In this video:
00:24 The psychology behind trading
01:48 Understanding what’s happening in the market
03:58 Trading knowledge posted for free at Forex Peace Army
06:07 Setting of rules and a structure for successful trading
07:08 Made 3.7 Reward:Risk on a one hour chart trade
Do you have the right mind set to be a successful Forex Trader?
Do you have the right mind set to be a successful Forex Trader? Let me show more details with you right now.
Hi it’s Andrew Mitchem here the Forex Trading Coach and today I want to talk about having the correct mind set in order to be a successful Forex Trader. You see the whole psychology behind trading is something that’s almost like a bit of a dull subject, it’s not that particularly interesting and it’s the part of any strategy or any course and eBook that people to skip over because you want to get the nitty gritty, you want to get to the actual strategy itself. But I’m here to tell you that there are so many people that I get emails from, phone correspondents, have Skype conversations with or have met in person that really are not the right sort people who should be trading and it’s important for you to understand that you need to have the right mind set in order to be a successful Forex Trader.
I want to share to you some examples of what you do need in order to be a good trader. It’s not for everybody regardless of how fantastic a market it is and all the lifestyle benefits and the passive income benefits that Forex Trading offers, it really is not for everybody. So you need to be sure that this is the right thing.
Do you have a Passion for trading Forex?
Number one I suppose you also need to have a passion for it. You really need to be excited by Forex Trading what’s going on at the charts here behind me. It’s going to be something that you’re really interested in. When it’s the weekends I can’t trade and I almost upset that I can’t trade. Most people when it gets to weekend you know they’re all fantastic, you know it’s Friday night, no more work for two days. For me it’s the opposite because I love trading. It’s the same at the beginning of the week, you know I’m really buzzing; I’m really excited again because I can get back into trading again.
So you got to be passionate about it and understand what’s happening in the markets and what the charts are telling you and have a real interest in it because that’s number one importance but when it comes to the mind set you got to be consistent person. You can’t be erratic jumping from different charts, at different charts trading different times of the day, different timeframes. You know there are so many people that will say to me, “Hi Andrew, what would be the benefit of adding an ABC indicator to your system?” I say, “You don’t need to, you know don’t reinvent the wheel.”
So many people find with any strategy that all of a sudden if it doesn’t work for one or two trades or one or two days then they’ll start optimizing it. They’ll then start adding another indicator or another something to that strategy to try and change it because you have to think as an investor. Don’t forget, that good Forex Trading is not a get rich quick scheme, it really isn’t. If that’s your mind set if you think that you’re going to want it double your account every couple of months, don’t trade Forex. Well certainly don’t ask me to help to teach you because I don’t want that sort of person as a client. Because I know the end result is almost certainly failure. Sorry to be blunt but if you’re the sort of person that says “I only got $500 and therefore I need to trade at like three standard lots per trade because I need to make more money” you’re the wrong sort of person. You shouldn’t be doing it.
Think of your trading as an Investment
You need to treat trading as an investment. You cannot get emotional with trades. You know, naturally everybody sort gets down when they have a few losing trades and they will get high and emotional when they a few winning trades. That’s natural; nothing wrong with that but you have to accept that you need to look at your trading over a longer term. Don’t worry about having a couple of trades or a couple of days that are losing. It’s just part of trading; it’s just part of the whole business that you’re in.
Free Analysis given out each day on this site and on Forex Peace Army
It’s amazing, see I write on Forex Peace Army for free, every single trading day for free. Give my time; give knowledge, my ten years of trading knowledge for free. Don’t charge just cent for it. Yet still some people will moan if I’ve had a one or two trades that going the wrong direction, as if I can control the market you know I can only say what I see at that time. When the trade goes like the direction goes against me then either one or two things. Either one I lose or two I don’t take any trades because let’s say I’m looking for buy trades on the EUR/USD for the next 24 hours and it goes down. Well therefore I don’t see any good buy trades, I don’t take any trades. Either that or I might change my opinion midway through the day and look for short positions. Whatever it is I’m there giving information for free on Forex Peace Army and people moan about it and it’s like well if you don’t like it don’t read it, simple as that. You know all I can do is offer what I see, offer my help my knowledge, my guidance for people and I’m making a call of what I see in real time and ahead of the market making those moves. You never see me say,” I would have done this or I could have done that, I should have done that.” It’s always putting my mouth where my money is. I’m placing my suggestions putting my name to those ahead of time taking all the trades that I suggest to my clients in real time and I’m taking them with my own money.
Sure I get it wrong from time to time so does everybody you know no one’s perfect. It’s not a perfect market. You can only trade what you see at that time and so have the right mindset with your trading. Always try to trade at the same times of the day if you can, trade the timeframe of chart that suits you, ever trade just the currency pairs that suits you. You don’t need to look through all the pair that doesn’t suit you. Have some rules that suit you, have some strict money management policies and stick with those. Don’t suddenly go look at I’m only trading four hour charts because that’s what I like but nothing is showing so now I’m going and look at five minute charts. Don’t do that, you know that’s not how you’d run a business. In a business you’d had a set of rules and a structure and you stick to it. That’s what you need to do in order to be a successful business owner and that’s what you need to do to be a successful Forex trader. So I hope that helps. Try to keep the emotions out of your trading. Look at your trading as a longer term venture. Don’t treat it as a get rich quick scheme, I can promise you it will not work.
Some great Trades This Week
So that’s it for the actual subject that I wanted to talk about on today’s video and as of the trades themselves well yesterday being Thursday I had probably one of the very better days on the shorter time frame charts that I have for a long time. As I recap here yesterday I took seven trades on the one hour charts and I made profit on five of those that hit my full profit target. One of those trades had 3.7 to 1 risk to reward so if I was risking 1% of my account on that particular trade I made +3.7%. I only risk a quarter to a half of 1% but you can see a 3.7 risk to reward trade, it’s just a great trade to have on a one hour chart.
On a four hour charts I took five trades full profit on 3 they averaged to 1.6 to 1 risk to reward and I took eleven trades on the daily charts and ten of them hit profit, not all hit full profit but eight of them did and the other two, well I've still got one in and the other one I closed manually, one lost. But still a tremendous day on all time frames. Now I always trade daily time frames myself, I always trade four hourly charts and on a Tuesday to a Friday I like to look at the one hour charts because that’s what suits me so I do that all the time and it’s coming back to that consistency again. Have strict money management, strict time to days that you trade, a strict trade management. If you like set and forget, do set and forget, if you like to move your stop to close spot positions do that on all of your trades. It helps control the emotions in your trading.