Forex Education -

Trading techniques that can work for you

A look at the simpler things you can do to help your trading Trading like anything else is about practice, reps, routine, and goals. Without any or all of these things it is difficult to be successful in your trading. Complicating this process slightly is the influence of other factors as well, namely emotions, a desire to make profit, and expectations. For these reasons, it's important not to get too caught up with any one specific goal or expectation, as this is when mistakes and losses can happen. When trading with an effective balance, emotions such as fear, ego, greed and revenge trading are practically non-existent. Only then can you manage to be the best trader you can be and achieve a level of success you are likely looking to pursue. Take your trading to the next level ForexLive The bitterness of reality Unfortunately, axioms and motivational speeches can only get you so far. Once your money is on the line, even an individual who has had months' worth of consistent returns could easily choke or experience losses when they go live. So how can you practice to become perfect? Keep calm and trade Not all markets are created equally and some are certainly more volatile than others. For example, classic markets such as oil, exotic currencies, and cryptos are all classified as highly volatile. While the term carries a negative connotation, volatility can actually benefit experienced traders and some strategies. For example, without any volatility, there would be little chance of making any profits at all, the challenge is finding an acceptable level of this force. By extension, there is a lot that can be gained by simply trading on less active markets. Rather than being priced into big decisions, you can instead gain a valuable chance to analyze and act without the pressure of constantly fluctuating price movements. Furthermore, another benefit of trading across more subdued markets is that that less volatile markets tend to move less, so if you are the wrong side of a trade, you stand to lose less than if you were trading on a volatile market. Learn from your mistakes Everybody makes mistakes, that's why they put erasers on pencils. In the world of trading, mistakes - or more specifically losses - reflect a valuable opportunity for growth and learning. This is why such setbacks are important for growing as a trader. A good practice is also to keep a trading journal, complete with a log of all the reasons that lead you to opening a certain position. This can include the fundamental or technical data that informed that trade. Understanding your thought process in any given time is the best way to make sure that correct and informed decision-making was rewarded and a lack thereof was met with losses. Traders that have routinely found success have managed to find the winning formula through trial and error so it's ok to make mistakes. Experience through setbacks Being mentally tough comes from experiencing losses. A trader who has never known adversity is unlikely to even know their own limits. Rather, most of the negative emotions that traders experience is associated with losing. Ultimately, experience will teach most traders that losing is part of the game. To stay viable and sustain your account, you must look at the big picture and not focus on individual losing trades. You can still be successful even after incurring losses so long as you learn from them and improve. Do not let even the smallest setback deter you from learning as each instance of success or failure is a valuable opportunity for growth. A break from the monotony Many traders like to approach their craft full throttle but it's also important to space in breaks periodically. It is completely reasonable to become burnt out en route to grinding out gains, and thus it's crucial to understand your own limits and need for a respite. Much like other professions, the advent of recuperation and recovery is a time and tested strategy to ultimately improve and condition yourself. Trading is no different and if you are fatigued, winded, or tired, then your body is telling you it's time for a break. Some professional traders say that after three consecutive losses or wins they will stop for a moment and take a walk. This can help take you separate yourself from any trade emotionally and avoid any level of impulsiveness that can lead to even greater losses. - This article was submitted by UBCFX

Trader who sold Bitcoin top has covered his short

A Bloomberg piece that might give some encouragement to those looking for BTC to recover.  Well, maybe, the guy who sold the top and now covered is not all that encouraging: "I don't want to try to ride this thing to zero" Mark Dow shorted bitcoin: "They just saw it was going up and wanted a piece of it. People's imaginations can run further when they're not tethered to facts, when they don't understand the issueIt allowed the bubble to be much larger and much more violent. I saw the psychological hallmarks of it and there came a point where it looked like the fever was breaking." Has taken profit. Here is the link to Bloomberg for more I've tagged this post under 'Education'. Read that quote I've included and internalise it.  Meanwhile, a look at the BTC itself over recent days: ForexLive

The role of luck in trading

Where does luck come in to trading markets? In the previous article, we talked about trading and probability . Continuing to develop this topic, let's talk about trading and luck. What is the relation between these two concepts? Can a trader count on luck to get profit? Is it possible to suffer from bad luck in trading? How random are the results of your trading? Technical analysts propagate the idea that there are sense and consistency to the market and there's much to be said in favor of that. After all, there are trends and patterns on charts that get replicated from time to time. However, there's still a lot of noise, i.e. moves of the price that can be explained by analysts only a posteriori but not as or before they happen. This noise can mess up with a trader's position. On the other hand, if things go just as a trader thought they would without any surprises from the market, a trader may consider himself/herself lucky. There seems to be a big element of randomness here. Are there any traceable borders of the randomness we observe in financial markets? Maybe the swings of the price, even the minor ones, are not random, it's just that people are not able to see the governing principle? How strongly a trader's success depends on skills and how much does it rely on luck? The authors who researched this idea a lot - Nassim Taleb, Michael Mauboussin, and Robert H. Frank - came to the unexpected conclusion that talent and efforts are not enough to succeed in the modern world, you should actually find yourself in the right place at the right time. It means that if we look at some traders who absolutely nailed it, it might seem that their success is the natural result of all the actions they have made. The reality, however, is much more complex. Most great achievements are to some extent marked by randomness. As the sociologist Duncan J. Watts cleverly indicates in the name of his book "Everything Is Obvious: Once You Know the Answer", people have hindsight bias and underestimate the role of luck, randomness, chance, or whatever you call it. The conclusion is that a trader's performance is a summary of skills and luck, the proportion of each unknown. Make it work So, it's not all up to us and the role of chance in our life can be big enough, even though we don't always realize that. Where does this idea can lead? It is abundantly clear is that one cannot rely on the mere luck while trading. Otherwise, there would be no real need for the word "trading" as "gambling" would suffice. A person can shape the world around him and doubting this idea will get you nowhere. At the same time, remember that you are not the master of the market and you can't wield it as you wish. The price won't go up just because you opened a buy trade and in no way can one trader beat the avalanche of the market. The sin of overconfidence will be sternly punished by the market. So, what's the best option here? You have probably heard about a pattern called the Pareto Principle (we wouldn't go as far as to call it an objective law). It says that 80% of the results are achieved with only 20% of the total efforts. That, of course, doesn't mean that you should twiddle your thumbs and reduce the number of efforts you make to achieve your goals. What it means is that by definition not all of your trades will be successful and only a fifth of them will likely account for the main chunk of your gains. Evidently your risk/reward ratio should be better than 1:1. Another idea to ponder is related to the time you spend on trading. If only 20% of it is really efficient, it's worth examining what you do during the remaining 80% and try to optimize it. There's always a way to improve productivity. For example, maybe you can spare a while for the analysis of your own trades? To sum up, we can say that as with many things, it's hard to give an unambiguous answer about what really leads a trader to success. Various factors are so closely intertwined that it's hard to separate them. It's a fact that good mathematicians and well-read economists won't necessarily make successful Forex traders. An understanding of price action mechanics comes to a trader over time. Experience will help you develop market intuition and an ability to control your emotions. And you'll definitely need some luck, but the necessity of luck should in no way limit your work on self-improvement. Remember that the disciplined risk management, the healthy mental state, reasonable expectations and actions, and the willingness to learn and practice are the things which will help you use your luck with 100% efficiency. P.S. Good luck in your trading!  This article was submitted by FBS. ForexLive

Trading and probability - odds in your trading

The psychology when it comes to making choices "Probability is not a mere computation of odds on the dice or more complicated variants; it is the acceptance of the lack of certainty in our knowledge and the development of methods for dealing with our ignorance." ― Nassim Nicholas Taleb, Fooled by Randomness: The Hidden Role of Chance in Life and in the Markets Forex is all about choosing a trade idea with the highest probability of success. However, human intuition and common wisdom can be rather deceitful and lead to poor judgments. In this article, we will revisit the main laws of probability that can be applied to trading and learn from them. The flaws of intuition The problem is that many times when we go with our intuition without giving it a deep thought, we make a poor estimate of probability. Let's resort to the prospect theory developed by Daniel Kahneman and Amos Tversky. This theory explores the ways we make decisions which are associated with risks. Imagine that you face a choice: 1. A 75% chance to win $100 with a 25% chance of getting nothing. 2. A sure profit of $70. There's one more test. This time necessary to choose between: 1. A 75% chance of losing $100 with a 25% chance of losing nothing. 2. A sure loss of $70.  Logic would say that a risk-averse person would choose option 2 in both cases (limited profit plus limited risk). However, in reality, the majority chooses 2 in the first choice and 1 in the second choice. The prospect theory shows that people overestimate the probability of getting no gain but overestimate the chance of losing nothing. They seek to reduce their risks and in doing so they may get a smaller profit and a bigger loss.  In other words, losses psychologically affect people more than gains. If the probability of success is low, people tend to risk more, while if the probability of success is high, they, on the contrary, are reluctant to take risks. It's clear, that to maximize utility, one should do everything the other way round. The same bad tendencies are observed with losses. The higher the probability of loss, the more people tend to risk. When emotions are ruling your trading decisions, you are not really trading, you are gambling. You are tempted to limit your profit and let your losses run. The solution that can help improve the situation self-control, a decent trading system (we'll return to this later) and the respect of risk management. Amanda Cox, the editor of the New York Times' The Upshot, provides a nice visual of the human fallacy in judging probabilities: The problem arises when we move from probability to predictions and actions based on these predictions. If we estimate the chance of profit by 80%, we may be carried away and disregard a protective stop. Even though it's hard to think probabilistically, traders should make this effort. The gambler's fallacy Let's make sure that the concept of probability started to sink in. Imagine that you toss a coin. The outcome is random, so the probability of either heads or tails equals to 50%. For example, you are betting on heads. Will the probability of your success decline after 5 heads in a row? The answer if no, it will still be equal to 50%. The reason is that we don't count the probability of several events at once, but start anew with an independent event, so the possibility of success is 50% each time. This is called the gambler's fallacy (the mistaken belief that, if something happens more frequently than normal during a given period, it will happen less frequently in the future) and was witnesses in Monte Carlo often enough.  Traders should also remember it when chilling after a set of gains or brooding over a series of losses. Befriending mathematical expectation Of course, a trading decision is more complicated than a coin flip. And yet, it all comes to probability. The goal of a trader is to build a trading system with a positive expectation and combine it with sound risk management. Regrettably, the maths doesn't allow us to predict the future performance of a trading system. All we can do is to study historical data gathered during the period when you backtested your strategy. The formula of positive mathematical expectation will be something like: [1 + (W/L)]xP - 1, where W is the amount of average winning trade, L is the amount of average losing trade and P is the probability of winning. Remember that mathematical expectation is not predictive in nature, but a system with a positive expectation is your basis for successful trading. The other crucial element is proper risk management. Incidentally, risk exposure is the one thing we can actually control in trading with tools like position sizing, risk-reward ratio, and stop loss orders. Risk management allows maximizing the gains provided by the trading system with a positive expectation while limiting risks. It's wise to use your power when it can be used and make it yield you the benefits. It's a way for a trader to stop looking for a "holy grail" (a 100% success system) and start actually making profits ― thinking probabilistically as he/she is doing so.   This article was submitted by FBS.ForexLive

How to best view the emotions you feel while trading

Learning the role emotions play in your trading How are you trading at the moment? Or, more specifically, how are your emotions affecting your trading at the moment? Take a moment to ask, 'How do I feel when I am trading well as opposed to how I feel when I am trading badly?' Trading is a very emotional pursuit. In fact, you may have reached the conclusion that you need to remove the emotions entirely from your trading. This idea is the birth of the automatic trading robots. The thinking was that the emotions of a trader are getting in their way and if we can just entirely eradicate that from the trading process then trading will become easy. Now, this may well be the case for automated high frequency trading reacting quicker than humans, but many traders will have their own story of trading robots they have bought. The 'whatever you call it' turbo or Max robinator FX 2099. You may well have your own experience of that sure fire robot you bought back in 2010. All you had to do was sit on the beach and drink the cocktails bought to you. The dream probably lasted all of 3 weeks. My dream lasted until about day two.  The problem of course is that pure logic has it's weaknesses. In fact there are times when it is just stupid to be purely logical. The latest findings from neuroscience is that we should combine both our reason and our emotions.  Neuroscience sheds some light on the role emotions play in our decision making Now neuroscience is a relatively new science. The brain has been relatively poorly studied and it is only in the last twenty years or so that the science has really developed. The most up to date thinking is that as information comes into us through our senses that is evaluated by the amygdala part of our brain. The information is then given an emotional marker or label by the amygdala. Now, once an emotion is tagged to the event, the information goes up to the Cortex. So, in effect, we are only evaluating what we have already had a feeling about first. We feel first and think second. This is obvious to us when we consider the type of advertising that works. To sell a product a company engages our emotions and feelings and gets us thinking and feeling first. Adverts don't give us a list of pro's and con's about a product because we don't think in a way that is entirely detached from our emotions. Instead the adverts give us a feel, the music, the images etc and that is what prompts us to buy and then to think about the sale. The bottom line is that we feel, before we think. So, you see the issue?  We can't trade without emotion. It is a foolish approach for us to try. So, what purpose do our emotions have. Ok, emotions actually give us information by making us feel before we  think. That helps us respond quickly. So, if your feeling fear you will respond quickly to avoid the threat or danger. That feeling can speed up the whole process of reasoning. Emotions also help us to focus on what is important. We are drawn to respond to the greatest threats or dangers through our feelings.  Furthermore, emotions also help us to have confidence and competence. A competent trader is a confident trader and, usually, a profitable trader. Emotions are key in decision making Accept that all your emotions are very important in making decisions. Now, extremely strong emotions can hinder our trading, for sure. They need addressing. However, emotions are not your enemy. They are your friends. So start to think of emotions as your allies and not your enemies. Use the emotions you are feeling as you would a data feed. So, if you are feeling fear in a trade what does that mean? Perhaps you are over leveraged and the fear is warning you that you are in danger. Are you feeling confident? Perhaps that is telling you that your analysis is correct.  Maybe you lack confidence in your trading? Perhaps that is telling you that you don't have enough experience yet and you need to learn more. Listen to your feelings, and don't ignore them. See them as your assistant, rather than your enemy. Conclusion Emotions are there to help us, rather than hinder us. We have all heard about EQ - or emotional intelligence, and that is tapping into that emotional part of us. It is being able to reason emotionally.  Now, emotions can be out of control and they can be totally indulged. For example, if you feel angry it wouldn't always be appropriate to act on that anger. However, reasoning emotionally and being aware of your emotions is much more in tune with the way we actually think. Perhaps you are needing to learn to stop trying to suppress and ignore your emotions and to start listening to them. Perhaps they are trying to tell you something that you have been ignoring.

The greater the story, the greater the bubble

The greater fool theory explains almost every bubble Some things have an intrinsic value. The most-obvious example is a stock with a dividend. The absolute floor for an equity is its dividend and so long as their is a profitable business behind it, the value is a multiple of that dividend. Other things don't have an intrinsic value. This includes virtually everything that doesn't produce a yield. Oftentimes, prices of those things rise and fall based on future expectations of what profits or yield might be. In other cases, there is an estimation of utility. Oil, for instance, can be refined into gasoline which can be used to move things or for dozens of other uses. Oftentimes there is a dispute about utility or a dispute about future profitability, which can lead to a dispute about prices. One way to resolve this is a model but oftentimes that's so fraught with assumptions that it's useless. So how do you establish prices? Obviously, via the market. This is when storytelling, which is another way of saying a sales job, takes over. Cryptocurrencies are an obvious example. A Bitcoin has no yield but it has some utility. To some, that utility is replacing the US dollar as a global transparent currency. To others, it's a way to facilitate transactions. And for others still, it's a handy tool for criminal transactions. How you price it then, depends on how you view the future utility. Or does it? Another way to price it is simply looking at how others view it. You might believe that all of those utilities are baseless but if you believe that others are buying it because they believe those things, then it's rational to buy. That reasoning is why I argued more than a year ago that Bitcoin wasn't a real currency but that it was still going higher. The only trade on BitCoin is the hype trade. The fundamentals don't matter. The only thing that matters is how enthusiastic the true believers are. I also touched on that here: This is all called the greater fool theory. The idea is that something can always rise so long as there is another person who believes it will. You can argue that Bitcoin was simply a great story. It was full of buzzwords about transparency, trust, tracking, efficiency plus it was just complicated enough that it wasn't accessible yet alluring in the way that all technical innovations are. The price essentially tracked the rise in its exposure. As more people learned about it, a certain portion invested. The problem is that eventually you run out of people. For crypto, a month or so before the top, I remember talking to a distant relative who is an absolute blowhard. He had just bought some and I told my wife that had to be the beginning of the end. Other people were telling stories about their grandparents were asking them how to buy crypto. In comments this week, Ethereum founder Vitalik Buterin touched on this: Making buy/sell decisions based on what you hear from people on the street sounds ridiculous but some of the most famous traders are just that. Joe Kennedy, John F Kennedy's father, famously said he sold his entire stock portfolio before the 1929 crash because a shoeshine boy gave him some stock tips. And he figured that when the shoeshine boys have tips, the market was too popular for its own good. Here's how John Maynard Keynes explained the Greater Fool Theory: Imagine a beauty pageant, where the judges knew that, because beauty was in the eye of the beholder, the contest would be decided on the judge's perception of beauty. Someone who wanted to predict the outcome would have to assess the judge's perceptions, not the contestant's beauty. As a result, your vote for the winner would not depend on who you thought was prettiest. Instead, your vote would depend on how you thought the judges would vote. How do you trade a bubble? In anything where there is no intrinsic value, utility or there is so much uncertainty that it's impossible to evaluate, there is no real analysis of the market. Instead, you are simply evaluating what other people think. The great bubble at the moment is in marijuana stocks. The story is that it will be legalized. That's already happened in Uruguay and in October it will happen in Canada. That set off a bonanza of speculation about how companies will make a mint selling marijuana. Pot stocks have absolutely soared. It started last year in Canada with some producers rising 10x in a few months. A second wave of the bubble has kicked off on the belief that marijuana will eventually be legalized globally. It ramped up with the Nasdaq listing of Tilray; it's the first US listing of a pot company and it's average a 15% gain per day since it's was launched. Someone who bought on the IPO, or in early Aug, is up more than 500%. Here's the problem. Marijuana is extremely easy to grow. It's called weed because you can grow it in a ditch. Sure, the quality might vary but if you could grow a lower-quality iPhone in your back yard, then Apple wouldn't be a trillion dollar company. But in a bubble that doesn't matter. Marijuana legalization is a great story. People undoubtedly spend a lot of money on pot and companies could make money doing it. It's not a story I believe yet it's compelling enough that fools around the world are going to believe it. ForexLiveHere's the Google search trends chart for 'weed stocks'. The lesson is simple. When you're evaluating some assets, you don't necessarily need to be able to make sense of them. You are just evaluating the story. If it's compelling enough, the asset will continue to rise until the supply of fools is exhausted. Simply: The price you should buy something isn't always its intrinsic value, or utility -- it's what you think someone else will pay for it.

How to take your trading to the next level

Climbing the path of improvement All of us want to keep improving in our trading, so how can we keep continuously developing? We achieve this by building on our strengths and working on or around our weaknesses.   The first thing to do is to be brutally honest with yourself and review these key areas: Your Profit and Loss balanceHow do you trade? (Entries, risk, and exits)What are your strengths?What are your limitations?What do you need to improve Be honest in your evaluation. What kind of trader are you? Intraday or more positional. In the same way that some athletes are sprinters and others are long distance runners work out and decide which trading style suits you.  Once you have evaluated yourself soberly, now look at how to take your trading to the next level. Imagine what the trader that you want to be looks like. What behaviour would you have? How would you trade? Now imagine that trader is given a score of 100.Now evaluate what score you would give yourself out of 100?Then ask yourself, how did you get to point 2? How did you become the trader you are?Now say to yourself, how do I improve my score by just 5 points. We can then focus on our strengths and work around your weaknesses. Now, your temptation will be to purely focus on your weakness, don't. The key to your trading greatness will probably rely on your strengths being used more. Now, as a child I played soccer in the UK and I was right footed. I worked on my left foot over and over again until I could kick with both feet. I worked on my weakness and I was a good footballer. However, for me , my strength is my ability to speak. I have always been a good speaker,  it is just something that came naturally to me. So, over the years I have focused on my strength of public speaking and as a result I often end up speaking in public, because I have worked on that natural strength. I know now that you should pursue your strengths more than you should try and correct weaknesses, at least after a point (some weaknesses will destroy you if left unchecked, like over leveraging).  If necessary, work around them. We are a tennis family with everyone, apart from me, being very good at tennis. So, if you look at Rafa Nadal when he plays he used to run around his backhand a lot to try and hit as many forehand shots as he can. Why? Because he has a wicked forehand that puts so much topspin on the ball it rips up and high and into his opponent. He plays to his strength unashamedly, you should too. So, yes improve or work around your weakness but your number one goal is to play to your strength. What's your niche? Where are you killing it in your trading? Work it out and do it more. Play to your strengths Are you having lots of winning trades by focusing on the squawk during the day? Well, do it more.  Perhaps, you notice that you are a brilliant positional trader and when you hold trades for a week/months or more you tend to have a higher percentage of winners well pursue that.  So ask yourself, 'what went well today/this week/this month?' Well, do it again next day/week or month. Don't ignore your weakness Have you lost money from poor risk management? Well, address it. Have you been trading in a too emotional state, well think how to manage those emotions. Write down your new approach  Finally, jot down a new approach that you are going to take going forward.

Respond, don't react. (And, remember to do your homework)

Respond to your trading environment, don't just react Anyone can react, but only a wise man responds.  A desire to react, in the moment,  to our trading environment can be compelling, unexpected and catch us by surprise. As traders we face a constant battle with our self control and a great deal of trading is about controlling strong urges that we have to trade. Often times we need to prevent the strong urges that we have to trade from influencing us. The reaction part of us happens almost instinctively. So, in order to evaluate our desire to trade we need to pause. By inserting a delay into our instant reactive desire we can grow in self-control and discipline. You might recognise this. Have you ever put on a trade, and then removed it only to put it back on 10 minutes later? You are  possibly oscillating between reacting and responding in that moment. We don't want to just be reacting to the markets, we want to be responding. The central pillar of responding well is paying attention.   Pay attention and be self-aware Top performers pay attention. It is very difficult to perform well at anything if you are not paying attention. If you are both attentive and self aware you will be better able to manage your habits, your awareness and your ability to be self controlled. It will also give you the ability to empathise.  What has that got to do with trading, you ask? Well, this is a crucial skill in the markets as you start to see what likely moves the market will make next. If situation X occurs then country Y will likely do Z.  Adam demonstrated this in his recent interview posted here with BNN on the Canadian. It can simply be getting a 'feel' for the market. Think of other countries, how will they respond to their situation. At the moment think of China - what will happen next for them. Think about eventualities and empathise with their situations. It will help you be a better trader. Attention and self-awareness will also help you be aware of your environment. Every day we receive a wall of information. The feeds tick away, the squawk is squawking and analysts are responding. You need to receive this information mentally and then you need to be able to understand it. The problem we have is that when stress gets too much, we lose out ability to make proper sense of our trading environment. We either freeze or just react. In either freezing or reacting we will have stress. Uncertainty and fear will go hand in hand with reacting. The state we want as traders is that we don't want to react we want to respond. A reaction is non-conscious. A response is considered, deliberate and managed. The good news is that we can improve our attention and awareness. So, this week I have posted a number of posts on our mental state of mind. Why not go through them over the weekend and, if you are not already doing them, use them to stimulate your thoughts on practices you could implement to improve your trading. Have a great weekend and thank you for all the great contributions individuals have made on this thread over the last week. Developing the right frame of mind for trading. Thinking straight: Deal with negativity? Born to win? Developing a strong trading mindset Enjoy your homework ;-) ForexLive

How to develop a strong trading mindset

A strong frame of mind We have already established that trading is stressful (as if we needed persuading), so now let's look at some strategies for helping us to deal with stress. We all need stress to motivate us, so we don't want to avoid all stress. We just want to be able to cope well with stress.  When we have a losing run or a heavy loss the first reaction we have is a combination of disbelief and anger. It is an emotional response. Now, we don't want to just repress these emotions. They drive our behaviour and can cause us to react. Sometimes we might want to jump straight back into the market to 'get back our losses'. We look for the first half set-up we see, price is at a weekly support so we put in a buy, or price has spiked 40 points on the EUR/USD we jump in. This is almost entirely an emotional response. As we have seen this is the fight or flight part of our brain in operation as we are in a panic mode. We are angry, emotional and in this state we are highly vulnerable to making poor decisions. Perhaps, we could lose months of hard earned profit in a 'moment of madness'. Except, it is not madness, it is just an emotional reaction and it is understandable. So, the first step in dealing with this is to recognise when you are in this state. Virtually all traders will recognise this state and be able to share stories of how this has affected them. You need to move out of the emotional state of mind into the acceptance mindset. Let the loss sink in, accept it, and now you are ready to move on. Here are 5  tips to help you develop  a better frame of mind.  Tip 1 Record your thoughts and feelings at the end of each day. What are you thinking and how you are feeling? Perhaps you had a heavy losing or winning trade? Write down how you are feeling. This action itself is a helpful mental exercise to help deal with some of these emotions. Tip 2 Accept that a losing trade or a losing run is temporary. Furthermore, realise that you can change it. Even If you have never been profitable as a trader, you can change that. Trading is teachable, like any skill. Like riding a bike, at first you fell off, but then you got it licked.  Tip 3 When you are in a very negative state of mind, which you will tend towards during a losing streak, try to look at some of the things that are positive for you. What are your strengths? Your positives? What things can you control? Tip 4 Get some rest. If you don't rest, you will burn out. Are you getting enough recovery time? Make sure that you factor recovery into your day. This is recovery for the nervous system, so a gym session is not the answer here. You want to have a definite rest : Sleep, or a time of quiet. Perhaps try some breathing techniques. Allow yourself a break. Why not break in between trading sessions? Don't just hammer at it for 12-15 hours straight. Your performance will suffer and your energy will flag. Get a decent night's sleep too. Rest will help your performance. Make sure you take holidays. Tip 5 One of the worst things I find about trading is that it is a lonely pursuit. `I love people, teamwork and banter.  Sat at the terminal, little people contact and it can become a sealed little world. 99% of the people in your life can't relate to trading and either think you are a hero or a villain and then a lot of the correspondence you have is one way. So, get a support network if you don't have one. Could you pair up with someone else in a performance activity and compare notes? Is there a top-level sports person you could meet with and talk about your performance and state of mind with. What about meeting up with some of your online trading acquaintances?  Is there a local meet-up you could arrange in your city? ForexLive

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