TOWER ONE FX GROUP

Trader Psychology

In my opinion Trader Psychology is the biggest obstacle for any trader on their road to profitability. Some traders have it naturally and some just cannot make it no matter what they do. Why is that? Well, going back to my the beginning of this FOREX Trading Training I list the three Pillars to Profit.

• 
  The Right Trading System, i.e a validated Trading System that produces consistent profits
  
• The Right Psychology, i.e a Psychology that supports your trading effort towards consistent profits
• The Right Experience, i.e an Experience that promotes confidence in your Trading System

As you have learned, all are needed for success. Forex Trading training doesn't come easy, work on it. Compare the three and you will see that Trader Psychology is the only one which is unmeasurable, i.e we cannot apply common scientific methods in order to study it and therefore find a simple solution. It is very difficult (impossible?) to know what is lurking deep down there in your subconscious. Several methods have been developed to deal with the subconscious. You could try NLP (Neuro-Linguistic-Programming) or hypnosis, just to mention a few. If you have a seriously stubborn mind (like me) it might take up to a year of daily sessions before you have a breakthrough. There is always a solution to your problem, you just need to find it. Don't be a quitter, with Mind and Motivation you will make it!!!!

Losing streaks

Losing streaks are very common in trading and it has nothing to do with you. Unto this day I have not seen a system without losing streaks. Losing streaks are due to changing market conditions. Sometimes the market changes in our favor sometimes to our disadvantage. The markets are in a constant state of flux and you can not do anything other than accept it as fact. Remember, go with the flow. The only recommendation I have is to reduce your lot size for some time until you see that things are improving. Sometimes it is advisable to take some time off, just to let some steam off. It's better with zero income than negative income, right??

Personal issues

Life throws at us a whole bunch of stuff, whether we like it or not. Certain issues will affect you psychology and your trading negatively. Trading needs 100% attention especially if you are trading intraday on a high resolution (e.g. 5 min bars). As an employee you get your paycheck even if your attention is partly elsewhere, this is not the case in trading where you could actually lose money. It is better to deal with the issue that is bothering you and pass on trading, if only for a couple of days. The sooner the issue is solved the sooner you will be back trading making money.

Incorporation

When you have been consistently profitable for at least a few months, I suggest you incorporate, if you haven't already. Rich people do not own anything, they control everything (through corporations). The biggest advantage is that corporate tax is lower than personal tax and that a corporation is taxed on its profit not income. Another advantage is that a corporation gives a better shield against litigation (unfortunately we live in a litigious society). The best is always to incorporate in the country where you live.

Disclaimer: I am not a lawyer and cannot give you legal advice. Always check with a tax lawyer and accountant before making any decisions about incorporation.

Vacation

In a profession like trading it is never wise to take vacation longer than 2 weeks. It is much better to take four individual weeks spread throughout the year than four consecutive weeks of vacation. The reason is two-fold:

• The longer you stay away from trading, the harder it will be to get back in. Then you will make mistakes and lose money, affecting your confidence negatively.
• It is always good to let the mind focus on something else for a few days (not weeks) and then get back fresh and ready for action. Doing this on a regular basis might actually improve your trading.

If you plan to make an extended vacation, take a laptop with you and check the status of the markets just to keep up and not lose touch. Whatever your trading style this takes max 30 min per day. If you trade daily bars, one or two times per week is enough.

The best time for an extended vacation (i.e 2 weeks) would be the last week in August and the first week or two in September (around US Labor Day), as well as the weeks around Christmas/New year. Liquidity and volatility is usually the lowest around these dates. Actually, the decision not to trade during these periods could prove beneficial to your account.

I wish you the best of the best. May the good trades be with you.

I advice you to continue your Forex Trading Training by having an open mind and never take anything for granted.