwards.

So those are the surfers I hang out with.

In a similar way, if you want to trade for a living, you should hang out with people who have similar goals or are already professional traders.

That was one of my reasons for starting this blog, a Facebook group and the podcast.

…and it has paid huge dividends.

So figure out how you can make more friends who have similar goals or even better, are already doing what you want to do. This can mean all the difference in the world when it comes to reaching your goals and can help balance out the negative influences in your life.

But Wait…Maybe They Are Right!

Huh? Isn't this supposed to be an inspirational, pro trading, feel good post?

No, I'm not here to blow sunshine up your ass.

This is a practical, actionable and honest post.

So in all fairness, I have to concede that not everyone is cut out to be a trader. My Mom for example, has a very black and white view of the world and wouldn't have the flexibility to adapt to constantly changing market conditions.

…and there is nothing wrong with that.

This is what makes her much better suited to be a school teacher.

That's not to say that she couldn't be a good trader if she put her mind to it and became more flexible.

I sincerely believe that anyone who is of able mind and spirit can become a profitable trader if they truly dedicate themselves to that goal.

When I say that people might be right that you shouldn't become a trader, I'm simply asking your to consider the fact that maybe you would be happier doing something else.

Maybe you don't actually enjoy trading. You might even hate it.

If that is the case, you may be happier and way more profitable doing something that you actually give a shit about instead of learning trading because some guy on the internet (ahem) said that you can make a ton of money at home, in your underwear.

Also be fair to people around you who are counting on you for financial support. Do not quit your job to become a trader if you have not proven yourself yet, that is just irresponsible.

If you really hate your job, consider switching jobs to something that gives you more free time or trading on higher time frames so you don't have to watch the market as much. There are always options.

How Do You Know if Trading is Really For You?

Simply decide.

Yes, it really is that simple. Notice the difference, I said simple, not easy.

If you really want this, just commit. If you don't, then go do something else.

It could take just a few years, like in the case of Chris Capre, or it could take a decade, like with Walter Peters.

But if you are truly dedicated, then you will do what it takes. You will put in the time testing, have the tough talks with people close to you and get properly educated.

What are You Going to Do About It Right Now?!

Anthony Robbins has a great rule that he never leaves the scene of a decision without doing one thing, no matter now small, to move towards his goal.

So I ask you, what can you do right now to minimize the negative effect that people close to you are having?

You can call someone and setup a lunch to sit down and talk with them, cancel a meetup with someone who is always talking bad about your trading or do an online search for other traders to talk to.

Whatever it is for you, do it now!

The post How to Deal With People Who Want to Kill Your Trading Dream appeared first on Trading Heroes.

When you first get into trading, it starts off as a mix of internet Porsche shopping, rose colored glasses and pure adrenaline.   All you have to do is learn a couple of sold techniques and you will be rich, right?

…or at least be able to pay a few bills.  Unfortunately there is a lot more to it than that.

Scammy Forex marketing doesn't help either.  The US government has cracked down on a lot of that, but there are still a lot of marketers who promise the moon with…no ability to deliver.

So how does it really work?  Well from personal experience and from talking to others who have gone through the same process, it really is a lot of trial and error.

You have to try many different trading systems and you might even have to trade several different markets.

That is not something that people want to hear.  Some people are lucky and they find a trading method that works well with their personality and a market that they like right from the beginning.  Others (like me) have to struggle through it for many years.  I am not where I want to be yet, but I get better all the time and I'm so much better than when I first started.

Look at professional independent trader Walter Peters.  When I interviewed him for the podcast, he told me that it took him 4 years to become consistently profitable. Most people just don't want to hear that.

How I Found Forex (A Love Story)

I personally started trading the stock market during the dot com bubble in the late 1990's.  I was probably the only person to lose money before the crash.  Since that time, I have traded futures, options, ETFs, Forex and I worked at a bond arbitrage hedge fund.

The reasons that I finally settled on forex as my primary market is because I like the liquidity, affordable testing data/software, 24 hour access and very low trading costs.  And I love it.  That is the only reason that I can continue to to maintain this blog with over 900 posts and keep taking trades, even after I have had to endure a few bad trades.

But guess what?  I had to go through all those other markets first.

In the same way, learning trading styles that work for me has been a process of of trial and error.  It is still a work in progress and will never be complete.

That is half the fun though.  Never retire…I say.

So try different trading methods.  Even try different markets.

I think Forex is the best market to trade, but that is because it fits with my personality.  But I will also trade some stocks and ETFs here and there.  I would like to learn how to use options to hedge my currency positions.

The Paradox Of Trading

But guess what happens after you learn to trade one market well?  Generally, that skill is applicable to other trading markets.  As Rafael says: Trading is trading.  It doesn't matter if you are trading stocks, options, Forex or horses.

So if you have been focused on Forex for a long time and you are frustrated or feel bored or stuck, then try something new.  Of course, do not risk a lot of money doing it.  If you do not have money that you can risk, just paper trade a market for a few months.

It might open your eyes to a market that you like trading better.  Or you it might give you renewed vigor for trading Forex because you can appreciate it that much more.

Whatever the case may be, never rule out a possibility unless you have given it an honest shot.  But once you find a market and a trading style that you are sure that you want to trade, stick to it and master it!

It will take time and a lot of effort, but it is worth it.  This is a marathon, not a sprint.

Trade well.

The post One Thing You Do Not Want To Hear About Learning To Trade appeared first on Trading Heroes.

“There's no such thing as a natural born pilot.”
-Chuck Yeager

Charles “Chuck” Yeager is an American icon. He started his military career as a mechanic. But in September 1942, he entered the pilot training program and became a fighter pilot, flying P-51 Mustangs during World War II. After the war, he became a test pilot, and on October 14, 1947, he became the first man to officially fly faster than the speed of sound.

He later commanded fighter squadrons during the Vietnam War and was featured in The Right Stuff, a book that was turned into a movie, in 1983. He retired from the Air Force as a Brigadier General in 1975.

The point is that Chuck Yeager knew a thing or two about flying. Why am I talking about an Air Force pilot on a trading blog? Because every time I talk to someone who thinks that trading is something they can just “pick up” in a month or two, and start making money right away, I always think of this quote from Mr. Yeager.

There's No Such Thing As A Natural Born Trader

Just like there are no natural fighter pilots, I believe that there are no natural born traders. Sure, some people may be a little better than others in the beginning, but it still takes hard work to become consistently profitable. Early success is often blind luck and gives aspiring traders a false perception of innate talent.

I have never been in a fighter jet, much less flown one. The closest I have gotten is taking the wheel of a single engine plane over Los Angeles, for about 10 minutes.

But I can imagine that doing the right thing in a dogfight can many times go against every single human instinct, just like doing the right thing in a bad trade. How else are they similar?

Here is how I see it…

You Have To Overcome Fear

One of the biggest obstacles to profitable trading is fear. You might be afraid to put on a trade, for the fear of losing money. Then when you do put on a trade and it is profitable, then there is the fear of losing your profits. There is also the fear of losing your entire account (when you over trade).

Just getting into a jet fighter requires overcoming many fears in itself. Then you have to fly directly at other jets who are trying to shoot you down with heat seeking missiles? Not for me, but I'm grateful that some people are able to overcome their fears and do it.

Success in both these endeavors depends on training yourself to do the right thing when you are in a stressful situation. Luckily, trading can be much less stressful than flying a fighter jet, if you get educated. But when you are in a bad trade with too big of a position size, it can feel like a squadron of enemy planes are out to get you. Our natural reaction is to run from fear, but these to activities require that we stand up and face it.

You Have To Know When To Pull The Trigger

If you want to stay alive in a dogfight, you need to be well trained and take controlled risks. When you see your shot, you have to take it. When there is no shot, you need to save your ammunition.

The same thing goes for trading. When you see a setup that you know has a good chance of working, you have to place the trade. If it has a much better than average chance of working, you have to take advantage of the situation and trade a bigger size. If there is no trade, you have to preserve your capital and live to trade another day.

The natural instinct of most people would be to keep firing until they hit something. Which usually results in them hitting nothing and being out of ammo or money. Only the trained pilot or trader knows when it is a good time to take the shot and when to hang back.

You Have To Be At The Top Of Your Game

Do you think that they are going to let someone with terrible eyesight and slow reflexes fly a multi-million dollar fighter jet flying at 1,500 mph? No way.

Pilots need to be in peak physical and mental health to operate these complex and dangerous machines.

In a similar way, trading requires that you are at the top of your game, both mentally and physically. Yes, physically. If you are not in good shape, you will get tired and lose focus when trading.

You have to have confidence in your trading methods and be alert enough to execute them properly.

…and you have to be aware of when you should take a break and not chase bad trades.

Not staying on top of your game can cause your trading account to crash and burn.

Most people do not understand that trading takes intense training and concentration. They think that they just have to click a few buttons and money will appear in their account.

Conclusion

Being a fighter pilot or a trader takes a lot of training and discipline. Nobody is naturally good at them because they go against a lot of our basic human instincts.

So if you think that Forex trading is something that you can learn in a weekend and start making money consistently next week, you have another thing coming.

You won't be a fighter pilot in the Air Force by using a simulator on your computer and you sure as hell won't be a consistently profitable Forex trader by watching some videos on YouTube. However, if you want to make guaranteed extra income to pay some bills, I have just the thing for you.

It's called a second job.

Think about how you make a living now. Did you learn that overnight? Chances are, you went to 2-4 years of college or some sort of trade school to learn that skill.

What makes you think trading is any different?

Being a fighter pilot or a currency trader can sound pretty damn sexy.

But it isn't as glamorous as they make it out to be in the movies…

It takes work. A lot of work.

What do you think?  Are there natural born traders?  Let us know in the comments below.

The post There’s No Such Thing as a Natural Born Pilot (or trader) appeared first on Trading Heroes.

How long have you been “studying” Forex trading?

But how many demo trades have you placed?

If you have not placed a single demo trade yet and you have been studying for more than a week, then stop what you are doing right now and read this post.  I love getting emails from readers, but one of my biggest frustrations is how some people study for months and still have not placed as single demo trade.

I'm not saying that you should start trading with real money right away, in fact I strongly advise against it. But you should at least open a free demo account and start trading with play money.

I actually advise you open a demo account before you really even start learning anything.

Why?

In this post, I will go over why opening a demo account as soon as you can will help you actually progress and prevent you from being stuck in “learning mode” forever.

Placing a DemoTrade Will Answer These Questions

What is a Pip?

I could give you the academic answer, but that wouldn't do you any good.  You can just place a demo trade and see how much play money you win or lose when the price of a currency pair fluctuates.

See the column that shows the number of pips gained and lost on your demo trade?  Divide that by the dollar amount that you are up or down.  That is your cost per pip.

Trust me, that is all you need to know.  Please do not make it more complicated than that.

How Does Margin Work?

When you place a trade, you should be able to see how much margin you used.  By doing some simple calculations, you should be able to figure out how much you can trade and still stay within your margin limits.

The bottom line is that if you are worrying about margin limits, you are probably trading too big or over trading.  It is really hard to communicate this to anyone who has never actually placed a trade before.

How Much Money do I Need to Trade for a Living?

Just take a look at the balance in your demo account after six months.  That will tell you what you need to trade for a living.  If you are asking this question, then you don't need money…you need experience.

Go get some by trading a demo account. Then you can think about trading from the beach.

Which Broker Should I Use?

Read the reviews online and try out demo accounts with these brokers.  This is the only way to get a good feel for their platform and their service.

If you have done your research for demo accounts, then you probably know about their live accounts too. This will help you make and educated decision when/if it is time to open a real account.

How Do I Know Which Trading Systems Really Work?

Trade it in a demo account and forward test it. If possible, back test it too.

Yes, that is the only way.

You need to find out if the system not only works, but it works with your personality. Two people can trade the exact same system and get totally different results.

It all comes down to having a system that works for the individual trader.

The Bottom Line

When it comes down to it, placing demo trades will teach you more about the mechanics of Forex trading, in a shorter amount of time, than any book.

Don't understand something? Look it up.

That will give you a practical education…information that you actually need, instead of studying the Gross Domestic Product of France for two weeks, which you will probably never use.

It doesn't matter what trading system you use. Just place some trades…it's play money anyway.

Broker Research

I believe in just getting started because you will never know what you really don't know, until you don't know it.  So open a demo account now, it is free and it is not real money. Check out this handy chart from the folks at FXStreet, for finding the best demo broker.

It is mostly for US clients, but it gives you a good list of things to look for in a demo account. Can you guess who I trade with and why?

Don't get me wrong, I believe in getting as much education as possible. But a demo account is the right kind of education.

You can…

• Blow it out as many times as you want.
• Make all the mistakes you want.
• Start all over.

You have no more excuses, stop studying and do it now.

If you are not willing to do that, then guess what? You might not have what it takes to become a trader. I sincerely believe that trading is one of the best independent career opportunities in the world. I also believe that anyone who really puts their mind to it can do it.

However, I also know that the majority of people in the world do not have what it takes to become a trader. Since you found this tiny blog, then you are probably one of the select few has a good shot at making it.

Go open that demo account now.

Did you learn a lot more after you opened a demo account? What were the biggest lessons? Let us know in the comments below.

The post Stop Studying and Place a Trade Already appeared first on Trading Heroes.

“Be wary of any enterprise that requires new clothes.”
– Henry David Thoreau

If you have heard of minimalism before, then you probably Google-d it at one point and found a few blogs where people own 41 material possessions and pride themselves on taking a picture of every single thing and posting it on their website.

But that's just one extreme.  The truth is that just like anything else, there are varying degrees.  Provided you are practicing in a way that suits you, there is no right or wrong way to do it.

My goal in this post is not to convert you into a minimalist.

I only want to introduce you to the idea that it may be something that you can experiment with in your trading.  It was a real eye opener for me, both personally and trading wise, and I wholeheartedly believe that no matter where you sit on the “stuff scale” between owning 19 things and being a hoarder, there is always room…for creating more room.

Not so that you can fill it with more stuff.  But so you can breathe easier and truly enjoy what you have.

My Experience

I grew up being around a lot of stuff.

We were not rich, far from it actually.

But my parents have the mentality that they need to save every single thing because they might need it later.

There is nothing wrong with that, it is just their way of seeing the world.

My point is that I adopted the same mentality from an early age.

I would save everything I could until I had no room to store it all.

Naturally, that carried over into my trading.

I had so many indicators on my chart, that I kept missing trade setups.

But I slowly realized that this had to change.

At first, I got rid of a couple of things in my life that I knew were not working.

Then slowly I got rid of more things.

I am now downright ruthless when it comes to getting rid of things that I do not need.

But I absolutely love the things I do have. 

For me, the primary value of adopting a minimalistic mindset, at least for a period of time, is to just clean the slate completely.

Then you are free to add back in only things that work.

My trading has followed a similar evolution.

Here are five ways that applying minimalism to your trading might be able to help you too.

1. Start Fresh

Above all else, I believe that becoming more minimalist in your trading forces you to strip it all down and start from almost zero.

This will help you see things from a new perspective and question every single indicator, news event and setup that you are currently watching.

Only after you do this, can you add things back in because they are really needed.

Not just because you have been using them for so long.

2. Find Focus

Having fewer indicators and things to watch will help you focus on trading a few things well, instead of flipping through tons of charts and time frames like people flip through TV stations.

Sometimes, we don't realize that we are watching so many different things until we stop watching them.

3. Get New Ideas

Now that you have dropped some of the things that are not working for you, now you have more space to explore other ideas that might be more profitable than what you are trading now.

Examine each idea for awhile and see if you like it or not.

If not, then drop it and move on to the next new idea.

4. It Carries Over to Your Personal Life

If you apply minimalism to your trading and you start to see positive results, there is a good chance that you will start to find ways to use it in your personal life also.

For me, it happened the other way around, but which ever way you choose to try it, give it a chance for 30 days and see what happens.

The experiment could improve your life as a whole.

5. Make Trading Fun Again

Having less trading clutter can help you trade better and give you more clarity.

When this happens, you usually start winning more, trading becomes more fun and a lot less stressful.

Resources

Wondering where to get started?

Here is a short list of resources that can get you on your way.

• The Trading Lifestyle Podcast, Episode #8 – How Lynette Allen Combines Minimalism, Line Charts And Only One Currency Pair To Trade For A Living
• Mnmlist – Zen Habits author Leo Babauta writes about being minimal, on the most minimal blog design ever.
• The Minimalists – One of the biggest minimalist blogs out there.

Conclusion

“Have nothing in your houses that you do not know to be useful, or believe to be beautiful.” – William Morris

One first places that you can start cutting back on the unnecessary clutter is on your trading desk.

Do you really need eight screens?

Maybe, but what if you could do just as well with less?

Check out these private trading desks from around the world.

I think you will find that many of them are pretty simple and tidy.

Regardless of what you think of minimalism, I would recommend you give it a try as a way to become a better trader.

It might not work for you or it might be the best thing you have ever done.

All I know is that it has not only helped me become a better trader, but a happier person.

The post 5 Ways That Minimalism Can Jumpstart Your Trading appeared first on Trading Heroes.

More often than not, it is because they have not taken the time to figure out what gremlins are running around in their own head.  They blame their system, they blame the broker, they blame their dog.

If someone sticks with trading long enough, they usually figure out that the key is psychology.  But why does it take that long to figure it out?

Here are three reasons why I believe that trading psychology is not seen as very sexy or important.

It's Not As Easy To Quantify As Trade Setups

If you teach someone a to enter a trade when the moving averages cross over, then that is pretty damn simple.  But helping someone figure out why they chicken out every time those moving averages cross…infinitely more difficult.

Every person on this earth is unique, with their own psychological makeup and history.  Solving that puzzle takes time and work from the trader.  Sometimes the trader does not want to solve those issues.

It's The Hardest Part Of Trading

Let's face it, mastering your trading psychology is one of the hardest things in the world.  There are very, very deeply rooted forces at work when it comes to money.

What did your parents teach you about money?  Do you think money is bad?  Do you think that you don't deserve money?

As we mentioned above figuring out your psychology isn't as simple as telling you to enter a trade on a moving average crossover.  You need to be truthful with yourself and be able to face your fears and natural tendencies.

Fear, greed and indecision are a bitch.  Make your psychology a priority and the rest will come easier.

There Aren't Nearly As Many Books Written On The Subject

Out of curiosity, I did a quick search on Amazon one day.  When I searched for “trading psychology” this is what I got:

Notice that there are only 1,666 results for books that talk about the psychology of trading.  Is that a lot?  Let's see…

Then I did a search for “trading systems” and here is a screenshot of the results:

Since there are about 17.8 times the number of books dealing with trading systems, there isn't nearly the same mass of material out there about mastering what is between your ears.  If there were more books out there, people may pay more attention to psychology.

…or not.  The reality of it is that if people don't buy trading psychology books, then publishers won't want to publish them.  It just becomes one big negative feedback loop.

But the fact still remains, since there isn't a ton of material out there on it and therefore it doesn't seem as attractive.

Why Trading Psychology Is Sexy

I actually got into trading because of the psychology.  I found it extremely fascinating to learn about how people act in herds and why I do the things I do.

And if nothing else, making money trading is very sexy.  If psychology leads to successful trading, then it is sexy by association.

What have you done to overcome your negative trading psychology?  Let me know in the comments below…

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Photo:  h.koppdelaney

The post 3 Reasons Why Trading Psychology Isn’t Sexy (and why it is) appeared first on Trading Heroes.