PSYCHOLOGY

S.K TRADING

TRADING
PYSCHOLOGY

2024
"Consistency is More Important than
Perfection”

PSYCHOLOGY STEVEN SALEH

 PSYCHOLOGY

TABLE OF CONTENT

COVER PAGE……………………………………………………………………………………….………………………………….………….01

TABLE OF CONTENT…………………………………………………………………………………………………..…………………......02

INTRODUCTION TO TRADING PSYCHOLOGY……………………………………..………………..…..…………………….....03

WHAT IS TRADING PSYCHOLOGY

BENEFIT OF TRADING PSYCHOLOGY

KEY ASPECT OF TRADING PSYCHOLOGY …………………………………………………………….…………………….….…04

FEAR AND GREEDY

DISPLINE
EMOTIONAL CONTROL
CONFIDENCE
RISK MANAGEMENT

COMMON PSYCHOLOGICAL BIASES……………………………………………………..…………………………………………05

MINDSET OF SUCCESSFUL TRADER………………………………………………….…..…………………………………………08

ELEMENTS OF SUCCESSFUL TRADER ………………………………………………………………………………………………13

END THANKS………………………………………………………………………………………………….……………………….....…16

INTRODUCTION
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Welcome to the Trading Psychology Book

Before progressing, I want to make it very clear up front that “this book is
for those who are willing to put the work in”. My aim is to give you a
framework, a blueprint, and actionable methods help solve psychological
problems and everything else that can affect a trader’s mindset.

But this will be useless, unless you apply the methods presented in this
book. You must make the decision right now to be willing to be open-
minded and take responsibility.

‘’For things to change, YOU have to change.

For things to get better, YOU have to get better.
For things to improve, YOU have to improve.
When YOU grow, EVERYTHING in your life grows with you.’’

In this book, I am going to share with you all the things I learned and
applied to my trading which helped me personally succeed.

WELCOME

TRADING PSYCHOLOGY
Trading psychology refers to the mental and emotional factors that influence
a trader's decisions and behavior while trading. It plays a crucial role in
determining a trader's success in the forex market, as it can have a
significant impact on their ability to analyze and execute trades effectively.

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It includes managing emotions like fear, greed, discipline, confidence, and
emotional control. Mastering trading psychology is not just a supplementary
skill but a cornerstone of profitable trading. Successful traders distinguish
themselves by their ability to regulate emotions, stick to trading plans, and
learn from setbacks.

IMPORTANCE OF TRADING PSYCHOLOGY

 Emotional control: Trading can be a highly stressful and emotional

endeavor, and it is crucial for traders to have a strong sense of emotional
control. Emotions such as fear, greed, and hope can cloud judgment and
lead to impulsive decision-making, which can result in significant losses.
Developing emotional control can help traders make informed decisions
based on analysis rather than emotions.
 Discipline: Trading requires a high level of discipline to stick to a trading
plan, manage risk effectively, and remain consistent in trading strategies.
Trading psychology can help traders develop the discipline to follow their
trading plan and stay focused on their goals, even in the face of market
uncertainty.
 Better self-awareness: Trading psychology encourages traders to
reflect on their thoughts, feelings, and behaviors while trading. This self-
awareness can help traders identify and address any cognitive biases or
emotional pitfalls that may be impacting their trading performance.
 Risk management: Managing risk is a key aspect of successful trading,
and trading psychology plays a crucial role in helping traders assess and
manage risk effectively. By understanding their risk tolerance and
implementing sound risk management practices, traders can protect their
capital
 Confidence: Confidence is essential for traders to make bold decisions
and take calculated risks in the market. Trading psychology can help
traders build confidence in their abilities and trading strategies, enabling
them to act decisively and with conviction.

KEY ASPECT OF TRADING PSYCHOLOGY

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WHY?
To start this book of, I wanted to start with the most basic question and the
most important… If you don’t know then take a few minutes alone and start
writing down why.
 Why do you want to trade?
 What do you want in life?
 What type of life do you want?
 What type of people do you want to be around?
 What type of person do you want to be?
There is no right or wrong. It may seem simple, but the idea is to sit down
and think about things you never thought about before.

If you don’t know why you want to trade, then you will always be susceptible
to emotional trading. That’s why the ‘why’ is so important it will literally be
the strongest emotion out of all emotions, therefore, beating all the other
trading emotions like fear, greed, ego, etc. Why? Will be your driving
emotion that will help you win the game of trading...
‘’If you want something badly enough, nothing can stop
you.’’
9
This is your turning point. Took some time and consciously asked yourself
every day.
 Why do I want this?
 Am I willing to do what’s needed no matter what?

If you are tired of losing money, tired of switching strategies and tired of
constantly repeating the same old mistakes over and over, When you took
some time and really thought about ‘why’ I wanted to do this? It will shift in
your thinking. If you wanted to be successful, provide for your family, and
live the life you knew you deserved then start trading the right way and
knew it all had to start from why you wanted this.

Many traders don’t know ‘why’ they want to trade. Some people just don’t
want it bad enough, but if you are having a burning desire and why to keep
you going then you will make it.
10
Knowing what you want, will be what gives you the fire to trade better.

Exercise
1. Write down as many reasons why you want to trade
2. Narrow down the most important that really resonate with you

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3. Keep this list with you always, stick them on the wall as a constant
reminder
YOUR BELIEFS TO MONEY
One of the biggest hurdles for many traders I have encountered over the
years is their view towards money and trading. Many people viewing money
negatively (evil) and this can be what stops not just traders but anyone from
becoming wealthy.
The key is to first learn to view money positively. This can first be firstly
done by viewing how money benefits yourself and others. For example,
money helps give you the freedom to do what you want in life, it can give
you security, Life experiences, Help others less fortunate and provide a
better quality of life for your family.
All these things would be void if we did not have money. But a lot of
negativity is surrounded by money but it should just be seen as a tool to
expand our lives. But as we go through life, we are taught that money is
evil, etc. You need to realize that this is just not true. You can be a good
person and do good things with money.

BELIEF ABOUT TRADING

Many traders believe that trading is a fast way of making money, Trading is
not a quick rich getting scheme. It require time and experience to become
profitable in forex market

CONCLUSION
What you have just discovered is the difference between successful and
unsuccessful is simply the way they think. It really is that simple. To break
through the threshold to consistency, you need to find out which beliefs are
helping & which are self-sabotaging.
13

Exercise
Spend 10 minutes just writing down why money is an important tool to
yourself and other lives.

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UNDERSTANDING YOUR
PSYCHOLOGY
YOU’RE ENEMIES
To be a consistent and profitable trader, you need mental stamina and a
razor sharp mind. You can have the best strategy and still blow your
account, like any endeavor, forex should be treated as a business, it's not a
casino where luck rules the day, its 80% mindset and 20% actual strategy,
so your mindset must be in the right place
 People who approach the market looking for a lucky often end up
experiencing bad luck. Dealing with your mindset early on, is the first step
you need to take. You also need to approach the market with a clear
focused mind free from stress and other issues.

 Every forex trading book will say that you must trade on a demo first, this
book presents a different view. It encourages you to start trading on a
real account as soon as possible because we know that is where you will
learn mastery over your emotions and understand the psychological side
of trading quicker.

 It is emotionally more profitable to trade on a real account even if it's

50$ account. Trust me, it’s so much better than a million on a demo.
While you can test a few strategies on a demo, having a real account is a
must if you are want to master your emotions.

THE 6 MOST COMMON TRADING EMOTIONS

1) Fear
Fear is one of the two most frequently talked about emotions in trading
(greed, which comes next). Fear can be the cause of many trading mistakes
and manifest itself in a number of ways in trading:
 Fear of missing out on potential gains, FOMO can lead traders to make
impulsive decisions based on the fear of missing profitable
opportunities
 Fear of losing money,
 Fear of making mistakes.

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Fear of missing out - FOMO
At any given moment of the day, there are thousands of markets waiting for
you; hundreds of thousands of charts are moving 24 hours a day and every
tick means that you could make money. Dealing with missed trades can be a
real challenge for traders. Seeing how much you could have made can often
pose great challenges on a trader’s mindset and then lead to great
mistakes.

8 THINGS A FOMO TRADER SAYS

If you find yourself among the following points, FOMO trading plays a role in
your daily routine:

POINT REASON

I knew it the trader who followed a setup but didn’t take it

Not this time the trader who enters too early after a missed
I could have made so trader beating himself up with the benefit of
much money today hindsight
I waited so long for this the overly anxious trader talking a setup with a
trade trigger-finger
It still has room to go the trader who jumps in late after being too
scared to enter first
I have a feeling the trader reasoning himself into a trade without
all entry criteria
One time the trader in a speculative trade, hoping to get
lucky
I just enter with a small the trader justifying breaking his rules
position

WHAT DRIVES FOMO TRADING (FEAR OF MISSING OUT)?

Missing a trade seems like leaving money on the table. Now, let’s take a
look at the three scenarios around FOMO trading.

1. You enter early because you don’t want to miss out

You enter early because you don’t want to miss out. This often happens
when you create a trading plan and wait for everything to align. Just before
your setup completes and the price reaches your entry level, it starts to rise
without you. You then enter early, breaking your trading rules. Entering a
trade too early means that your risk is completely off because your stop loss

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is going to be much further away because of your early entry. Entering
trades too early can disrupt risk management and lead to losing positions.

2. You wait for price to show the perfect setup and then miss the
trade

Missing a trade that leaves without you because the entry signal happened
too early and without really showing you all the criteria is painful. Traders
who are in a “missed a trade” mindset tend to chase price or enter the next
trade earlier – we just saw why this is a bad idea. Traders who miss trades
interpret the event completely wrong. In the end, it wasn’t a setup based on
YOUR rules after all and you have your rules for a reason. Your rules will only
enable you to engage in some of the millions of opportunities that exist
every day

3. You wait until you get the perfect setup

In you trading plan you map out potential trade scenarios so that, once your
trading sessions start, you only have to wait until your entry criteria are met.
The checklist holds you accountable and visualizes the trade progress.
Violating your trading rules becomes much harder if your plan and checklist
tell you to stay out and you have to convince yourself why violating your
trading rules is the right thing to do.

This emotion can paralyze traders, causing them to hesitate and miss out on
profitable opportunities or exit trades prematurely.

Greed and Hope

 Traders driven by greed often ignore good money management rules.

They might hold onto trades too long, hoping for more profit, and fail to
take profits when they should. Greed also makes them act like gamblers,
trading without clear rules. This can result in taking too many risks and
making bad decisions, like overtrading

 Hope, fear, and greed often go together in trading. Traders who are losing
might feel hopeful and refuse to accept a loss, hoping the trade will turn
around. They might also try to recover past losses by taking bigger
positions than they should, breaking their own rules.

Excitement / Anxious

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Feeling excited or anxious while trading is a sign that something isn’t right.
If you’re feeling too anxious, it usually means your position is too large,
you’ve broken your rules, or the trade isn’t right for you. Paying attention to
how you feel and asking yourself why you’re anxious or excited can help you
avoid staying in trades you shouldn’t be in.

Overconfidence.
The minute you are overconfident, you will start over trading and from there
it's only going to get worse. From over trading to revenge trading -this is
when the ego is completely taking you for a ride -it doesn't want you to
accept a loss, so it keeps going back in and in again, until you are bust.
Frustration
Frustration often comes from mistakes caused by emotions like hope, fear,
or greed. When traders miss opportunities, break their rules, take too much
risk, or lose money, frustration builds up. This frustration makes the
negative behaviors even worse, creating a cycle that makes it harder for
traders to stay disciplined and make good decisions.
HOW TO IMPROVE THE PSYCHOLOGY IN
TRADING

AIRFOREXONE has enough experience to know what the suitable psychology

behind a successful trader is. Most novice traders are experimenting with
similar thoughts and emotions in front of the charts this chapter aims to
teach a vital lesson that makes the difference between those who lose and
those who win. The mindset and discipline are more important than the
overall strategy and all the technical skills of a trader. It would be a lie and
very poor to say the success in the fox market depends only on the system,
strategy and execution. Consistency and profitability are really determined
by the mentality. Our inner world determines the attitude, the attitude
determines actions, and actions determine the results to build a better life.
The aim of this chapter is to both help traders to think of a way, but at the
same time determine the right mindset to succeed

Many forex websites and companies that claim to sell "magic courses”
indicators will never tell you anything about psychology. Mindset, is the key

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thrash why we want to reveal you valuable content 336We prefer to tell you
the truth and the truth is that the control of Price Action and having a simple
system is a piece of the puzzle, but to succeed in this industry, we must go
further and go further and fight against our own enemy: our mentality.

WHY MANY TRADERS LOSE? AND HOW TO DISOLVE FEAR?

Most people who try to trade forex lose. There is a rational explanation for
this: Most people assume that this market is a financial market to get rich
quick. Many dreams are sold related to this industry on social networks and
the Internet. Many people enter the markets with unrealistic expectations,
thinking that they can drop their jobs after a week or a month or even
thinking they will multiply 1,000 euros and turn them into 100,000 euros or
dollars in a few weeks or months. This is absolutely the wrong state of mind!
The foreign exchange market is an investment, not a gamble! Trading aims
to build wealth trough time. Hence the myth that some people think the
market is like a casino, it's because people are so greedy they think they
can make a fortune overnight and end up losing all their money and have a
bad image of forex. Such unrealistic expectations will undoubtedly work
against you and only give a state of mind conducive to blow an account. You
will feel pressure and you feel a "need" to make money on the market as
soon as possible, which inevitably force you to make irrational decisions.
Trading should be absolutely clear, the mentality must be cold. You cannot
allow stress to dominate your actions, whether in the field of Forex and any
other area of your life. When you start to trading there is a subconscious
pressure and the need to make money driving a trader to start doing trading
irrational and sentimental way, and this error is fatal. The trading is not for
everyone, and it is 100% sure that it is not for people who believe in
enriching easy and have a short-term vision. Like any field, trading takes
time to master and once mastered, it can offer both geographic and
financial freedom. Just imagine having the skill to make 1% per week day,
month. You can eventually compound your money and eventually live
through your means. Trust in the process!
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THE PSYCHOLOGY OF NOVICE TRADERS

HOW YOU’RE BRAIN WORKS WHEN TRADING?

What does this have to do with trading? Everything. Trading is

mental.
Your trading errors don't come from the market, they come from your own
perception and reaction about the market information. Neurons are what
transmit information to different parts of the brain. The stimulus starts in the
amygdala and then move into the neocortex. Your brain and memory react
with past information. These neurons will start to associate themselves to
respond. Between stimulus and response there is a space. In that space is
our power to choose our response. In our response lies our growth or
stagnancy.

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Trading examples:
• In trading you will feel the pain that you experienced from that previous
loss and that will make you feel afraid for the next decision. You won't be
able to execute once the edge appears in front of you.
• If we had a major win, then these neurons will start to associate
themselves to the pleasure that you experienced from those profits.
However, neurons do not have a mind of their own, and they are
simply doing their job by transmitting information. That Information
can either be right or wrong! We can develop false or negative
neuron-associations throughout life.

FOR EXAMPLE:
• Smokers will associate pleasure to the inhalation of a cigarette, instead of
the pain that could be caused by cancer.
• Some people associate pain to falling in love if they have experienced a
bad breakup, and the begin to create negative neuron-association to
entering into a new unique relationship.
• Some will associate fear to every dog they see in the street if they have
experienced a dog attack before.

But how does all this apply to trading financial markets?

Almost every trader has experienced the pleasure of making a large amount
of profits, only for the market the reverse and it becomes a big loss. The
brain will create a neuron-association that will link pain to a normal
retracement in price. You will begin to equate a retracement to pain, and
thus create a false neuron-association. You are going to close your trades
with a simple pullback against you. It requires a mental process called
neuronassociative conditioning. The negative neuron-associations must be
turned into positive neuron-associations.

FOR EXAMPLE:
• Is the market retracing? Do not associate this with 'the market is taking
my profits back!' but rather 'the market may be presenting me with an
opportunity to add to my position'. This is a change in your neuron-
associations; a negative one to a positive one.
• Do you have hope when a losing trade runs and you want it to turn back
into profit? Do you feel desperation when the market is redistributing your
profits with one single retracement? Then change that and do the opposite.
Feel despair when a trade is running in loss and feel hope when a trade is
running in profit. This is a change in your neuron-association; a negative one
to a positive one.
• Did the market hit your stop loss? Do not associate this with the pain of
losing money, but rather associate it with the fact that the probability of the
next trade being a winner will stay because of your profitable system. This is
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a change in your neuron-association; a negative one to a positive one. Do
you feel great after a massive win? Then change that and feel protective
about what you collected. This is a change this is a powerful process that is
difficult and requires a lot of practice, years! But it can be used to change
almost anything or anyone. Hope this post was helpful.

HOW TO DEAL WITH FEAR

Fear of losing money, Fear of being wrong, Fear of missing out,
Fear of distribute Profits! 1
Your aim now is to trade WITHOUT FEAR!
Problem: If there is fear, it is because there is a lack of confidence in the
plan or strategy or just you are taking a lot of risks.
Solution: Patience, experience, risk less, take out your emotions when
trading. It can be very easy to be afraid of the market, especially if you are a
beginner and you do not have a plan or a trading strategy set at 100%. If
this is the case, you should not be near a real account. Fear can also be
created from a series of losses, giving the impression that there is no hope
in sight and can definitely give confidence kick and make us raise the arms.
It is important to note that even with a winning accuracy rate of 80%, there
will be a series of lost trades, the goal is to stay cold. Fearless and harmony,
for this, we will gain confidence in a demo account with our plan and
strategy. On the other hand, fear can be experienced differently. Risking too
much can be scary. There is a simple solution to this; you just have to risk as
much as you feel comfortable with the loss, you must break this emotional
barrier between you and your money. If the loss will hurt, it is advisable to
reduce the lot size and risk. Fear paralyzes the nervous system, thus
severely limits the intelligent trading. Try to get into a state of mind of set
and forget because you’re just accepting what you can afford to lose. Fear
is natural because simply, nobody likes to risk money knowing that you can
lose. But like any way to success, you must be patient and get rid of fear.
Fear is present after losing a trade, so it is advisable to know how to control
it.
Take a break, recognize your mistakes, and correct them. Success cannot be
rushed, enjoy the process because you are lucky to be interested in trading,
it is one of the gates of freedom, but you must be patient and control the
fear. The best is to learn to take out emotions. For example, if you have
experienced a loss, take a break, meditate.

HOW TO REDUCE DOUBT

Problem: We doubt of our trading plan or trading strategy.
Solution: Time and experience are responsible for us to gain confidence.
Doubt can arise after a few consecutive losing trades; very often it gives you
the impression of not having what is necessary to succeed. We finish with
tons of doubts about our trading plan and strategy. Do not worry because
everything is psychological. If you read this book, it's because you think and
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you know you can do it, and if you do not believe in yourself, you should
start doing another activity.
Whenever you doubt from yourself, take a deep breath and stay away from
the screen to take a break, return only when you feel relaxed. Doubt can be
controlled by experience. During your first few months of trading, the
question is quite normal, but use emotions as fuel for your progress. No
trader is profitable overnight, but we are more certain of anything, it is that
each professional was once a beginner and lived in the same situation as
you. Our ABC execution plan is an amazing way to execute objectively
without fear. We have previously back tested what we preach, then stick to
this and do not doubt in the strategy

HOW TO FIGHT AGAINST EGO

Problem: The ego is responsible for the creation of excessive confidence, in
a field where overconfidence kills since no one knows the future.
Solution: Keep your feet on the ground with our objectives, be humble and
practice gratitude. Ego is the most dangerous emotion. When you
experience a winning streak, you will feel that you are on top of everyone
and this can cause excessive confidence, but negative confidence. When the
price reaches the Take-Profit, it can make you feel as if you have the
greatest victory, which brings you to fall into the illusion of "it's so easy."
Stay humble, disciplined and remember this series of bad trades can always
come faster than winning streak! Another major mistake to avoid is that
traders with ego can add positions when they see a trade that goes in their
favor (or against them) they increase the initial risk without being tactical
and strict to a plan. They tend to hedge position because they think they will
always have a reason. The don’t like to accept that they are wrong. The ego
that many novice traders ignore is the belief that if they could make 20 pips
of profit using a lot adapted to $ 1 per pip, they believe they can do the
same, but with much more $ 10 per pip! Each stage of development
requires psychology and experience, do not try to skip steps, go ahead step
by step. You will trade with big money just do not rush to start trading with
logs undated to your account. Not taking into account risk management in
proportion to the amount of our account is a deadly weapon. Not only
because your account has increased should you quickly increase the lot. We
are here to get the skills to be profitable on a real account, not to play the
Wolf of Wall Street. The ego can be easily combated, all we have to do with
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our state of mind is to keep our feet on the ground, setting realistic
objectives respecting risk management. When you win a trade, the best is to
stay humble and practice gratitude. Each trade is unique. Each trade is
exposed to a loss. When you feel the euphoria before launching a trade, the
best is to move away from screens for a while to come back with a mindset
without emotions. My worst losses were just after a very big consecutive
series of winning trades. My ego was responsible of that. You should never
trust in the markets or yourself always question yourself.

HOW TO DEAL WITH REVENGE: FEAR OF BEING WRONG

Problem: Losing a trade after a loss and wanting to recover lost money
without logic.
Solution: Stay away from the screen until you are in harmony with yourself,
and forget about the previous trade. This emotion is really one of the most
difficult to fight when trading. After a losing trade, you will feel vengeful;
you’ll want to get your money back this is human nature, especially if you
are those who do not like to accept a loss. To avoid being in this situation,
one must understand that there are no certainties in trading, but only
probabilities. Every trade can be a losing trade, as mentioned above, each
trade is unique.
And you must not take it personally. The worst decision you can make after
taking a loss is to jump directly to another trade in the same scenario or
another trade just by the simple fact of wanting to
Recover what was lost. This may cause an even bigger loss, leading you to
worst emotions like being angry.345 being angry against the market,
computer, phone or yourself will not benefit you in anyway. Instead, these
emotions only worsens the situation because the market does not care who
we are. Even professional traders lose every day, so nothing should be taken
personally. With persistent effort and hard work, you will win while others
lose. We must now keep vengeance away from your mind. The big problem
with revenge is that it is the source of anger and hatred. These emotions
can affect both your behavior and the behavior that you share with others
(friends, colleagues and partner). However, if the risk was well managed, a
loss will be part of the game. Emotions in trading involve a lot of work in the
state of mind. The time you take between two trades taken can define a lot.

HOW TO AVOID FOMO:

Problem: Fear of losing an opportunity it occurs when we enter into a trade
because of the fear of missing the opportunity. We trade without a plan and
without a sign of confirmation in our system by simply being afraid to miss a
good opportunity. We take random trades
Solution: The market offers new opportunities every single day! trot me, I
have years of experience here, and I can confirm that is better to miss an
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opportunity and wait for the next that get involved in a bad trade with a
poor risk reward. The FOMO is one of the emotions that we will face more
frequently. It manifests itself in many ways and affects us when it comes to
making decisions. Fear of losing an opportunity push traders to act without a
plan and trade bad quality setups. Sometimes it push traders to convince
themselves to take trades when fact there is no opportunities. Yom need to
understand that market will not go anyway

HOW TO UNDERSTAND HOPE: EXPECTATIVES

Problem: We expect something in return in a battle where nobody knows
what will happen in the future. WE are afraid of being wrong and we create
expectative when we expect something at it does not really happen we will
be disappointed.
Solution: Avoid expecting to have reason with the market direction. The
best is to act naturally respecting the risk and avoiding the feeling of hope. If
you are right okay if you are wrong okay. If you have hope in a trade you will
want to risk more and thus create hope for that specific trade. Some traders
make the mistake of taking a trade without stop loss. They expect in that
specific trade to continue turns in their favor (they hope).347 the problem
with creating expectative is that we will trade with a “trade by trade
approach”. That means that we will create emotional attachments to one
particular trade. However in every single trade we take, there is a chance of
lose. We have to do the opposite and obtain a “series of trades approach” In
other words we have to eliminate that emotional attachment to one
particular trade and start applying the system the same way for every single
trade we take. The reason why we suffer is because we expect something.
Fear affect the way we perceive the information. Our interpretations comes
from our believes. Once we manage our interpretations, we manage the way
we fell and the way we act let’s talk about other thing in relation with
expectations: Perpetual Blindness: Having the ability to perceive something
but we are blind to accept it. I know it’s hard to understand but with an
example you will understand this.

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Due to the fact that he is afraid of being wrong and he created expectative
from the market he will unconsciously build self-protective mechanisms that
work on an unconscious level. This trader can potentially quit his stop loss
because he is convinced about his trade idea= that will lead you to take a
trade with uncontrolled loss or hedge his position.348 without any
expectancy the situation would be different. Let’s see the same example
below from a trader that trade without fear of losing money and without any
expectative.

Do you see the difference? It’s up to you to start trading with a different
mindset. Apply the same risk management and focus on execute your plan
In order to build a series of trades approach the following list will help you:
• You know which behaviors do and do not serve your purpose
• You are not picking individual trades, therefore no one trade has anymore
or les significance than the others.
• You will gain a sense of freedom to flow in and out the market without any
single internal conflict because you are not living or dying on the outcome of
any particular trade
• By truly accepting that the outcome of this trade could be different you are
managing your expectations
• You won’t perceive the market info as threatening
• You will be aspiring to trade without fear
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• You will reduce the potential to make toxic trading

HOW TO DEAL WITH IMPATIENCE:

Problem: Impatience can cause immature decisions and affect our
decisions.
Solution: Stick Your Trading Plan, patience is a virtue. The money is made
by waiting. Much of the role of a trader is to wait, the impatience is very
common, but try to stay focused and patient. Wait for closed candles. Wait
for H4 candles, daily candles etc...

HOW TO DEAL WITH FRUSTRATION:

Problem: Create a vicious cycle of negative emotions.
Solution: Keep in mind the ultimate goal: financial and geographic freedom
that trading can offer, consider trading as a business and not as a hobby.
The frustration will be the result of an error due to previous emotions. When
we lose a trade, money, we risk too much, forget our rules, we will be
frustrated. This frustration will make us more mistakes, entering into a loop
that we do not want to be in. Take a break and remember to consider that
trading is a long-term game. It takes years to become an overnight success
trader.

CONCLUSION:
The work and progress in trading should be done to condition the
subconscious mind so that trading skills will be considered a genuine long-
term business. If we apply our trading plan properly, we respect the risk
management, and we remain disciplined, there will be no problem to make
trading a new source of income. Although one thing clear, in 100 trades,
even with a success rate of 80%, there will always be a chance to see a few
losing trades in a row. The best way to make psychological progress is to
write every feeling and emotion felt before a trade, during a trade and after,
that way you will establish a direct relationship between strategy, risk
management and you will eventually find the way of success. As we always
say with psychological improvement, we can do less of what it doesn’t bring
us results and more of what if bring us results How to build a proper state of
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mind? 350Forging a winning mindset is what will determine much of the
success. Apply all that this book teaches you and you will see how the path
of progress will open you the doors. Choose your trades carefully and trust
in simply price action the hardest battle is the battle you carry with yourself.
Believe me that the combined compound with the desire to get from point A
to point B through the
Trading is very powerful. Keep your mind clear and focused on long-term
goals. The following sections are actions that you should apply daily to your
routine to take advantage of the market.

DISCIPLINE
Discipline is the backbone of successful forex trading. It involves sticking to your
trading plan, regardless of market conditions or emotional impulses. Successful
traders have the discipline to stick to their trading plan and strategy, even in the face
of market fluctuations and challenges. Maintaining discipline requires patience, focus,
and consistency. A disciplined trader follows their set rules for entry and exit, risk
management, and position sizing. This consistency helps in avoiding impulsive
decisions that can lead to significant losses. Developing discipline requires a clear
understanding of your trading strategy, setting realistic goals, and maintaining a calm
and composed demeanor, even in volatile markets.

CONFIDENCE AND EMOTIONAL CONTROL

 Confidence: Confidence is important in trading, as it can help traders trust their
analysis and decision-making processes. However, overconfidence can lead to
complacency and risky behavior, so it's important to strike a balance. Confidence
in trading comes from experience, knowledge, and a well-tested trading strategy.
However, overconfidence can be detrimental. It can lead to taking excessive risks
and ignoring warning signs.
 Emotional control, one of the most important aspects of trading psychology is
learning how to control emotions such as fear, greed, and overconfidence.
Emotional decision-making can lead to impulsive and irrational trading decisions,
which can result in losses. Traders need to manage their emotions and remain
objective, especially during periods of high volatility. Techniques such as
meditation, mindfulness, and regular breaks can help in maintaining emotional
balance.

RISK MANAGEMENT
Managing risk is an essential part of trading psychology, as it can help traders protect
their capital and avoid large losses. Traders should set clear risk management
guidelines and stick to them to avoid emotional decision-making.
COMMON PSYCHOLOGICAL BIASES IN FOREX TRADING

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Behavioral finance, explores how psychological biases influence investment decisions.
These biases can lead traders to make irrational choices, ultimately hindering their
success. Here are some common biases to be aware of in forex trading:
 Overconfidence Bias: Overconfidence bias occurs when traders overestimate
their abilities and the accuracy of their predictions. This can lead to taking
excessive risks and deviating from their trading plan. Overconfidence is often
fueled by a series of winning trades, giving a false sense of control over the
market. To combat this, traders should regularly review their performance, seek
feedback, and remain humble, acknowledging that the market is unpredictable
and that losses are part of the trading.
 Loss Aversion Bias: Loss aversion bias causes traders to fear losses more than
they value equivalent gains, often leading to holding losing positions too long.
Implementing and sticking to strict stop-loss orders helps traders accept and
manage small losses as part of a successful trading strategy
 Anchoring Bias: Anchoring bias in forex trading involves overly relying on initial
information, such as a price level or forecast, without adapting to new data. This
can hinder decision-making and strategy adjustments. To avoid anchoring bias,
traders should continuously seek and assess new information, remaining
adaptable in their trading approach.
 Confirmation Bias: Confirmation bias leads traders to seek information that
confirms their existing beliefs while disregarding contradictory evidence. This can
reinforce incorrect assumptions and increase risk. To mitigate confirmation bias,
traders should maintain objectivity by regularly challenging their viewpoints and
considering alternative scenarios.

COMMON PSYCHOLOGICAL CHALLENGES FACED BY FOREX TRADERS

Forex traders often face a range of psychological challenges, including
 fear
 greed
 overconfidence
 impatience
 Loss aversion
These emotions can cloud judgment, lead to impulsive decisions, and hinder long-
term trading success.

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STRATEGIES TO ENHANCE YOUR FOREX TRADING PSYCHOLOGY
 Understand Your Emotions: Recognize how different emotions influence your
trading decisions. Identify emotional triggers and develop strategies to manage
them effectively.
 Develop and Stick to a Trading Plan : A well-defined trading plan is crucial for
effective forex trading. Outline clear entry and exit strategies, risk management
parameters, and position sizing. Stick to your plan and adjust it based on objective
analysis, not emotional reactions. Regularly review and refine your plan to adapt to
market changes and enhance your experience.
 Continuous Education on Forex and Risk Management: Stay informed about
forex market dynamics, technical analysis, and fundamental factors. Equip yourself
with robust risk management strategies to protect your capital e.g. Utilize Stop-
Loss and Take-Profit. Continuous learning reduces uncertainty and helps manage
emotions.
 Limit Trading Activity Avoid overtrading by focusing on quality over
quantity: Excessive trading can lead to emotional fatigue and poor decision-
making. Set specific trading hours, take breaks, and concentrate on high-
probability trades to maintain a clear mindset and avoid emotional pitfalls.
 Practice Emotional Control: Develop self-awareness through techniques like
trade journaling and meditation. Journaling tracks emotional responses and
identifies patterns, while meditation enhances focus and reduces stress. Establish
a pre-trade routine to prepare mentally and maintain emotional stability during
trading.
 Patience: It involves waiting for the right trading opportunities, being able to
endure market fluctuations, and sticking to your trading plan without getting
swayed by short-term movements.

ADDITIONAL TIPS FOR ENHANCING YOU’RE TRADING PSYCHOLOGY

Enhancing your forex trading psychology involves continuous improvement and the
adoption of various strategies to maintain emotional and mental balance. Beyond the
foundational aspects of discipline, confidence, and emotional control, there are
additional techniques and practices that can further bolster your trading mindset.

FIND A SUPPORTIVE TRADING COMMUNITY

Engaging with a supportive trading community can provide immense benefits. Being
part of a community allows you to share experiences, seek advice, and learn from the
successes and mistakes of others. Online forums, social media groups, and local
trading clubs are great places to connect with like-minded individuals who understand
the challenges of forex trading.

BENEFITS OF A TRADING COMMUNITY

 Shared Knowledge: Access to diverse perspectives and strategies.
 Emotional Support: Encouragement and support during tough trading periods.
 Networking Opportunities: Connections that could lead to mentorship and
collaboration.
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POSITIVE MINDSET

Having a positive mindset in forex trading involves maintaining confidence, resilience,

and optimism even during challenging times. It helps in making rational decisions
(Trading and gambling drawing a clear distinction between trading and gambling
is crucial. Trading involves informed decision-making based on analysis, strategy, and
risk management, while gambling is more about chance and speculation without a
solid foundation.

THE VALUE OF JOURNALING

Keeping a trading journal allows you to track your trades, analyze your performance,
and identify emotional patterns. This self-reflection can help you refine your strategies
and improve your decision-making process.
BENEFITS OF JOURNALING
 Performance Analysis: Review and learn from past trades.
 Emotional Awareness: Identify emotional triggers and patterns.
 Strategy Refinement: Adjust and improve trading strategies based on
insights.

THE POWER OF VISUALIZATION

Visualization techniques can be a powerful tool for cultivating confidence and
achieving trading goals. By envisioning yourself making successful trades and
managing emotions effectively, you can reinforce positive behaviors and outcomes

HOW TO PRACTICE VISUALIZATION

 Daily Visualization Sessions: Spend a few minutes each day visualizing
successful trades and emotional control.
 Positive Affirmations: Use affirmations to boost confidence and reinforce a
positive mindset.

THE BENEFITS OF DEMO TRADING

Utilizing demo accounts to practice trading strategies and test your emotional
responses in a risk-free environment can be incredibly beneficial. Demo trading allows
you to hone your skills and build confidence without the pressure of real money on the
line.
ADVANTAGES OF DEMO TRADING
 Skill Development: Practice and refine trading strategies.

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 Emotional Testing: Observe and manage emotional responses in a simulated
environment.
 Risk-Free Learning: Gain experience without financial risk.

MIND SET OF SUCCESSFUL TRADERS

The mindset of a successful trader serves as the cornerstone for effective decision-
making, risk management, and navigating the inevitable highs and lows of trading. It
encompasses qualities like unwavering discipline, focused attention, patience in
waiting for opportune moments, and a commitment to continuous learning and
improvement. Whether you’re embarking on your trading journey or seeking to refine
your approach, understanding and honing the trader’s mindset is fundamental to
achieving consistent profitability and long-term success in the competitive world of
trading.

THE PILLARS OF A SUCCESSFUL TRADER’S MINDSET

A successful trader’s mindset is built on several foundational pillars that support
consistent and profitable trading. Each of these elements plays a crucial role in
shaping the mindset necessary for long-term success in the trading world.

DISCIPLINE AND FOCUS

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 Sticking to Your Trading Plan: A trading plan outlines strategies, risk
management rules, and goals, fostering discipline and preventing impulsive
decisions. Resist deviations of strategies during market volatility.
 Maintaining Emotional Control: Maintain decision-making control to sustain
long-term success, avoiding reactionary moves.

PATIENCE AND PERSISTENCE

 Waiting for the Right Trading Opportunities: Exercise patience for high-
probability setups, minimizing risks and maximizing gains and Engage selectively
in trades with optimal success potential.
 Accepting Losses as Part of the Process: Acknowledge losses as inevitable,
using them as learning experiences. Learn from losses to refine strategies and
enhance performance.
 Learning from Mistakes and Adapting Strategies: View mistakes as growth
opportunities, adapting strategies to evolving market conditions.

RISK MANAGEMENT
 Understanding and Managing Risk for Each Trade: Evaluate trade risks
against overall tolerance levels. Maintain risk-reward balance to protect capital and
support growth.
 Utilizing Stop-Loss Orders and Position Sizing Strategies: Use stop-loss
orders to limit losses and safeguard investments. Also Optimize trade size to
prevent overexposure and minimize losses.
 Protecting Your Capital for Long-Term Success: Prioritize capital preservation
for sustainable trading. Focus on long-term growth over short-term gains for
consistent profitability.

LIFE LONG LEARNING

 Staying Up-to-Date on Market Trends and Analysis Techniques: Stay
informed on market trends and analysis for informed decision-making and Adapt
new tools and strategies to enhance trading performance.
 Seeking Continuous Improvement Through Education and Practice
 Adapting to Changing Market Conditions: Adjust strategies to meet evolving
market conditions.

OVERCOMING COMMON TRADING PITFALLS

Navigating the world of trading involves recognizing and overcoming several common
pitfalls. These pitfalls can derail even the well-prepared traders if not managed
properly. The primary obstacles include fear and greed, overconfidence, and
confirmation bias. By understanding these challenges and employing specific
strategies to address them, traders can develop a more resilient and effective
mindset.

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FEAR AND GREED
 Recognizing the Emotional Influence of Fear and Greed
 Understanding Emotional Triggers: Fear and greed are the most influential
emotions in trading. Fear can manifest as the anxiety of losing money, leading
traders to prematurely exit positions or avoid taking trades altogether. On the
other hand, greed can push traders to chase after every potential profit,
leading to overtrading and taking excessive risks.
 Impact on Decision-Making: Fear can cause paralysis, preventing traders
from making necessary decisions. Greed can result in overconfidence, making
traders blind to the risks involved. Both emotions can cause traders to deviate
from their trading plans, leading to inconsistent
 Developing Strategies to Manage These Emotions
 Pre-Trade Preparation: Before entering the market, successful traders get
prepared. This involves setting clear entry and exit points, determining
acceptable risk levels, and having a contingency plan for unexpected market
movements. A well-defined trading plan can act as a safeguard against
impulsive decisions driven by fear or greed.
 Setting Realistic Expectations: Unrealistic expectations can fuel greed.
Traders should aim for consistent, modest gains rather than striving for huge,
risky profits. Understanding that losses are a natural part of trading helps keep
fear in check and prevents it from influencing decision-making.

 Avoiding Trading Decisions Based on Emotional Impulses

 Strict Adherence to Trading Plan : One of the most effective ways to combat
fear and greed is to stick rigidly to a trading plan. This plan should be based on
thorough analysis and should outline specific criteria for entering and exiting
trades, managing risk, and handling unexpected conditions.
 Journaling and Self-Reflection: Keeping a trading journal allows traders to
track their decisions and the emotions behind them. Reviewing this journal
regularly helps identify patterns of behavior driven by fear or greed, facilitating
better decision-making in future trades.

OVERCONFIDENCE
 Recognizing the Dangers of Overconfidence after Successful Trades
 Awareness of Overconfidence Bias: After a series of successful trades,
traders might develop an inflated sense of their abilities, leading to
overconfidence. This bias can make them underestimate risks and ignore
warning signs, increasing the likelihood of significant losses.
 Objective Evaluation of Trades: It is crucial to analyze both successful and
unsuccessful trades to maintain objectivity. Understanding the reasons behind
each outcome helps traders avoid attributing success solely to their skills and
recognize the role of market conditions.

 Maintaining a Realistic Perspective on Your Trading Abilities

 Continuous Learning: Overconfidence can be mitigated by acknowledging
that there is always more to learn. Successful traders continuously seek to
improve their skills through education, mentorship, and staying updated with
market trends and new trading strategies.

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 Seeking Feedback: Regularly seeking feedback from mentors or peers
provides an external perspective on your trading performance.

 Avoiding Excessive Risk-Taking

 Risk Management: Implementing strict risk management rules is essential to
prevent excessive risk-taking. This includes setting stop-loss orders, limiting the
size of positions relative to your total capital, and adhering to a predefined risk-
reward ratio.
 Diversification: Avoid putting all your capital into a single trade or market.
Diversifying your investments across different assets or markets can reduce the
impact of any single loss and mitigate the effects of overconfidence.

CONFIRMATION BIAS
 Understanding the Tendency to Seek Information That Confirms Existing
Beliefs
 Definition of Confirmation Bias: Confirmation bias is the tendency to
favor information that confirms one’s existing beliefs or hypotheses while
disregarding or undervaluing information that contradicts them. In trading,
this bias can lead to skewed analysis and poor decision-making.
 Impact on Trading Decisions: Traders influenced by confirmation bias
might selectively gather information that supports their views and ignore
data suggesting otherwise. This can result in incomplete analysis.

 Seeking Out Diverse Perspectives and Market Analysis

 Broadening Information Sources: To combat confirmation bias, traders
should actively seek out diverse perspectives and information sources. This
includes reading reports from different analysts, considering alternative
viewpoints, and staying open to new data that might challenge their
assumptions.
 Critical Thinking: Developing critical thinking skills helps traders evaluate
information objectively. Questioning assumptions, analyzing data from
multiple angles, and considering the possibility of being wrong can lead to
more balanced and informed trading decisions.

 Remaining Objective in Evaluating Trading Opportunities

 Systematic Approach: Adopting a systematic approach to trading can help
maintain objectivity. This involves using predefined criteria for evaluating
trades, relying on data-driven analysis, and avoiding emotional attachment
to any single position or strategy.
 Regular Review: Periodically reviewing your trading strategies and
outcomes can help identify instances where confirmation bias may have
influenced decisions. This ongoing evaluation supports continuous
improvement and helps refine trading approaches.

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Trading psychology
Psychology is a significant part of trading. You can have a really good trading system
but when you aren’t able to follow a plan and stick to your rules, then even a winning
system will not work for you.
In this chapter, I will give you some psychology tips but in the end, it is all about
experience. You need to learn it yourself, you will probably need to reprogram your
head a bit.
The first step to start learning trading psychology is to open a real account. Demo
won't do. The money needs to be real. If the money is real, then your emotions are
real. Even with small amounts of money, you will experience all the emotions that go
with trading. You will experience greed, temptation, fear, despair, failure, triumph...
these are emotions that demo account will never give you. The best thing about it is
that even a small trading account will do. Even a small trading account with 0.01 lot
trades is a hundred times better than a demo account.

Four kinds of trades

One of the most difficult things in trading is to realize and put up with the fact that
you cannot be right in 100 % cases. In fact, if you manage to be right in 60 % in the
long run, then you are a true pro in this game! I think people, in general, have a
problem accepting they were wrong. Since school, we were praised when we were
right and punished when we made a mistake. That is one of the reasons why people
have a problem admitting that they were wrong in their trading analysis and that they
had a losing trade. A losing trade isn't necessarily a bad trade though. I suggest that
you look at this from a different perspective and recognize four kinds of trades:
The first step to start learning trading psychology is to open a real account.

Good winning trade

Good winning trade means that you made your analysis properly and you also
executed the trade flawlessly according to your trading plan. Then the trade went
according to your plan and ended up as a winner. This is the kind of trade everybody
likes.

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Bad winning trade

Bad winning trades are in my opinion the worst ones. Such trade is usually made
without analysis or with a poor analysis. These trades are also made based on a
“feeling“ or on a decision made on the spur of the moment. Bad are also trades that
you executed badly – trades where you didn’t stick to your plan. The worst thing
about such trades is that they encourage you. When you take a trade based just on
your gut feeling and it is a winner, then you are encouraged to take more such trades.
It worked this time, so it will work in the future too, right? No, it won't! What is most
likely to happen is that you will be trading based on your gut feeling more and more
and you will start losing money. You will also probably start trading with bigger
positions (because your gut feeling must be right this time!)...You know how this sad
story ends, right? It ends with a margin call. Remember – a badly planned or poorly
executed trade is a bad trade, no matter if it ends as a winner or as a loser. A bad
trade is also every trade you don't trade 100 % according to your rules. If you, for
example, bend the rules a bit in one trade and it ends up a winner, then you will feel
encouraged to bend some other rule next time. In some time you will be bending most
of your rules and you will wonder why the strategy no longer works. Obviously, the
reason is that you bent so many rules that it became a new strategy (which you
haven't backtested and you haven't hard rules for).

A badly planned or poorly executed trade is a bad trade, no matter if it ends

as a winner or as a loser.

Good losing trade

Good losing trade is potentially dangerous, especially for newbie traders. I call this
kind of trade the "hope-killer". You have a good and solid strategy, you do your
analysis thoroughly, you executed your trade exactly according to your trading plan
and then the trade ends up as a loser. You did your best and still, you lost. So, the
logical conclusion is that the strategy doesn't work, right? No, the strategy probably
works just fine but it only works for example in 60 % of cases (which is a good win
rate). You only hit the remaining 40 % in which the strategy fails. It is even possible
that you do everything right again and still, there is another losing trade and then
another. This is still statistically possible. The most important thing is to stick to your
rules, don't change anything, focus on analysis and flawless execution. Not on the
shortterm result. I heard a really fitting andhelpful quote, that I try to stick to. It goes
like this: “When you want to win a tennis match, you need to watch the ball.
Not the scoreboard.“ Some time ago, when I opened a pretty big trading account, I
started with a drawdown. I took a loser after loser. I wasn't exactly happy about it but
I was experienced enough to know that this is statistically possible and I didn't freak
out. I continued doing my analysis thoroughly and I followed my trading plan 100 %,
no matter that first trades were all losers. In the end, it turned out just fine and my
account grew consistently. So, always remember – no matter how good your strategy
is, no matter how thorough your analysis is and no matter how flawless your
execution is, there will be losing trades. You need to accept that and make your peace
with it.

Bad losing trade

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Bad losing trade is a trade that was based on a skimp analysis, no analysis or on a
“gut feeling“. Such trade can also be a poorly executed trade or a trade you took
without any real thinking. A There will be losing trades. You need to accept that
and make your peace with it. good thing about such trade (from the educational
point of view) is that you get immediate feedback (Stop-loss) for your lack of
discipline. Hopefully, you will be clever enough not to repeat your mistake again.
There is no reason for you to be mad about making such a trade if you are new to
trading. Think of it as a scholarship fee. Just try to learn from your mistake and don’t
repeat it.

How to never break a rule

An interesting fact about trading psychology is that everybody knows how to handle it
theoretically. When it comes to real trading though, most people find out that it is not
so easy and there are barriers in their heads. Such barriers prevent them from
executing trades as easily as they would like to.
One of the most common problems is that people are quitting their trades earlier than
they originally planned. For example, their Profit Target is 10 pips, but when they are
8-9 pips in open profit, they close their position because they are afraid that the price
will turn. So, instead of taking full 10 pip profit, they take “at least something“. I was
also like this, so I know what I am talking about. There is nothing rational behind such
behavior. People are just afraid. The strongest emotions traders face are fear and
greed. The fix to this is to use a trading journal and start doing a simple statistics of
your trades. You do this in order to collect some hard data. Writedown what your
actual result was and in another column write what your result would be if
you stuck to the rules. After some time you will see a big difference between
the two. Statistics and hard data that you collected will show you something that you
won’t be able to deny. Whenever you will be tempted to break or bend your rules
again – just remember the statistics that you did. You will know that statistically
speaking – breaking a rule hurts you and you won’t do it ever again.
Cycle of doom and despair
I know that Cycle of doom and despair sound silly. I wanted to change the name of
this chapter, but I decided I won’t because it just fits.
135
What I call the Cycle of doom and despair is a phenomenon and a reason why so
many traders fail. The cycle starts when you as a trader develop or learn a relatively
good trading strategy. You trade with it but before you give it enough time to master,
you start tweaking it and changing little aspects of it or you start to look for another
strategy, which you think would work better. In the end, you are caught in a circle
where you only look for new strategies, but you don't spend enough time to master
any of them. This way you are always losing money and always looking for something
different. This is the Cycle of doom and despair.
The only way out is to stop looking for new strategies. Find one that you believe in,
one which makes the most sense to you and which feels most comfortable. Then give
it enough time. Don't be impatient. Trading isn't easy. If it were, everybody would be
doing it. One thing can be a bit confusing so I would like to make it clear. Traders
should try different trading styles to see what fits them best, what feels most natural
and what they are most comfortable doing. However, they should not jump from
strategy to strategy. This would be for example jumping between ten intraday
strategies – that would be the Cycle of doom and despair which makes traders fail.

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How to handle winning
Congratulations if after all the hard work your strategy is successful and your equity
curve goes upwards! If you want to maintain being profitable, you need to keep
respecting the markets and you need to stay the hardworking and humble person.
Find one strategy that you feel most comfortable with and then stick with it.

Usually, people who start winning start to feel like they are invincible, they start to
risk much more money, they enter more risky trades, they don't do their market
analysis and trading preparation as properly as before, they start to bend rules, etc...
Before they know it, they start losing money quickly and they are back where they
began, or worse – they find themselves in enormous drawdown. People usually take a
break after such experience and after few weeks or months, they start anew. Again,
they start humble and hard working. When they start being successful and profitable,
they repeat their mistakes and they become careless and they start feeling invincible
again. Then they fail. This cycle repeats until the person quits trading, often blaming
markets or the strategy for not being consistent. The trick is to stay humble and hard
working all the time. When you have a winning streak or when your trading is going
really well, then you need to be most vigilant and extra careful. Do your analysis
properly, don't overtrade and most importantly, don't start trading with too big
volumes! You may raise your trading volumes a little bit, but you need to do it little by
little. When a losing streak hits you (this will happen sooner or later), you need to stay
in the game and survive. Not to blow your account just because you have just doubled
your positions because you felt invincible.

How to handle losing

A really important and helpful thing in trading is to have statistics of your strategy. If
you are starting with a new strategy you can use statistics from your backtests and
then start adding

statistics from your real trading to it. Statistics based on data from your real trading is
much more valuable than statistics based on backtests.
How to deal with a standard drawdown
When you are losing, it best to take a look at your own statistical data and see if such
a scenario has happened before. You need to see if this is still "normal" or if
something bad is really going on. If you are just in a regular drawdown, then seeing
the statistics will reassure you, because you will see that this is still normal, that it
happened before and that the strategy will most likely work just fine again. In this
case, I suggest you just continue with your trading as usual and try not to freak out
too much. Remember that all strategies have their ups and downs. It is important that
you do not change your strategy nor your money management.

How to deal with an excessive drawdown

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Excessive drawdown is when your current drawdown is bigger than any drawdown
your strategy ever made. I don’t recommend any extra measures until your current
drawdown is more than 30-50% of your biggest drawdown. So, for example, if your
biggest drawdown was 20%, then you start taking action when you are 26–30% down.
When you are in such a drawdown, it is natural that you are afraid to take more
trades. You feel like your strategy has stopped working and the more you trade, the
more it hurts. When this happens, I do not advise you to stop trading. You would
probably miss a winning streak
(Murphy‘s law works really well in trading). Instead, I recommend that you continue
trading, only with smaller positions (for example half positions). With smaller
positions, you won't be paralyzed with fear of losing another trade and you will be
able to think clearly again. You will regain faith in your strategy and you will be slowly
digging out of your losses. It won't be as fast as with full positions but you will be
making a progress. You can start using your standard position size again when you dig
out at least halfway through the drawdown and when
you feel confident enough to trade with standard positions again.
Lower your trading positions when you are in an excessive drawdown.

How to get back on the right track

Sometimes what was working before seems not to work anymore. Instead of jumping
to another strategy, I suggest that you try to find what you were doing differently
back then when your trading was just fine and your strategy was working. The best
thing you can do is to take a screenshot after every trade you take and add a brief
commentary to it. Taking such a screenshot literally takes 1 minute and it can save
your trading career! Some people do only screenshots of their bad trades but instead
of focusing only on the negative, you also need to see what you were doing right and
what was working. So, when you are struggling, go back to your screenshots and go
through them. See what trades you were taking when everything worked just fine.
Now you only need to trade the same way as you did before when everything was
fine. This will help you get back on the track. It is like when your Windows
crashes. It loads a backup of the last configuration that worked. You should do the
same. Another thing you can do is to go through your statistics and see what trading
instruments work with your strategy the best. If we are talking forex, then it is usually
the EUR/USD that outperforms the other pairs. So, if you are struggling, I suggest that
you start trading only the instrument that works the best for you. Don’t trade anything
else until you regain a major part of your lost capital back and until you feel
comfortable enough to start trading with the other, worse performing instruments
again. I hope that you have realized how enormously a good statistics can help you. If
you are struggling and you don’t have a solid statistics with screenshots to lean to,
you are left clueless and helpless. You probably won’t survive your first drawdown. So,
if you are not writing down your trades or doing screenshots of your trades, then start
now! One day you will need it and it will help you tremendously. Th last thing I would

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like to mention here is that you don’t need to go through your statistics and
screenshots only when you are in trouble. In fact, I suggest you do it regularly.
Especially going through the screenshots is really helpful, educational and it will help
you move forward in your trading no matter how good you are. Sometimes, it is really
interesting to see what trades you were taking one or two years back. You will realize
the progress you made since then and it will make you feel really good and motivated.

Good statistics and trade screenshots will help you when struggling.

TRADING PSYCHOLOGY RULES

1) Always act in your Own Best Interest: This is the golden rule of Trading Psychology.
The nature of trading in the financial markets is inherently stressful. Every decision
you make as a trader should always be done with your own best interest in mind
which ensure personal physical and mental health. This will result in a trader with a
calm and objective frame of mind.
2) Be an Objective Trader: Trading decisions should be based on what the markets are
doing and showing you, and not what you think or want the markets to do. Never
force your will on the markets because the markets don’t care or discriminate. The
markets are always right.
3) Be a Disciplined Trader: A successful trader will have a carefully designed Trading
Plan, Trading Rules and Trading Strategy with the ability to adhere to these
guidelines with strict discipline. Disciplined trading cultivates consistent results that
generate long-term profitability.
4) Remain Calm and Relaxed: In order to be an objective you must remain calm and
relaxed to be able to make the correct decisions that are in your own best interest. A
calm and relaxed frame-of-mind is achieved by being a disciplined trader which will
result in self-confidence. Never trade when you are not in the right frameof mind,
which may be a result of being tired, stresses, hung-over, etc.
5) Set and Accomplish your Goals: Never chase money. Set realistic, attainable goals
that can be measured on a Daily, Weekly, Monthly and Annual basis. Money will be
the by-product of achieving your goals.
6) Think Success: It is a proven scientific fact that the human mind is powerful enough
to influence the outcome of everything you do every day. If you focus on your losses
too much you will create a “Losing frame of mind”. Focus on being a winner by
visualizing your success as a trader in order to breed a “Winning frame of mind”.
7) Be an Active Winner and Loser: Indecision, fear, greed and desperation can
paralyze a trader and promote extensive losing streaks. Treat trading as a serious
business and be actively involved in making decisive decisions while trading that will
be in your own best interest. Always act immediately to “Cut your losses short” and
“Let your profits run”. Not the other way around. Embrace positive emotions that will
result in success, and reject negative emotions that will result in failure.
8) Learn to Love taking a Loss: It may seem like stupid thing to do. The fact is that the
sooner you exit a losing trade the more money you save yourself. You therefore act
in your own best interest. Accept the fact that you will take losses on a fairly regular

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basis. Manage these losses to minimize the risk on your trading capital and your
profits.
9) Reject Fear: The fear of being wrong about a trade setup, taking a loss or the
market suddenly turning on you may cause you to be indecisive and missing out on a
trade, getting into a trade too late, cutting your winning trades short or, worst of all,
letting your losing trades run. Reject and fight fear by being disciplined, objective and
sticking to your Trading Plan, Trading Rules and Trading Strategy. By doing this you
will gain self-confidence which is a much more powerful emotion than fear.
10) Never be Greedy: Being greedy is the opposite extreme of being fearful that will
have the same end result. A greedy trader will abandon and bend the guidelines set
in his Trading Plan, Trading Rules and Trading Strategy for the sake of chasing the
“home run”. Trading is a disciplined business that demands consistent results to be
successful. Stick to your trading system and strive to achieve your goals, rather than
chasing money.
11) Wishing, Hoping and Praying is Futile: Making poor trading decisions and then
sitting in a tight bundle of nerves while you are wishing, hoping and praying that the
markets will turn your way will result in ultimate failure. This is one of the most
destructive traps of trading. It will destroy your confidence, breed fear, take a huge
toll on your mental and physical health and will cultivate a negative frame-of-mind. Be
an active Winner and Loser. Be objective, disciplined and act immediately on losing
trades instead of waiting for the market to turn in your favour.
12) Never take Revenge: The market does not care about your losses or profits. If you
take a loss and jump right back into the market to take revenge, then you are not
being objective and are not acting in your own best interest. Even if it works out
some times and you recover your loss, in the long run you will end up with big losses
resulting in the inevitable complete loss of your trading capital. After a loss, review
your trade execution to identify where you made mistakes and correct them
immediately. In most cases you will find that you deviated from your trading system
(Trading Plan, Rules and Strategy). Admitting your mistakes, learning from your
mistakes and correcting your mistakes will develop you as into a successful trader.
Remember, the market is always right!
13) Be Yourself: Every person has his/her own unique personality. This has a direct
influence on what type of trader you are. Develop your own Trading System which
must include having a clearly defined realistic Trading Plan, Trading Rules and a
properly tested Trading Strategy that suits your own individual Trading Style. What
works for someone else may not work at all for you. Remember the golden rule of
Trading Psychology – “Act in your Own Best Interest”.

MASTERING YOUR OWN SIMPLE TRADING STRATEGY

Each trader has unique characteristics; consequently, appropriate strategies to others
does not always adapt to oneself. In other words, what works for another trader
cannot possibly work for us? Some traders may be patients and therefore more
suitable for swing trading, while the impatient people who prefer to be in and out of
the market the same day fall into the category of scalpers. Whatever the preference
selected trading, practice it and perfect it. A sure way to become a better trader is

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only mastering a few simple techniques, don’t over complicate, and determine
winning setup modeling order to find what has worked for you and what you already
used before.
You must enter a trade if your trading plan is respected. Sometimes you need to have
the mind and emotions of a robot, in this sense, you must know a simple strategy.
Trading is all about risk and reward management. Again, you have to let the emotions
away.

MANAGE EFFECTIVELY RISK IN ORDER TO AVOID BAD PSYCHOLOGICAL GAMES.

If the risk is not controlled in each individual trade, you open the door to bad
emotions. This will affect the psychology, your action and therefore the results. The
worst way to trade is to do it with emotions. Once you start trading emotionally, it can
be very difficult to stop. You can eliminate the possibility of becoming an emotional
trader just by risking only an affordable portion of money per trade then just set and
forget. Just put your mind up so that once the trade is opened, the loss will not hurt.

BE STRICT AND ORGANIZED MONITORING YOUR TRADES

As we mentioned earlier, the organization and monitoring are key success points.
Remember, you must treat trading as a real business and not as a casino. All trades
must be documented. We recommend to take a screenshot for each scenario and
make notes about the reasons for the trade decision. For example, "I saw a bullish
engulfing candle in a pullback after a breakout in a Fibonacci level of 0.618, I bought
with a stop-loss at 35 pips with 1% risk of my capital for a ratio Risk / Reward of 1: 3.
Another very important point that many do not take into account is the fact to mark
each of our actions and experienced emotions. The aim will be to assimilate the lost
trades with the lived emotions and from the opposite side the winning trades with the
emotions we felt. By other side we have shared many books that are going to help
you with your psychology. You just have to click the link in the free telegram group
and make sure to check the folder: Free educational content. Hope the books shared
will help you. Stay Zen! 353

WHAT PERSONAL METRICS COLLECT IN ORDER TO BECOME STRONGER AND WIN

MONEY

Tracking personal metrics requires that we collect a range of information about those
personal factors that are most connected to our trading successes and weaknesses
and P&L.
▪ Emotional status—How does our trading performance (profitability, risk
management, decision making) vary as a function of our emotional states? Keeping
track of key emotional variables (frustration/calm; confidence/fear; unhappy/happy)
and seeing how those vary with gauges of performance can provide information about
the emotional factors that contribute to and detract from performance.
▪ Physical state—in our physical state we can be energized or depleted, rested or
fatigued, comfortable or in discomfort, healthy or sick, toned or out-of-shape, keyed-
up or relaxed. Very often our physical state sets the stage for our cognitive
performance, as we make different decisions and maintain different levels of
concentration when we are in a positive versus negative physical state. Tracking our
physical states and knowing their impact on our performance can help us stay mindful

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 PSYCHOLOGY
of occasions when flight-or-fight responses can undermine our best market
preparation.
▪ Cognitive state—how we think impacts how we feel and act. By tracking our mind
states and correlating those with various aspects of performance, we can become
sensitive to situations in which we are more and less attuned to markets and their
patterns. Are we focused or distracted, optimistic or pessimistic, open-minded or
closed, clear or fuzzy, prepared or unprepared, positive or negative?
▪ Preparation—it’s not unusual for our performance to vary with our preparation
routines. How do we perform when we’ve engaged in longer versus shorter market
review, more or less research, greater or lesser physical exercise, more or less sleep,
better or worse eating? Our lifestyles can greatly impact our physical, emotional, and
cognitive states, setting us up for success or failure.

THE 15 BASIC PSYCHOLOGICAL COMMANDMENTS YOU WILL NEED TO UNDERSTAND

TO SUCCEED IN FOREX
1. Trading offers total freedom in our decisions, but it can act against us, it is essential
to have self-control and discipline to follow a set of rules.
2. Every market conditions in trading is unique, a system with many variables creates
hesitation. The more your system is simple, the more will be effective.
3. You must take responsibility for the results, have rules and control you. Discipline,
patience and dedication ... Suppose it's our fault and not those of others, or the
market. The market is sovereign.
4. You should always know before trading risk (how much you're willing to lose if the
trade does
Not come out as we expect). 5. Losing is part of trading. Each trade must have its own
stop-loss. We need to understand that the stop-loss saves you many times, and allows
you to continue trading.
6. Above all it allows you to protect your capital. Losing is a normal part of trading. It
is obligatory to accept and how to win, like accepting and learning to lose.
7. We must be firm with our rules (trading plan, system) and flexible with our
expectations, in fact, the best is to keep expectations as low as possible in the right
direction to avoid disappointment but you must use the hope for long-term goals.
8. Most errors are from "no action" or attitudes such as "fear of being wrong", "fear of
losing money" or "fear of miss the opportunity."
9. Anything can happen in the market, it is impossible to know what the price will do,
you must think about in terms of probabilities and try to put them in your favor.
10. It is essential to accept the risk and result of each trade.
11. You do not need to know what will happen in the future to earn money, learn to
control emotions.
12. Consistency is in the mind, not in the market, the tools are your desire and
willingness, commitment, effort and desire to learn. All this mixed will help you have
an aptitude for understanding more and better what to do.
13. You should avoid creating a negative mindset.
14. Exhilaration, self-sabotage, ego, eager are the worst enemies in trading. Without
control over these four aspects, ruin is the most common destiny.
15. Accepting the risk means accepting the consequences of your operations without
emotional discomfort or fear, if you are unable to accept is that you risk too.

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MONEY EXPECTATIONS
A big problem is that we want to stop working as soon as we know it is possible to live
from trading. This will cause us two problems: the first is that we will stop having a
monthly salary. The second is that we will try to create a monthly salary with trading,
and this is not how it works. Forcing us to get a monthly return will cause anxiety,
frustration and greed. Given the fact that we need a monthly wage will force us to
operate forcibly, violate our rules and leads us to risk more than normal. However,
many people living comfortably trading as their primary income. The key lies in the
perseverance and patience, because forex is a very powerful art can enrich
abundantly only those able to persevere, to be disciplined and have patience. There
are multiple hedge funds and investor that are willing to give you money only if you
prove them you have the right skill.

Conclusion:
As we have seen in this chapter, the psychology of trading is not a secret recipe. The
psychology of trading is related to knowing what to do and expect every moment. This
is given by the good habits that every trader should have:
1. Treat trading as a business.
2. Have real expectations.
3. Have a simple Good trading plan or trading system356
4. Keep daily updates in your Trading Journal.
5. Consistency in terms of risk rewards
If one of these elements fails, it will lead us to reflect on what we do, and it's in these
moments that the current starts flowing our emotions and we begin to lose our
nerves. If we know what to do at each moment, it is impossible for us to hesitate, and

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undoubtedly the trading becomes monotonous and almost and automatic activity, just
as it should be.

THE TRADING AS PART OF YOUR LIFE AS A

BUSINESS
In this section, we answer some questions that we are asked very often to help you
integrate the trading in your life and use it just like a business.

HOW MANY OPERATIONS SHOULD WE MAKE PER MONTH?

We have no exact answer. We will not tell you 2, 6, 15 or 46. The problem with this
question is that the answer will change between each trader (scalping / swing). A
scalper will do much more than trade a swing trader. Now, what is clear is that if you
trade with charts of 4 hours and you make 100 trades a month, I'm sorry, but you are
clearly overtrading ... Therefore the elimination of certain variables is essential to
determine the maximum (approximate) number of operations that should be
performed.

FROM WHAT DOES IT DEPEND ON?

The most important factors in determining the number of operations that we will do a
month is the time unit of execution and trading style. As we wait for certain
conditions, it is logical that if the price moves faster (lower time frames), conditions
will be very different to when working with major time frames. The second important
factor in determining the number of trades: will be our trading style. If you are a
scalper, your style dictates that you will make a lot of trades, because you are in
search of small price movements = average up to 3
Trades per day. On the contrary, if you follow our swing trading style and intraday,
you'll make a few trades daily not to exceed more than average 5 trades per week.

THE MAGIC NUMBER

Although we warned first that there is no exact number, as I have written on the
subject, I would like to give a sincere approximation. Considering that we use daily
charts and four hours, we can say without fear of mistake that you just need two to
five trades per week. If we extrapolate this weekly amount for a whole month, we can
find ourselves with 10 to 20 trades per month. It should be mentioned that this is a
medium that guides and each trader will find the number of trades that suits him best.
357Needless to say, this average operations to a maximum or a minimum, so you do
not even need to reach even 20 trades per month. Everything will depend on you.
Remember this will force us to be more meticulous and strict, searching for quality
trades with high Risk and reward. If the opportunity does not present all of the above,
we should not take the trade. . After all, our primary goal is to protect our money by
avoiding trades with bad quality setups

THE APPLICATION OF THE RULE OF LESS IS MORE, PRIORITIZE QUALITY OVER

QUANTITY.
Like many novice traders, we also began to make as many trades as possible to
supposedly make higher profits and take advantage of all the opportunities in the
market. The result was a large number of trades lost with big drawdowns .Although
there are some ways to find consistency in trading, make fewer trades is definitely
one of the best options. Why? Less we seek to make trades per week and we will be
strict with the material factors we consider when analyzing an opportunity. This will

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make us more selective and demanding, we will look in more detail in many charts.
We will look for more confluences factors etc. This will result in no doubt with good
opportunities, with greater chance of success and a great RR.
First to reduce overtrading you should try to do one trade per day but with
strong confluence of factors. Theoretically make 1 trade per day we will make 5
trades per week and 20-22 per month.
But look, this rule is personal, it is up to you to find your rules, but it is recommended
to prioritize quality over quantity. : Before a trade ask yourself the following question:
If I have to choose only 10 trades, this setup would be part from these 10 trades?

WHEN TO MOVE FROM A DEMO ACCOUNT TO A REAL ACCOUNT?

First, we require all of our students and community members start on a demo
account. Many people do not take seriously when it is fictitious money and they
consider it as a waste of time, but this is the best way to test what you've learned. At
this point, you realize that those who are not going to achieve success in forex
because they are looking for quick and easy money. Remember

FIRST THEN LEARN EARN.

When you internalize the theoretical concepts, have a trading plan and manage
platforms and trades very well, you can consider opening an account with real money.
The objective of demo account is:
1. Discover a simple and comfortable strategy based in price action
2. Learn to limit losses
3. Learn to be profitable while respecting risk management
4. Start your own trading style

When talking of being profitable and consistent, it does not mean in terms of the day
or week, we talk at least 3 months. That said, you are ready to open an account and
apply everything you've learned to start making money. Just a tip, treat the demo
account as if it were real.

HOW MUCH MONEY DOES IT TAKE TO CREATE A REAL ACCOUNT?

Stupid trading mentors will say you that you can make miracles with an account of $
100 euros. However, we recommend at least using a sizeable capital. There may be at
least $ 500 or $ 1,000. More capital is important, better. It is very difficult to manage
1% with a $ 100 account

HOW TO TRADE WITH A 9-5 JOB OR STUDIES?

The routine of a trader is probably one of the most important aspects to observe when
we aspire to achieve profitability. We believe that success is achieved with simple
steps applied continuously and with an optimistic mindset. It is essential to treat
trading as a real business. If we do not give it enough time, it will be difficult to
achieve the expected profitability. If today we spend 30 minutes in front of the screen,
tomorrow four , Thursday nothing because I go out with colleagues for a drink and
Friday some time before going out to dance, sorry, this is not for you. Having a set
routine will not make us become good traders overnight; but if this will help us
balance this future new revenue source in which you have embedded in your life.360
A big excuse is "I do not have time for this," Let us tell you something, we all have 24
hours just put yourself in the mind of these people who are now financially free thanks
to trading. They began into this adventure when they do not have time "to study and

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 PSYCHOLOGY
work." Is up to you to make sacrifices for a few years because what is sown is
harvested. Less than Netflix or alcohol and more time to learn new skills. In all cases,
it is always advisable to sacrifice a few years to get a good life. Now, we do not say
that you lock in front of a screen, quite the opposite, it would be boring you will not
learn anything, and you will end up frustrated, simply treat it as a business and a
passion.

HOW TO MAKE TRADING WITH A 9-5 WORK?

Becoming a trader requires a learning process, followed by corresponding demo
practice before making the leap into the real account. Logically, throughout this
process, we will not win a single euro, so we recommend doing that trading adapt to
your lives (work, studies ...) and not the opposite. The first step we must do if we are
to become good traders is to ask ourselves, how much time should I devote to
trading? Even if it's a simple question, it is really important to answer honestly.
Depending on the response, we will increase
Our trading style.
1. I have relatively a lot of time to be able to make intraday scalping.
2. I have very busy days (family, children, work etc. ...), I can only swing. The Forex
market opens Sunday to Friday and we can trader at any time.

WEEKLY ORGANIZATION WHEN YOU HAVE A JOB OR STUDIES NEXT:

It is useless to be glued to a screen all day, so we share something very useful:

EVERYTHING STARTS THE WEEKEND

Forex is continuous from Sunday to Friday, we have to develop a plan of action before
it opened, so the weekend is when the more time we will devote to it. Do not worry,
we're talking up to 2 hours, depending on your ability to analyze charts. But think
about it, two hours, you already have a full weekly plan developed.
The first thing we will do is analyzed in multiple time frames the instruments we
are going to work. When we plotted the important levels and price guidance medium
and long term in each of them, we can make a list of pairs with potential setups. In
this list, we will note the pairs that are about to present an opportunity for our system.
After making your technical analysis and draw up your trading plan to execute in the
week, we recommend to write economic news that will arrive, so be aware of possible
times of strong volatile, this way we will decide to trade scenarios where the news is
not involved or to trade after the publication of news.

THE WORKS WEEK

If you have prepared your pairs to trade during the week, you just have to wait for the
price and confirmations. This is the main reason why we opted for swing trading. For
this, it is best to set alarms in your trading platform when the price will be closer to
our trigger zone. Our job is to just wait and see if the price meets our expectations,
that we have set the weekend. If they are encountered during the week, excellent, we
will open a trade. If the price does not show, we do nothing. Easy and simple. If we
trade times frames of 4 hours we will see the price every time a candle closes, in
other words, every four hours. In these charts there are six candles per day (6x4
hours = 24 hours). Now, if we work on h1 or m30 requires a bit more effort, however,
we should not let the trading occupy our time.
Whenever a candle is closed, we ask ourselves the following questions: Is this a
confirmation? Is this candlestick pattern learned in this book? If the answer is yes, we

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 PSYCHOLOGY
will consider entering the market with confluence factors, and if it does not follow our
confirmation, we will do nothing. Opportunities will always be shown every single day.

AT THE END OF THE WEEK

Although our time of reflection is every Friday, everyone is free to choose any time of
the weekend. This moment of reflection is only intended to annotate the trades that
we have made during the week in our trading diary. This rule is sacred. To recap when
the memory is fresh Taking a moment allows us to see how and why did we fail, what
we have done well, areas for improvement, and what we should stop doing. Although
it seems long, it takes less time than the average time spent per day in social
networks by an average person. Once past that time of reflection, the cycle will start
again with the aim of advancing. Each new week is an opportunity to be better.

LET TIME DO ITS WORK

One of the main problems of novice traders is: the constant change of the trading
system.
The most common mistake in the beginning, is to constantly change systems or
methods, because after a few losses, we say that this system is crap and it does help
me. Change of trading strategy or system, blame the forex course or blame the
market is not useful.
Blame does not help us to improve. It is essential to find a trading system that you
consider logic and with which you identify. Once you have it, exploit it and become an
expert. Then you will notice improvement in your trading. You will see winning trades
come gradually with experience. Not all systems work for you, so once you find a
system that you feel comfortable with, take time to improve. Each week, we have to
study a summary of our operations, both trades winners and losers, to analyze what
we are doing right and wrong. Even if you think that you always enter a trade in the
same way, the truth is that each trade is unique, we ignore or forget just variables.
This is why it is very important that you recognize your mistakes, compare with
winning entries and draw conclusions. Once we have drawn conclusions and see why
some entries do not work, the next step is to force us to only execute trades with
relatively similar profiles as those of our winning trades. If we do this, even if we have
losing trades, we will improve exponentially our trades.

TRADING IS NOT A CAREER, IT IS NO FINISH LINE CONCLUSION:

There are no shortcuts to success. Everything will happen in due course and we must
understand that trading is a long term investment game. One can become profitable
next month or next year. If you get to this point, your life will really change for the
better. To achieve this, it is important to build strong discipline bases and consider
trading as a business. The market will teach you more life lessons that the education
system and labor market. Through self-realization experiences, we become more
ferocious and gets used more and more to fight our inner demons. We will learn from
bad experiences that are now our new teachers.
Forex trading is a very powerful instrument capable of providing geographical and
financial freedom, but only if something is respected as any other professional field.
What's that famous thing that makes the difference?

Passion:
Let's be honest with you. You will only become a successful trader if you like trading.
If you are here just for the money it will be difficult, because the learning process

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takes time. The success doors are open for those who treat it as a passion, they are
the ones who end up actually winning in the market. Anyway if you arrive to this final
lines it’s because you start to slowly fall in love with trading. Forget the money, focus
your energy in order to execute quality trades maybe now you will win 1 dollar
tomorrow will be 1000 dollars. Do not chase the money chase the skill. Only those
who have sacrificed time, who lived hard times and have fallen in love with trading
remain on the path of freedom or already are free and live much better than others.
Just let us tell you that yes it is possible to live comfortably with trading. It would be a
shame if you miss this tremendous opportunity. You just have to persevere because
you have all the power in your hands to change your life. Toucan overcomplicate your
trading or just and simply apply simple price action.364

RULES OF A SUCCESSFUL TRADER:

1. I focus on the implementation of good trades and not on the money.
2. I trade when I'm in a good psychological state of mind
3. I trade as a sniper, not as a machine gun
4. I promise to persevere no matter what.
5. I withdraw from my vocabulary the word should and replace it with "I'll do it now."
6. I trade with money that I am willing to lose.
7. I still continue to learn and educate myself.
8. I'll be with my rigid discipline but flexible with my expectations.
9. I will apply a rule that allows me to close a trade if profit and another in order to
protect and quickly cut losing trades.
10. When I find a setup, I'll make sure I think with a cold head and follow my trading
plan.
11. If I cannot find a setup to operate, I will be patient and I will not force my
imagination to invent a scenario.
12. I will respect my risk management.
13. I'll make break time in order to clear my mind.
14. If I lose more than 3 trades a day, I stop and come back when I'm with a cold
head.
15. I consider trading as a business.
16. I always feel relaxed after opening an operation, otherwise something is wrong.
17. I have nothing to take personally.
18. I always complete my trading diary before and after.
19. When I make a deal, I have to put beside the ego.
20. I remain disciplined in all cases

DEVELOPING A WINNER’S MINDSET

There are a few ingredients that go into formulating the recipe of a winner's
mindset. Frankly, these ingredients are many and will be mentioned throughout
the book. Here, I will discuss the tools required to develop a winner's mindset:
 1. Patience: Successful forex traders have patience as a common virtue. .Most
businesspeople who aim to succeed embrace patience. As a newbie in the FX
markets, your ability to distinguish the moment to be patient, and the time to act is
your first move towards success. If you study your market well and understand
what to expect from your system, the winner's mindset tells you to be patient.
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 2.Discipline:No one achieves anything in life if they are not disciplined.
Discipline comes in two forms -you could be disciplined in the way you relate to
people and in the way you relate to yourself. The thing is, both work well together.
If you focus on self-discipline without watching how you relate to others, the
activities of others might ruin what you have worked hard for. You cannot be
patient if you aren't disciplined. Successful forex traders do not get to the top of
their careers without being disciplined with themselves and with their trades.
 3. Objectivity: Your objectivity and ability to trust your system are necessary for
success in the FX markets. Most successful business people begin to record
landslide success the moment they learn the art of emotional detachment. It is not
an easy feat, but it’s achievable. Many businesses failed because the people
involved were unable to master their emotions and control negative energy coming
from internal and external factors. One needs to learn how not to be
influenced by the opinions of pundits. Although one should take suggestions
into consideration, one mustn't base their financial decisions on them. During the
preparation stage, successful forex traders identify the most reliable system and
act on their signals with confidence.
 4. Feasible expectations: Even though successful forex traders trade with the
confidence that their trading acumen will yield huge profit, they know they have to
be realistic with their expectations. They don't entertain the piper's dream of
making a profit of $1,500 per trade when they invested 5300 in their trading
account. They know that even though the markets can change, they should expect
practical return on investment (Roll).
 5. Risk assessment: Successful forex traders are conscious of risk; which is why
they make contingency plans to cushion the effects of any foreseeable risk. This is
known as the ability to control risks. Risk control is the process of evaluating
potential losses and subsequent interventions to reduce or eliminate possible risks.
That’s why even though traders evaluate potential losses and make actionable
plans to reduce them, they also create a proviso that reduces the outcome of the
risks on their profit.
 5. They learn from their mistakes. Successful people do not see themselves as
masters of the game. They try to master the market, but they aren't masters of the
market. There is a difference between the two. While those who think they've
got the knowledge try to blank out information, those who have mastered their
market know that there could be something to take from every conversation
Developing a winner's mindset is the first step towards success. People engage in
different ventures, but their success story is facilitated by one thing: a
winner's mindset. Successful forex traders understand the makeup of legends and
they know that success is not a birth right. It is not the outcome of luck. Rather,
success is built. It is created through discipline, tenacity, patience, objectivity and
focus. As American Billionaire, Warren Buffet, states so succinctly -
“There are two rules in trading. The first rule is to never lose money and the
second rule is to remember rule number one."

STRATEGIZE
Successful forex traders develop and implement strategies that boost their activities
and success in the markets. They understand how important developing the right
strategy is and when they develop one, they work to implement it. Apart from
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having the talent to do business, forex traders approach trading professionally.
Trading currencies requires consistency, attentiveness, and discipline.
Successful forex traders understand these factors and they work with them. you must
have a solid understanding of what the markets are doing and how to navigate
them, forex traders become successful by taking note of the following components:
 They work within a strategic timeframe: Strategizing according to the timeframe
focuses on the traits and business acumen of the trader. This indicates the sort
of trading suitable for the talents and experience of the trader. And if they
maintain this, there will be few occurrences of losses. This is what it means to
get prepared according to the timeframe.
 They create and work with a practical system: Successful forex traders work
with a methodology. Once they have established their favorable timeframes,
they choose a consistent methodology. This is one of the secrets of success.
Having an established system or pattern of trading. For example, some traders
prefer to buy support and sell resistance, while others prefer to buy or sell
breakouts or trade using indicators like MACD (moving average convergence
divergence) and crossovers.
 3. They work with the best market: Successful forex traders test their system on
tones of instruments for a reason. This is to determine if their system's style is
compete- blue with the instrument they are trading. For example, if Trader B is
trading USD/JPY currency pair in the market, they are likely to dis- cover that
Fibonacci support and resistance levels are more reliable and compatible with
their instrument than other system styles. In line with the strategies taught in
this book recommend you trade the major currency pairs: EUR/USD, USD/JPY,
AUD/USD and GBP/ USD (my favorite).
Preparation is one of the key ingredients of the Winning Psychology Recipe that
makes forex traders successful. It enables them to choose the most reliable and
compatible system style for their instruments. If a trader understands the financial
trends in the markets but they pair their trading instruments with the wrong system
style, there is a higher chance they will be less successful.
RISK MANAGEMENT
In business, your ability to manage risk is reliant on emotional intelligence. The
process of identifying, understanding, analyzing, accepting or judging
uncertainty in investment decisions is known as risk management.

ASSESSINGAND MANAGING RISK

 1. Stick to a winning trade: Although there is no definite formula for avoiding
risk in business, a trader's ability to determine their trading strategy's win-
loss ratio and the average size of their wins and losses are enough to
manage risk. This is achieved by studying trading numbers and the sum of
the long-term profitability of these numbers. And when this is clarified, it’s
easier to identify the winning trade and stick to it.
 2. Learn how to minimize losses: This takes us back to Warren Buffet's rules
of trading - “Rule Number 1: never lose money, and Rule Number 2: never
forget rule number 1."This is the basic process of minimizing losses. Knowing
how to obey rule 1 and rule 2 depends on mindset. Successful forex traders

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have the right mindset. They understand how to cut their losses. They learn
to never lose more than 1%of their portfolio on any trade.
 3. Learn to keep emotions out of business: This aspect is imperative.
Involving emotions in business has never profited any business person. Even
though instincts and past experiences create emotions that should be
listened to, trading purely with emotions is usually disastrous. Successful
traders understand this, which is why they don't delegate duties to amateurs.
Expert traders understand when the system says get out, but an amateur
trader will possibly hold on for bigger wins and often end up losing money.
The three points above address how successful forex traders manage risk. And
through these risk management tips, they learn how to overcome negativity.

OVERCOMING NEGATIVITY
Everything about growing a big business is based on mindset: the psychology of a
winner. Learning how to overcome negativity is no different. Being self-disciplined
helps businesspeople tackle negativity. Negativity can come from internal or external
factors. And there are times when both factors influence negativity.
HOW TO OVERCOME NEGATIVITY
 1. Acknowledge your plans aren’t fool-proof: Most times, people work on their
vision but they fail to understand that their goals need to be flexible .Anything can
happen to what appeared to be foolproof plan. When problems are not anticipated,
it’s easy to get thrown off balance. Just remember, just as one plan can fall apart, a
new plan can come into play.
 2. Be your own cheerleader: Successful forex traders make it to the top by being
self-supportive. They find strength in themselves before they look for
encouragement and support from others. Once they establish that a venture is
profitable and have done a quality risk assessment, they go ahead and invest.
 3. Start small and gather momentum:. As a forex trader, you should pay attention
to the markets, fall under the mentorship of expert traders, and be open to act
when your system says it's right. This was exactly what George Soros did. He was
persistent and consistent. He monitored the markets. And he moved in for the kill
when the opportunity was right. Moving step by step until you get to the apex of
your career is the easiest way to maintain positivity.
Successful forex traders do not create room for negativity and certainly do not take
mindless risks. They understand the pros and cons of their trade and, even though
a business can take a downward turn when you least expect it, they trade
according to what they know. They do not actively engage in known oversights and
they never give up.

Consistency Is the Key

“To improve your Forex trading performance, you should

understand “

PSYCHOLOGY STEVEN SALEH

 PSYCHOLOGY
Your exposure”

THANK YOU

PSYCHOLOGY STEVEN SALEH