FXstreet.com: Education: Market Psychology

Develop a Positive Trader Trance

contact@tradingacademy.com (Online Trading Academy) — Wed, 08 Feb 2012 05:57:17 GMT

Have you ever emerged from a trading session in a fog and found yourself looking over the trading carnage of violated rule after violated rule and heard yourself say, "Who made those trades?" And, as the fog lifted, it became clear that you had been trading like a crazy person? It was like someone or something had control of your mouse and you felt as if you were in a trance; a negative trading trance to be exact? Well, if this or something similar has happened to you, then listen up...you are

Reprogramming Yourself for Better Trades

contact@tradingacademy.com (Online Trading Academy) — Wed, 01 Feb 2012 06:50:38 GMT

It had happened before, actually many times before. Jim looked on with a feeling that swung like a pendulum between helplessness and anger. He felt helpless because he had violated his rule despite the fact that he had so often said that he wouldn't. He felt angry because he had let himself down. What happened is that he had moved his stop. He had moved it four times in this trade to be exact and the price action had still moved against him. To make matters worse, what would have been a small

8 Questions You Should Ask Yourself before Going Live

info@babypips.com (BabyPips.com) — Fri, 27 Jan 2012 08:34:08 GMT

Meet Ralph. He's fiddled with demo trading for two weeks and decided that it's time to put real money on the line. After setting up his very own live account with a broker, Ralph opens the platform right away to input his very first trade. "It can't be that difficult. All I have to do is find a trade setup, click a few buttons here and there, and I'll raking in the dough! I can picture myself now living the life of a superstar Forex trader: making piles of cash and cruising down Sunset

The Now of the Trade is Where the Power

contact@tradingacademy.com (Online Trading Academy) — Wed, 25 Jan 2012 05:41:00 GMT

Trading can be a very challenging endeavor indeed; and one of the variables that makes trading so difficult are the emotions that become activated in the process. The reason why emotions become so involved is because with every tick of the market while you are in a trade, you are either gaining or losing "money." It is the only business venture where this takes place. Additionally, money or capital is a sociopolitical and economic driving force in our society. Power and influence are direct

2 Truths You Should Know in Trading

info@babypips.com (BabyPips.com) — Fri, 20 Jan 2012 08:08:45 GMT

1. Expect the Unexpected Face it. No matter how much effort you put in your analysis, you still won't have a hundred percent accurate idea of where the market is headed. There's always the chance that a surprise is waiting just around the corner, maybe in the form of an unannounced currency intervention or shockingly dovish comments from a central bank official. In fact, these unforeseen events can go beyond the economic arena and also come in the form of natural catastrophes or a sudden

The Importance of Documenting Your Trades

contact@tradingacademy.com (Online Trading Academy) — Wed, 18 Jan 2012 07:11:42 GMT

Ralph looked on feeling anxious and tense as the price action inched toward his stop. He had drawn a supply zone on the ES E-mini 60 minute chart and had placed his stop 2 ticks above the top line of the zone. He told himself, "Oh, crap, it's going to take me out." He didn't like being stopped out as he admitted to himself that, "Nobody does." But he also reminded himself that, "I have the stop in to protect me and it is doing what it is designed to do...and that's OK." Just then he saw that

Does Size Matter?

info@babypips.com (BabyPips.com) — Fri, 13 Jan 2012 08:48:01 GMT

It's not what you've got, but what you do with it that counts, right? Wrong. If you've got $1,000 in your account, and you're trading ten mini lots at a time, you will quickly end up broke as a joke. Size does matter...in trading. Get your mind out of the gutter. One of the most common mistakes traders seem to make is entering a trade with the correct number of lots, otherwise known as "position size". As a newbie, your risk should never be more than 1-2% of your total account. That means if

Greed is the Flip Side of Fear

contact@tradingacademy.com (Online Trading Academy) — Wed, 11 Jan 2012 06:53:34 GMT

Merriam-Webster's Dictionary defines greed as simply, "... a selfish and excessive desire for more of something (as money) than is needed." Greed is often referenced as one of the main contributors to trading loss. Greed mangles the mind by distracting the trader from what matters most in the trade, which is quite frankly, to protect your capital by prudent planning and following rules. It also distorts your judgment regarding high probability strategies and effective follow-through.

3 Ways to Help You Take Demo Trading More Seriously

info@babypips.com (BabyPips.com) — Mon, 09 Jan 2012 08:50:29 GMT

Unless you're some uber-genius who can predict what will happen in the next two minutes, chances are that you started your forex trading career with demo trading. There's no shame starting with a demo account - it's where all the pros first honed and developed the skills that made them mad moolah later down the road. The problem starts when, after just a couple of months (or even just weeks) of demo trading, some traders start to slack off and not take it seriously. They think, "Why am I

The New Year is an Opportunity for a New Perspective

contact@tradingacademy.com (Online Trading Academy) — Wed, 04 Jan 2012 05:20:27 GMT

Before you know it, we will be celebrating a new year. It is traditionally a time for reflection and resolutions. This makes it a great opportunity to initiate real change in what you are doing in order to go to the next level in your trading and your life. Change is ubiquitous. As we look at change it becomes apparent that we must identify what kind of change we're talking about. Change comes in all forms as in, a change in residence, a change in relationships, a change in body size, changes

What You "Tell" Yourself Affects Your Results

contact@tradingacademy.com (Online Trading Academy) — Wed, 28 Dec 2011 14:32:07 GMT

Change is a common theme of my Lessons From the Pros articles. That's because too many traders are not getting the results that they want, and they need to "change" something (thoughts, emotions, behaviors) in order to get different results. We have talked about tools, techniques and concepts that are designed to help you to think, feel and do differently. In today's article, we will take a closer look at the thought process and the importance of not only "what" you say, but "how" you say it.

4 Psychological Pitfalls that Will Blow up your Account

info@babypips.com (BabyPips.com) — Tue, 27 Dec 2011 08:41:10 GMT

Meet Jack. Jack is a professional trader. He makes all his money trading the Forex market. He has been trading for five years. He is patient, disciplined and, in his trading, he is fearless. Meet Tom. Tom is a newbie. He barely manages to break-even with his trading. He has been trading for six months. Tom takes unnecessary risks as he is undisciplined, and he panics when he takes a trade. Let's imagine we have a super profitable system. On paper, traded mechanically, this system has an

Lead Yourself to Victory One Battle at a Time

contact@tradingacademy.com (Online Trading Academy) — Wed, 21 Dec 2011 06:03:28 GMT

Lester looked sheepishly at his P & L statement. He had a series of drawdowns that had culminated in one recent loss that put a rather significant hole in his portfolio. The reason for the loss is what concerned him; he had moved his stop on a big trade – a clear violation – and he had moved it multiple times. When he finally closed the trade, he had lost a substantial amount of money. He felt sick, disheartened, and angry. He heard himself say, "... you're so stupid. What were you

4 Reasons Why Traders Lose

info@babypips.com (BabyPips.com) — Fri, 16 Dec 2011 08:05:20 GMT

Why do certain traders win consistently lose? Here are four reasons: 1. Not having a proven trading methodology Those who consistently lose don’t know key numbers. They have no understanding of support and resistance. Chart patterns are foreign to them. Their definition of risk management is getting margin called. With no proven trading method or strategy, you are doomed to fail. You will end up quitting the game after a string of losses. But there is hope. With the right education, a workable

Biases: It's Important to Uncover Them in Your Trading

contact@tradingacademy.com (Online Trading Academy) — Wed, 14 Dec 2011 05:40:26 GMT

My students will often comment on the difficulty they are having with chasing after illusions that appear in the charts about which they "make up" scenarios and trade upon, ending up with distasteful consequences. More times than not, these illusions are connected to a bias, either one that initiated the illusion, or came on the heels of it. About a year or so ago, I wrote about biases. Let's update the conversation by first revisiting Derek. Then we will include some additional biases that

4 Steps to Recover from Having Blown Up Your Account

info@babypips.com (BabyPips.com) — Fri, 09 Dec 2011 10:28:51 GMT

So you blew up your account? Instead of crying in the corner, please realize that blowing up an account is a lot more common than you think. You've probably heard of the saying that 90% of traders fail in their first year. Now, I don't know how accurate that is, but sad to say, I'm inclined to believe that it's true. I myself have blown up a fair share of accounts, committing all the mortal trading sins in the process. Lack of discipline, cowboy trading, not following the game plan, revenge

Is Trading Hard or Easy?

contact@tradingacademy.com (Online Trading Academy) — Wed, 07 Dec 2011 06:15:40 GMT

It seems straight-forward enough, doesn't it? Well, how you answer this question depends on your perspective. Actually, it could be argued both ways; that is, trading is both hard and easy, depending on your trading process and your approach. Let's take a look at both. I've often said that trading is arguably the single most challenging business venture on the planet. The reason for this statement is quite simply because it is the only business venture where with every tick of the market price

5 Common Trading Biases: Are You Guilty of These?

info@babypips.com (BabyPips.com) — Mon, 05 Dec 2011 09:42:36 GMT

Having biases can severely impair our ability to read the markets objectively and make good trading decisions. The first step to overcoming these biases is to become fully aware of them. Below, you'll find a list of five of the most common trading biases. Which ones are you guilty of? 1. Recency bias Do you often find yourself zoning in on your most recent trading decisions, thereby losing sight of the big picture? Then you, my friend, may be guilty of having a recency bias! Recency bias has a

Manage Your Stress and You Will Better Manage Your Trades

contact@tradingacademy.com (Online Trading Academy) — Wed, 30 Nov 2011 06:51:45 GMT

You may not remember but about a year ago, I wrote about Jackie (a fictitious character) who was having a very stressful time with her trades. It went something like this: Jackie couldn't believe what was happening. Actually, the trade began on a positive note...so she thought. She had seen what she surmised was a price pattern; an ascending triangle, which looked to hit the top of the resistance line several times and the bottom trend line was about to touch. She heard herself say, "... this

3 Common Trading Myths Busted!

info@babypips.com (BabyPips.com) — Fri, 25 Nov 2011 11:11:31 GMT

Whether you're a seasoned trader or just a newbie, I'm sure that by now you've already come across a few generalities about trading. But be warned! Some may have some truth to them but most of them are nothing but myths. Here are three of them: Myth #1: "Try and try. Pretty soon you'll succeed." I'm sorry to burst your bubble but the truth of the matter is, the market doesn't give a cat's litter about your efforts. Perhaps we have Disney to blame for having this fairytale mindset, thinking

Control Internal Conflict for Better Trading Results: Part II

contact@tradingacademy.com (Online Trading Academy) — Tue, 22 Nov 2011 12:24:26 GMT

In Part I , we left Harvey fragmented, frustrated and frazzled, stewing in his confusion and conflict because his thinking and emotions were not in line with what he wanted to do, which for many of you, is the same situation that you are experiencing. You have been working against yourself and have become your own worst enemy. This happens when you are out-of-alignment; and when you are out-of-alignment, it is nearly impossible to trade your best and bring your "A" Game to the platform. We

3 Common Trading Expectations that Could Lead to Disappointment

info@babypips.com (BabyPips.com) — Mon, 21 Nov 2011 15:23:39 GMT

Setting expectations can be a wonderful tool for traders. They provide benchmarks to help us ultimately determine success and failure, and they also give us goals to work towards. However, we must be careful in setting our expectations. Set them too high or unrealistically, and we could just set ourselves up for disappointment. Below, you'll find three of the most common trading expectations that often lead to disappointment. 1. More Trades = Faster Learning Process It's true that taking more

Control Internal Conflict for Better Trading Results: Part I

contact@tradingacademy.com (Online Trading Academy) — Tue, 15 Nov 2011 12:30:58 GMT

Harvey hated when he was indecisive. He called it "wishy-washy." At that moment, he was looking at a very strong high probability setup. It was a 240 minute chart on the YM E-mini. The price action was approaching a significant supply zone that had not been tested for some time. "I know this is a setup that I should take," he heard himself say. But, he was feeling anxious and worried about taking the trade. He even had a trade plan worked out with a 2 contract entry where the 1st target was a

Know Thyself: A Must for Your Trading Success

contact@tradingacademy.com (Online Trading Academy) — Tue, 08 Nov 2011 12:33:46 GMT

The anger Clara felt focused in her temples like a stake being driven into her skull. She was truly disgusted with the fact that she had allowed fear to rule her behavior in the trade...again. She had identified a demand zone on the 60 minute YM E-mini chart that had not been revisited. She went to the 5-minute chart and placed a limit order to enter the trade just as the price action pierced the zone. She simultaneously placed her stop loss one tick below the lower line of the zone...and she

The Three D Process: It's For Your Progress

contact@tradingacademy.com (Online Trading Academy) — Tue, 01 Nov 2011 11:23:33 GMT

The screen looked like it was veiled in a pale blue light,like a dreamscape, and Judy was disheartened to discover that it was all too real. She couldn't believe it. For weeks now she had been doing so well. But there it was in front of her eyes; one of her largest losses ever. In fact, she really couldn't remember when she had lost so much money in a trade. She felt sick to her stomach, her head ached, and she was shaking. It began well, like many mornings before. She went through her morning

What You See Helps Determine What You Get

contact@tradingacademy.com (Online Trading Academy) — Tue, 25 Oct 2011 12:56:59 GMT

"Wow," she heard herself shout. "This price pattern is poised right in the demand zone that I've drawn." Carla was looking greedily at a 60 minute chart on the Euro Futures. The intermediate trend was up, but the intra-day price action was trending downward in the open as a significant pullback from the overnight highs was forming. She had not been expecting this as she had hastily looked at the ES E-mini which she traded more often than the Euro. "This market is going to go up like a hot-air

How The Power Of The Masses Drives The Market

info@investopedia.com (Investopedia) — Mon, 24 Oct 2011 14:21:46 GMT

by Jason Van Bergen The incessant intraday struggle stock market between the bulls and the bears is what drives market rallies and precipitates market declines. Regardless of the style of analysis or system employed by traders, one primary aim of their trading endeavors is to understand the degree of control held by the bulls or bears at any given time, and to predict who should hold power in the near to distant future. Unfortunately, traders' natural desire

Trading Rules: They are Your Safety Net

contact@tradingacademy.com (Online Trading Academy) — Tue, 18 Oct 2011 11:33:44 GMT

Humans, you and I, have been programmed. This programming began in infancy and continues throughout life. However, the most powerful programming takes place in those early years between 0 and 5. This programming equates to beliefs, values, and stories you tell yourself about how life is and came to be. These stories have been constructed much like a script to a play and that play is your life and the scripts to that play are your stories. These stories or scripts can also be termed rules that

Trading With ADD (Attention Deficit Disorder)

editorial@sfomag.com (SFO - Stocks, Futures and Options) — Wed, 12 Oct 2011 14:33:28 GMT

This article written by Kenneth Reid, was originally published in the August 2011 issue of SFO Magazine. Dr. Kenneth Reid holds a Ph.D. in clinical psychology. He has been an independent trader since 1996 and a trading coach since 2002. If you are an active trader who struggles with issues of discipline, impulsivity and consistency, you may have a neurological condition known as attention deficit disorder (ADD). Don’t let the term deficit fool you. Only one of the six types of ADD

Trading Results Begin with How You Think

contact@tradingacademy.com (Online Trading Academy) — Tue, 11 Oct 2011 12:32:47 GMT

Results...you only want positive ones, especially when trading. But, what if you are not getting the results that you want? What can you do to change those results? Well, the first thing you must do is make changes in your thinking. You see, nothing happens behaviorally on the outside without first being initiated or created on the inside. This is how you begin to create new habits and control the errant emotions that cause the bad behavior. You see, results follow a sequential model. In fact,

A Kick Where You Need it the Most

editor@YTEmagazine.com (YourTradingEdge) — Thu, 06 Oct 2011 09:33:36 GMT

This article is taken from the YourTradingEdge magazine (JUL/AUG 2011 issue). Louise Bedford is a full-time private trader and author of ‘The Secret of Writing Options’, ‘The Secret of Candlestick Charting’, ‘Charting Secrets’ and ‘Trading Secrets’. Louise Bedford gets your moving in the right direction. We can cheat on our dreams, just a little each day, and no one will notice. An extra coffee with a friend, another sitcom from the comfort of the couch, a Sunday sleep-in, and blam – another

Emotional Pivots Can Be a Trade Turner

contact@tradingacademy.com (Online Trading Academy) — Tue, 04 Oct 2011 12:07:44 GMT

Jackie had done everything correctly...but something was still wrong. The story was told by her tense neck, queasy stomach and rising anxiety. She had been down this road before, and due to documenting her "internal data" (the thoughts, emotions and behaviors that created her trading results), she had identified that what she was feeling fit into a pattern associated with pulling the trigger on a trade. It seemed that every time she began her trading session and especially as she was about to

What it Takes to Win

contact@tradingacademy.com (Online Trading Academy) — Tue, 27 Sep 2011 11:27:04 GMT

Okay, I'm going to go out on a limb here and make an assumption about you...you want to win; right? Yes, I thought so, but what are you doing to ensure that you in fact do, well, win? So many traders say that they want to win, but so few are willing to invest the effort by either finding out what is required, or once they know, then following through. And, before going any further, we must define what it means to be a winning trader because a large number of you are laboring under a false

Is Your Trading Creating Conflict Between You and Your Partner?

contact@tradingacademy.com (Online Trading Academy) — Tue, 20 Sep 2011 11:32:02 GMT

Allen looked quizzically at the charts on his monitors. For the fourth time today, he had been stopped out and he had only taken five trades. But he smiled to himself despite the four losses because he knew that he had traded this entire session "as" a winner (meaning that he had planned every trade, had traded every plan and he had followed all of his rules – explicitly). He knew that he had achieved a private victory today as he also realized that it was critically important to approach his

Trading Results: What Kind Are You Getting?

contact@tradingacademy.com (Online Trading Academy) — Tue, 13 Sep 2011 11:21:48 GMT

Trading, like other factions of life where you are putting forth an effort and a focus, is about "results." What kind of results are you getting in your trading? Are you frustrated, frazzled and fragmented by consistently doing what you have told yourself to stop doing – like inappropriately moving stops, chasing trades or prematurely exiting trades? Or, are you failing to follow-through on those things that you've said you should do – for example, not having a business (macro) trade plan,

Thoughts: The Building Blocks of Success

contact@tradingacademy.com (Online Trading Academy) — Wed, 07 Sep 2011 12:03:40 GMT

It was a cause for celebration even though to the casual unaware observer, there didn't seem to be much to be happy about. But Saundra knew better. Yes, the trade was stopped out for a small loss and there had been a number of them. In the past, Saundra would have all but freaked out while telling herself that she wasn't very good at trading as her confidence would drop like a barrel over Niagara Falls. That was before when she was overly consumed by thoughts of making profit on each trade

Outcome Thinking: Aiming for the Results You Want

contact@tradingacademy.com (Online Trading Academy) — Tue, 30 Aug 2011 12:05:42 GMT

What kind of results are you getting in your trading? Are you violating your rules because you have been unable to keep your commitments, which have led to disastrous draw downs and massive losses? Well, one of the things that is important in changing this scenario is to recalibrate what you are aiming for by targeting your thoughts to outcome thinking and results orientations. Results orientation is about envisioning what you really want as if you stepped into the future and got it. This is

Let's Talk About Habits

contact@tradingacademy.com (Online Trading Academy) — Tue, 23 Aug 2011 11:48:02 GMT

Sometimes I lie awake at night, and I ask, "Where have I gone wrong?" Then a voice says to me, "This is going to take more than one night." - Charles Schultz, Charlie Brown in Peanuts Have you ever felt like Charlie Brown in the quote above? What I mean is have you ever taken stock of where you are in your trading and/or your life and thought, " ... This is not working out as I expected." Yeah, I have done that, too. It's really quite simple; trading results and the results of your life all

Distorted Judgment and Distracted Thinking Can Ruin Your Results

contact@tradingacademy.com (Online Trading Academy) — Tue, 16 Aug 2011 11:53:37 GMT

His heart pounded like a too-tight base drum as he looked at the setup. He could feel the grip of anxiety that circled his neck like a pair of sinful hands pressing on his throat. The YM E-mini 60-minute chart stared blankly back at him from his screen as Roland considered his options. He had diligently documented the significant drop-base-rally as the price action was coming back into a strong supply zone. His plan was to execute a short on the 5-minute time frame as the price action moved

Trading is Counter-Intuitive

contact@tradingacademy.com (Online Trading Academy) — Tue, 09 Aug 2011 11:27:51 GMT

As the green candles were rising faster than Space Shuttle Endeavor toward his stop, Jim's eyes were no less impressively wide while he fought a compelling urge to move his stop-loss. The price action belonged to the YM E-mini 5 minute chart, which had been trending downward, however, in a highly volatile manner. Jim knew better than to tinker with his stop in violation of his trade plan, but no matter what he told himself, he really wanted to avoid getting stopped out. He had identified what