Forex Education -

Ray Dalio helps put recent economic & market moves in perspective

Ray Dalio is the founder one of the world's largest hedge funds, Bridgewater Associates. He is one of the 100 wealthiest people in the world. If you are unfamiliar with how Dalio understands the economy and markets (ie. his mental model of how these work) this article he shared over Christmas is a good read. To whet your appetite: At the biggest picture level, there are three big forces that interact to drive market and economic conditions over time.  They are  1) productivity growth,  2) the short-term debt cycle (which typically takes about 5-10 years), and  3) the long-term debt cycle (which typically takes about 50-75 years).   These factors also affect geopolitics both within and between countries, which also affects the market and economic conditions. Here is the link where you can read it all  ForexLive

17 things we should have learned since the financial crisis

The global economy doesn't work the way we thought I stumbled across an aged but relevant post from Mark Dow about 15 things global macron investors should have learned from the great financial crisis and the aftermath. It's a good list and I pretty much agree with all of it, including this one: "Oil matters less. It didn't help the consumer as much as forecast when it fell, and didn't hurt GDP as much as others suggested, either. Oil intensity of GDP or share of consumption basket is far lower than the levels most observers-consciously or unconsciously-had anchored on." If you look at them as a whole, the lesson is that the short-term narrative is often overblown. Frequently, one part of the economic equation changes (commodity prices, fx prices or politics) and we're led to believe that changes the result. In reality, it doesn't so the lesson is to look past almost everything. To his 15 lessons, I'll add two: 1) The economic impacts of FX moves are overrated. The global economy doesn't react to FX changes the way most thought. Drops in many currencies haven't led to big (or sometimes even small) pickups in manufacturing and exports. Companies can hedge and absorb much more FX pain than thought and investment decisions are rarely made based on the current prevailing FX rate. 2) Where's the inflation? Starting from Day 1 of the financial crisis when interest rates were first lowered, there were people howling about the coming inflation. It's not here and even with a much better economy and still-low rates, it doesn't appear to be coming. Globalization, offshoring and automation are the dominant economic themes of our time and they're all deflationary. What would you say we should have learned by now?ForexLive

How the big players operate: Their psychology, motivation and objectives

The big players don't care about your stops The truth of the matter is that retail trader's stops don't factor on the radar of bank traders at all. In-fact professionals don't even see retail stops on an individual level, nor could they care less because the sizes are too small. Big players care about groups of stops That is not to say, professionals don't care about stops. Stop orders are very important to the institutional traders on an aggregate level - that is, they care about where large groups of stops are sitting. This could happen when, for example, a large number of retail trader's stops are sitting at the same level, or it could be where a corporate or fund has orders placed.Even though a bank trader only has knowledge of their own book, this grouping of stops is generally happening across a number of banks at the same time, so they will make assumptions about the positioning of the market. The price is attracted to the supply at key levels Once the trader is aware of the supply of liquidity at a certain level the market will often trade towards it. Why? Two reasons: The motivations of the traderLiquidity For bank traders, their first motivation is safety - they don't want to lose money. The key levels are where there the liquidity is the deepest, where it is safest. If a bank trader needs to execute a trade they need a supply of orders to execute it against. If there is no liquidity at a certain price then they will have to rapidly re-adjust both their thinking and their positioning because they are at risk.Conversely if there is plenty of liquidity at a certain price, then the bank trader can go about their business without fear of the market getting away on them while they are holding a large position they are obligated to execute. This way they can minimise and chance of losses and make money from the order execution. The big players are not so different from you It's interesting to note that while understanding the flow can be helpful, the bank trader still uses: Pattern recognition Support and resistance Fibonacci levels The professional's main asset is experience in interpreting the markets, funds and time not any special information. Learn more about how to use key levels in your trading. About the Author Sam Eder is a currency trader and author of the Definitive Guide to Developing a Winning Forex Trading System and the  Advanced Forex Course for Smart Traders  (get free access)

How to trade what's in front of you with a complex exit strategy + cheat sheet

"Don't worry about what the markets are going to do, worry about what you are going to do in response to the market" - Michael Carr, Market Wizard Exits are something that a lot of traders struggle with. For example, have you ever had the price go within a few pips of your target, only for it to fall away and you get stopped out? Or perhaps you have had a news event turn a winning trade into a loser? Or you simply give back more profit than you think you should. The good news is that by improving your exits you can minimize the impact of these issues on you trading account. Regarding exits here are a few points to consider: Objectives. You need to be very clear in what you are trying to achieve. What size moves are you looking to capture, and how much profit are you willing to give back to achieve your target? This can actually take a lot of soul searching to get right. Market Types. The markets have several different types, such as bull normal, bull strong, bull volatile, sideways volatile, side quiet, bear normal etc. You want to determine the market type, and apply the right exit to the right market type. Don't try to be "right". If you are making your exits an all or nothing decision, you are trying to be "right" that the market will reach a certain point, or do a certain thing. Instead, it's good to scale out small parts of your position at a time. Risk management. You should have risk management rules, in order to keep your profits and avoid losses (this is much more than a stop-loss). Key Levels. Sometimes you can see exactly where the market will likely turn. It can be good to plan ahead what to do when the price reaches these levels. Overall, this may seem a little complex - that's because it should be.  When it comes to trading, you should have complexity in at least two areas: exits and position-sizing. As the market will often (if not always) change while your position is running, you need a series of rules that allow you to trade what's going on in front of you. Otherwise you can't respond effectively, and you're potentially going to miss out on profits/ having a losing trading system. Remember: it all starts with your goal, so begin by getting very clear on your objectives and then look to devise an exit strategy that achieves them. About the Author Sam Eder is a macro currency trader and author of the Definitive Guide to Developing a Winning Forex Trading System and the Advanced Forex Course for Smart Traders (get free access).

How to be a more consistent trader

"Now I spend my day trying to make myself as happy and relaxed as I can be." - Paul Tudor Jones Consistency is underrated. When a trader is consistent, good things start to happen. The trader is more confident They make less mistakes They can allocate more capital to their trading. Consistency is not a chimera. There are steps a trader can take that bridge the gap between irregular and regular success. Defining consistency for traders Consistency is simply the ability to produce steady profits. For some traders, this may be the difference between winning and losing. For others, smoothing out their performance leads to a more relaxed and happy state. For a few, the cream of the crop, it provides them with an opportunity to manage money. Mental consistency vs. technique Becoming consistent requires both the correct mental strategies and the right trading techniques. After all, it's no good being all 'Zen' if you don't actually know what to do, or how to do it properly. While it is easy to say psychology should be your focus, in practice you also need a solid foundation in trading correctly. Working on your techniques hand-in-hand with your psychology is a more effective way to develop consistency. Once you have the technique(s) you need down pat, you can then focus on achieving peak performance. Let's start with the low hanging fruit. That is the stuff that will make the biggest difference across the board in the shortest space of time. Trade the right strategy for the market type Many traders engage in the search for the Holy Grail trading strategy. That is a trading strategy that works in all market types. Instead, it is much easier to define the market type first, and then trade the appropriate strategy. You can see here market types marked on this USDJPY Chart. If you took the same approach in all market types, you would be pushing the proverbial up hill. If you take the right approach for the market type, you will find things click into place nicely. Use multiple exits The markets don't go in a straight line to your profit target, nor do they always do what you expect them to. This makes having multiple tools in your toolbox for managing your trades doubly important. At the very least you want to have these: Initial targets. Trailing stop. Trailing stop for a fast moving market.An exit rule for when it goes close to your profit target but starts to drop (so you don't give back your gains).Exit approach for once the price hits the objective, and you think the move will continue (to capture big wins). Adding different exit methods to your system is perhaps the easiest way to improve consistency. Don't neglect this step. How the big players operate: The psychology of key levels Understanding how the big players operate, their motivation and psychology, will give you insight into why the market ranges, why it breaks out, and why key levels act as support and resistance. With this framework to guide you, you can make smarter decisions that align you with the professionals instead of fighting against them. You will find this leads to a much greater degree of consistency. Four Part Video Short Course If you want to become a more consistent trader by implementing the ideas above, you can get started with my free short course. The course is composed of four in-depth video lessons, and includes some bonus material such as a "complex exits cheat sheet" and a video on how to time an entry in bull and bear market types. Here is the first video: Short Course: How to Be a More Consistent Trader - Part 1 Any questions or comments, please do let me know. Cheers, Sam (Brief note on risk management and position sizing: The "how much" you trade is responsible for your profits in the market. In order to be consistent, you need to have your position-sizing and risk management rules aligned with your objectives. While this is not included in the short course (because of the depth of the topic), it will be covered in depth at a later stage.) About the Author Sam Eder is a currency trader and author of the Definitive Guide to Developing a Winning Forex Trading System and the  Advanced Forex Course for Smart Traders  (get free access)  

How to make 1500 pips on a trade

Morgan Stanley absolutely nailed this one One month ago, analysts at Morgan Stanley said to buy GBP/JPY and yesterday the pair hits its lofty target. On November 3, analysts issued a note to clients saying to buy the pair at 128.30 with a target of 144.00 and a stop at 124.70. The trade risked 360 pips but it was only underwater briefly on election night. That was the gut-check time for the trade and it would have been tempting to close it out as the results were rolling in and the market falling apart. But from there it's been smooth sailing, with only three minor daily declines on the way to a 1570 pip gain. Along the way, they moved up their stop to 133 and then 136 to lock in a profit. What's more instructive is to put the trade in perspective. Analysts at Morgan Stanley were talking about GBP/JPY longs since at least September and in that time, the pair fell more than 1000 pips, including on the night of the GBP/JPY flash crash. They have been also trying to short the yen via EUR/JPY and were stopped out of longs in that pair in September and October. But the combined losses on those trades were around 400 pips. And when they saw that yields were rising and the yen weakening post-Trump, they stuck with their long-held convictions for a big gain. Our friends over at eFX Plus track bank recommendations. Check them out here .

Revisiting Tom Basso: How important is your entry in trading? - Part 2

by Justin C. Paolini Basso Test Variation - Pure Random Random Entry The first robustness check we performed, was to make the entry method more random than Basso's. We ran the iterations again and the algorithm acted as follows: it randomly extracted numbers from 1 to 20 but issued a signal only if it hit a "1" (Buy) or "2" (Sell). So this system is effectively random in time, direction, and price. This system is not in the market the whole time. We also lengthened the ATR. Instead of using a 10 Day ATR, which is much closer to the current market's volatility conditions, we adopted a 200 Day ATR which should be less biased by volatility clusters in the data. Also, instead of using a fixed 3*ATR initial & trailing stop, we used a 1*ATR Initial Stop and a 2*ATR Trailing stop. The idea is to give back less profit in trending situations, and get out of the market early in choppy situations. "Random Random" Trades with our new rules, coded by Craig Consulting on MT4 An example of the output in Excel - our own Random-Random Entry Running various iterations of our "Random-Random" system, we get much closer to the "random" results we would expect. Some interesting outcomes - -Results end up being much more variable. Equity curves are more of a mix between end profit and end loss compared to Basso's settings. This is to be expected because we are voluntarily adding randomness to the method. -The total number of trades is higher. Of course, we are not in the market as long as Basso's system was and we have tighter stops - so we have more trades. This increases our sample size and adds robustness to the results, we think. -Using a smaller trailing stop than Basso, our drawdowns are smaller.Yet our average profit is still larger (double) than our average loss. So the trailing stop is still very much working in our favor. -The profit factor is strangely still positive. We wouldn't expect this if the market was purely random. And the result wasn't just confined to this iteration. It was consistent over all runs we performed. At this point in our journey, Craig & I started to see through the data. We were effectively observing Forex's "tendency to trend" characteristic that commodities also possess. So any variation of a random entry and trailing stop should yield similar results. The trailing stop is in fact a simple trade management vehicle to "capture trends". And we continued to find this tendency through more and more testing.* The Most Important Thing After thinking through our observations, we re-ran the tests but this time we gave the random entry generator a "trend filter". Of course, one could debate what kind of trend filter was used because there are many variations on the theme but we wanted it to be as robust and non-discretionary as possible. We told the algorithm to look for situations like this: The non-discretional trend-filter, as applied on USD/JPY daily chart since 1/1/2015 As with many other tools, it's not perfect but it gets the job done. The unshaded areas are considered "range" periods. When we applied our random entry to the filtered market states, remember that: entries were still random in time, so the beginning of a trend state does not imply a trade initiationentries were still random in direction, so the model can also look for longs in downwards trends and long in upwards trends. We were attempting to maintain the random-random nature of the signals to verify further whether "filtering trending markets" could enhance the performance of the signals. Our logic was as follows: if the market state is truly the most important factor, then by only entering the market in those moments (albeit randomly) we should get better results than entering at random just anywhere, anytime. In other words, we're trying to "help" the trailing stop do its work. Here is a sample of the results: Sample run of Tom Basso's random entry and trailing stop combined with our trend filter We applied Tom Basso's random entry settings combined with our Trend Filter and these were our main takeaways after multiple runs: The profit factor was more stable.Wins were much higher on average which compensated for a lower hit rate.End profit distribution skewed more to the positive side when compared to Basso's original random entry. The trend filter worked to a certain extent but to really find out if what we were seeing was non-random, we needed to verify the opposite: the results should be "bad" if we used a random entry with the trailing stop (best for trending markets) inside a range. Some recent "range" situations as identified by our non-discretional trend filter. A range is defined as "not in trend". And here is a sample of the results: Sample run of a random entry in a "no trend" environment From this set of runs, the main takeaways are evident: The final profit was consistently negative which was interesting considering that we were using "random" entriesThe profit factor was decisively lower than on any other random entry testThe average win was no longer consistently larger than the average loss. Summary Conclusions After all of these test runs, it's quite easy to forget the original objective of the test runs. We were attempting to find out how important the entry was for trading FX. Our main conclusions were: A random entry with a volatility-based trailing stop on average makes money over long enough sample sizes in the FX market and commodities because they trend for extended periods.Random entry positions get chopped up inside a range.The Market Type (Trend or Range) is the overriding variable affecting system performance in our tests.So what are some of the implication for traders?Focus more on identifying market types and then deploy an appropriate trading system in line with that market type. While a purely random entry strategy may be viable on paper, it's impractical and tough to stomach in real life. You can do much better than random for an entry strategy - and still not spend most of your time on refining it.Keeping losses small is not enough of a strategy to make money over time since you can easily "die from a thousand paper cuts". Over to You This is our first evidence-based piece and I do need to thank our resident programmer Craig Drury for his efforts. We would appreciate any comments on our tests and if you have ideas on how to make the results even more robust, or if you have other feedback, it would be very much appreciated. This article was written by Justin C. Paolini, trader and co-owner at FXRenew Want to learn more? Get FREE access to the Advanced Forex Course for Smart Traders

Revisiting Tom Basso: How important is your entry in forex trading? - Part 1

by Justin Paolini Many aspiring traders focus on setups and entries. I would say 90% of their time is actually dedicated to perfecting entries. That is one way to miss the forest for the trees. Back in the 1990's, Tom Basso and Van Tharp had already issued a study on the relative unimportance of entries for producing good trading results. In particular, their "Coin Flip" study showed that across 10 futures markets, a simple random entry with a trailing stop made money. Assuming they did not cherry pick the situations for the test, is the relative unimportance of entries still valid now? The question for us today then becomes: does the random entry still work or have the markets changed?We decided to answer that question with a research project using current Forex data.A second question we decided to examine was - is the Coin Flip actually profitable over any length of time? Tom Basso's Coin Flip Study In his book Trade Your Way to Financial Freedom, Van Tharp explained how he and Tom Basso came up their idea to test about random entries: "I was doing a seminar with Tom in 1991. Tom was explaining that the most important part of his system was his exits and his position-sizing algorithms. As a result, one member of the audience remarked, "From what you are saying it sounds like you could make money consistently with a random entry as long as you have good exits and size your positions intelligently". - Van Tharp,Trade Your Way to Financial Freedom Here are the very simple rules Tom Basso used, in order to test the viability of a random entry system: 1) Hypothetical 1 Million dollar account à this is required in order to simulate diversification amongst futures contracts, withstanding margin requirements and drawdowns. 2) Select markets that have more of a tendency to trend, so commodities and futures markets. In particular, the markets backtested on were Gold, Silver, US Bonds, Eurodollars, Crude Oil, Soybeans, Sugar, Deutsche Mark, the Pound and Live Cattle. 3) The Exit is 3*10 Day Average True Range (more on this here) subtracted from the close. The trailing stop can only get closer to the current market price, not further away. 4) Position size: 1% of equity 5) Selected markets must be liquid (so that trades can be entered and exited immediately with low slippage). 5) Always in the market (so as soon as 1 trade is closed, another is opened). Entry Trades taken as per Basso's Rules coded by Craig Consulting on MT4 We used these same rules to run simulations in MT4 with the help of our resident programmer Craig. We tested the six FX Major pairs along with Gold from January 1st 2014 to June 30th 2016 (except for NZDUSD which because of data errors, was run only until the end of February 2016). Effectively, we tested the random entries in trending and rangebound environments. Unfortunately, MT4 doesn't have a Monte Carlo generator so we had to do all the runs manually and it was a lengthy process. So we did 20 runs, but we did not find significant deviations from the core concept: Tom Basso's Coin Flip system rules remains as sturdy today as it did back in the 1980s/1990s. An example of the output in Excel - Tom Basso's Random Entry is in fact profitable in most cases. As you can see, the random entry method ends up with a profit in most cases (and this was a robust finding across all runs). The profit factor is also interesting, however, there were very few trades and the system produced a very low win rate. Van talks about the psychological part of trading and even with robust statistics at your disposal, you can see how traders would still find it very hard to stomach this kind of a system in reality. It was at this point that complications and additional questions arose. We asked ourselves: just how random was Basso's system? To keep the discussion short & sweet, here are our thoughts: - Real random entries should be random in direction, time and price. So being in the market at all times is not really random. Basso's "randomness" simply asked the algorithm to be "long or short" randomly at a given starting date and then randomly picked long or short after each trade closed. So this means the starting point and initial conditions were likely very influential in the results. - The markets weren't randomly selected.Forex and commodities exhibit autocorrelation (trendiness) just like the futures contracts used in the original study. This is another bias to Basso's test as stocks do not exhibit the same degree of autocorrelation in returns. - The exits weren't random at all, are they? The rules for exiting were very clearly defined as to not be random at all.Basso was not testing a purely random system - and neither did we. So we're not saying that it is possible to obtain decent results simply flipping a coin in the market as to when to get in and when to get out. In fairness, Basso was not testing for profitability of a completely random system.Instead, he simply devised a test to see if exits were much more important than entries.That test was positive but even Van said traders can do a lot better than using a random entry - and still not spend all their effort on the entry.Our initial research results got us wondering about the possibility of putting additional randomness into the test and seeing what came out.What we found was both confirming on some fronts and surprising on others. One of the confirming conclusions that will emerge in next week's part 2 article of this series is that the exit strategy influences returns more than the average trader expects. In particular, we used a trailing stop which is particularly suited to trending markets. When random entries were paired with trailing stops in range-bound environments, positions get "chopped up" but they really "buck the trend" in a trending environment.The importance of the trending environment (or market type as Van labels it) turned out to be one of the more surprising results from the tests. Join us next week for the research results and the rest of our conclusions. This article was written by Justin C. Paolini, trader and co-owner at FXRenew Want to learn more? Get FREE access to the Advanced Forex Course for Smart Traders

These insights from the "Sultan of Currencies" are still relevant today as they were in 1992

 "Foreign Exchange is a very psychological market" The currency market has evolved greatly since 1992. Dealing and prop trading desks at banks have been reduced to shadows of their former selves. The markets have gone full bore electronic and now even the smallest retail trader can participate with close to institutional execution speed and spreads. You might think these changes make the Bill Lipschutz interview published in The New Market Wizards somewhat outdated, but you would be wrong. Lipschutz's interview is a testament not only to the timeless nature of markets and human psychology, but also to his great depth of his understanding and insight. You need to remember this was a new thing when he began. There was no veteran for him to learn from, no website for him to join, or market wizards book for him to read (at least not one featuring a Forex trader). Every day when I trade, Lipschutz's advice is in my mind. And it works. Time and time again. In fact, until I re-read the interview again (in preparation for this article), I did not realize quite how much my trading approach has been influenced by him. Let's summarize the key insights here. Know market sentiment "What is important is to assess what the market is focussing on at the given moment" This quote sums up market sentiment in a nutshell. The Forex market is highly psychological. It is often not the variant perception that drives market - it is the current perception. Understand what the market is focusing on, and you will go a long way. Think about the bear trend in the Japanese Yen in 2012 - that was because the market was focussed on the Bank of Japan and Abenomics. The bear trend in the EUR in 2014 was because the markets were focussed on the Greek Debt Crisis. In 2016 the GBP sold off for months, as the focus on was BREXIT. Sentiment is not always big picture either. If you are a day trader, understand what the market is focusing on for that day or week. As Lipschutz says, "one day the market might be focussing on interest rate differentials; the next the market may be looking for capital appreciation, the exact opposite". Don't trade on your "gut" "For myself, any trade idea must be well thought out and grounded in reason before I take the position" Currency trades should be carefully planned. You need to consider the best way to implement the trade to produce the best risk/reward profile. Additionally, scenario planning should be conducted. We know based on Lipschutz that good traders spend a lot of time thinking about what could possibly happen, what it means for their position(s) and what the correct response would be. They "develop scenarios, re-evaluate scenarios, collect information, and re-evaluate that information." These strategies both maximize profits and eliminate mistakes in the fires of battle. This does not preclude any trades based on "instinct". Sometimes you need to act quickly, but as a general rule, detailed planning is better than gut feel. It's about each situation, not a boiled down set of rules "Many people think that trading can be reduced to a few rules. Always do this or always do that. To me Trading isn't about always at all; it's about each situation". While I appreciate a rules-based approach to trading, rules can cause the trader to take the wrong actions for the current situation. Perhaps your rule tells you to take profit, but you can clearly see that the trend is likely to continue. Rather, I prefer a process-driven approach to trading. In a process-driven approach you look to understand what is happening right now, and then apply the correct approach based on your model of how the market works and your toolbox of methods. This provides the flexibly to adapt to a changing market while remaining within a strict risk-management framework. Know your risk inside out "Always know exactly where you stand" Lipschutz lists some of the main elements to controlling risk. Know exactly your position size and exposureDon't concentrate too much of your money in one big trade or group of highly correlated tradesAlways understand the risk/reward of the trade as it standsnow- not only when you put the trade on These risk management rules are all just as relevant today as they were then. Good traders know exactly what risk they have on, they know which trades are correlated, and they take steps to ensure that their positions remain within their established risk limits. Having a losing streak? "Work very hard to restore...confidence" If things are not going well, your judgement is likely to be impaired due to the lack of confidence that tends to accompany any losing streak. The key is not to trade more to try and win back your losses. The key is simply to regain your confidence. This can be done by cutting back on your trade size - get some small wins under your belt, and your judgement will reassert itself. Don't rely on being exactly right in your timing "You have to trade at a size that if you're not exactly right in your timing, you won't be blown out of your position" By employing a scale-in and scale-out approach to trading, you eliminate the common mistake of "all or nothing trading". Lipschutz would add to his position as it went in his favoured direction, then once the currency was near his intended target (or when circumstances dictated), he would lighten the position piece by piece. This means he does not have to be exactly right in his timing to be profitable. In particular, it has enabled him to stay with his winners a lot longer than other traders, who exit in one go. The benefit of this is an improved risk/reward ratio. Lipschutz believes it's important to "figure out how to make money being right only 20 to 30% of the time." Exit when the fundamentals change "You don't want to hold a position when you don't understand what's going on" If you are in a position based on a fundamental reason or story, and the fundamentals change, then it's time to get out of your position. (At least for now.) Even if a trade is going for you, once you perceive that the fundamentals have shifted, then it's best to get out and re-evaluate. (If you don't know what's happening, then any profit you are currently making is based entirely on luck, and that is not a good thing. ) Success arises from hard work and courage "The best traders I know are quite brilliant, and they all work very hard - much harder than anyone else" Lipschutz is firm in his belief that the best traders don't think twice about how many hours they work - "there is no substitute for that level of commitment". They ask constantly: "What am I doing right? What am I doing wrong? How can I do what I am doing better? How can I get more information? It's obsessive" Top traders need to fight through the pain. This takes courage. Sometimes you need to be quite different from the crowd, and have the gumption to act on your views and stay the course. Focus on the process not the money "The money never had a major effect on me" Lipschutz was not bothered by the money he had on the table. Rather, his focus is simply on trading well. This was apparent at one particular point, when he was stuck with a large losing position that was moving against him. Rather than panicking and selling at the first available opportunity, he followed his processes and let the market dictate when he was to get out, resulting in a much smaller loss. Trading as a game "I can't believe I'm making all this money to essentially play an elaborate game" Lipschutz trades not for the money, but for the challenge. He suggested that even without the money, he would still trade as he enjoys it so much. To him, trading is a game - and an easy one to keep score of. Interestingly, a number of top traders have a similar mindset. By thinking of trading as a game, you divorce yourself from the paralyzing stress of worrying about money, and focus simply on making good decisions from a relaxed state of mind. The timeless nature of trading Lipschutz's words are still as relevant today as they were 24 years ago.  While the markets and techniques change, the principles of good trading don't. So this is where you should spend your time. If you can truly integrate this level of thinking in your trading, then you will be able to achieve your trading goals. It's up to you. If you need support, you can get the Advanced Forex Course for Smart Traders for free. Cheers, Sam About the Author Sam Eder is a currency trader and author of the Definitive Guide to Developing a Winning Forex Trading System and the Advanced Forex Course for Smart Traders (get free access). He is the owner of FX Renew, a provider of Forex signals from ex-bank and hedge fund traders (get a free trial).

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