how to become forex trader

How to Transform Yourself into a Successful Trader

Expert Advisior, Forex Strategy

Today I want to talk to you guys about how to transform yourself from a struggling, losing trader into a successful one. I’m going to get specific in today’s lesson and discuss how you can begin making consistent money in the markets, once and for all…

Trading seems really hard and frustrating when you are losing money and you have a little account that you can’t seem to get anywhere with. I know how you feel because I’ve personally been there before and so have many other successful traders who have walked a similar road until they eventually ‘transformed’ into profitable traders. You might be surprised to know that the primary ‘sticking points holding you back’ are not as difficult to overcome as you might think.

The purpose of this post is simple: to teach you how to conquer the obstacles that get in the way of profitable trading, and slowly but surely transform yourself into a successful trader.

Step 1: Determine why you are failing to make money

There is basically a small handful of very common issues that hold most people back from making money in the market, and if you can learn to work through them you will start to make money.

For some reason, people like to look outward rather than inward when trying to figure out why they are losing money in the market. Actually, I know the reason why…because most people are afraid to admit that the problem is almost entirely inside of them.

The first step to figuring out why you are not making money in the market is accepting that you might have to change something about yourself; you are not perfect. I was in the same boat before (but now I’m perfect. Joking!)…trying to solve my trading failure by looking outward before I finally swallowed the cold hard fact that the reason I was not a profitable trader yet was entirely my fault.

Thus, the first thing you need to do to fix your trading woes is to have an honest conversation with yourself about why you are not making money in the market. Lucky for you, I’ve prepared a list of questions for you to ask yourself to help determine why you are not yet a successful trader. Be sure to answer honestly or you will miss the point of this entire post, you can do this exercise aloud if you want (just make sure you’re alone or people might think your crazy)…Seriously though, write down your honest answers to the questions below and any others you can think of…

Questions to ask yourself to help determine why you are not yet a successful trader (You might think of more):

1. Do I have an effective trading strategy that I feel confident with? Do I know what I am looking for when I analyze the charts or am I just sort of ‘shooting in the dark’?

2. I do have a trading strategy that I’ve mastered and feel confident with, but am I actually following it and waiting for the setups to appear? Or am I disregarding my strategy and sort of entering randomly because I want to be in the market all the time?

3. Do I honestly have a structured daily trading routine that I could easily explain to other people and sound like I am know what I’m doing? Or would I just sound like a bumbling moron who is obviously gambling my money away?

4. What type of money am I trading with? Is it ‘scared’ money…AKA money that I know I shouldn’t be risking in the market but I am anyways?

5. What is my pre-determined dollar risk-per-trade threshold that I am emotionally OK with potentially losing? Do I even have one or am I just ratcheting up and down my dollar-per-trade risk as I see fit?

6. Am I constantly glued to my charts and obsessed with analyzing the 5 minute and other low time frames charts?

OK, as you can see, there are six serious questions above that you need to get busy with answering before you do anything else. Do what you need to do; lock yourself in a room with a box of tissues to wipe away the tears or maybe have a couple of beers…just answer the above questions HONESTLY (and any others you can think of) if you really want to figure out why you are losing money…and begin to put an end to it.

Step 2: Devise a plan to fix what’s causing you to fail

how to fix trading problemsAfter you’ve figured out why you’ve been losing money in the market from answering the questions above, you can start devising a plan to begin transforming yourself into a successful trader.

Of course, the particular reason(s) a trader is failing in the market will vary between traders. The important thing is to really focus in on the main thing(s) that are holding you back and work on changing them. Again…if you completed the exercise in step 1 above, you should now have a good idea of what the “main things” are that are holding you back from becoming a successful trader.

Here are some examples of how you might plan to fix trading problems:

Examples:

Problem: Let’s say you answered “No” to question number 2 from above because even though you have a trading strategy that you’re confident and happy with, you can’t seem to muster the discipline or ballz to stick to it.

Solution: Look at yourself in the mirror and ask yourself if you like to lose money? Because that’s what’s going to happen if you can’t muster the discipline to stick to an effective trading strategy. More practically speaking…you might limit yourself to a 3 trade per week maximum, see if you can stick to that rule for 1 month…DARE yourself to be disciplined for one month and see how it affects your trading. Remind yourself that if you continue to give into your emotional impulses to over-trade and constantly be in the market, you will NEVER become a consistently successful trader. The point is that you are FOCUSING on this problem until you have destroyed it and showed it who the boss is.

Problem: Let’s say that you answered “No” to question 3 above because you do not have a structured daily trading routine that you follow and you suspect this is a big reason you are losing money.

Solution: Start writing your own “daily commentary” for your favorite markets once a day after the New York close. I wrote an article last week on how to develop a daily trading routine, read that to get some more info on this and start focusing on fixing your lack of a trading routine.

Problem: Let’s say you answered “Yes” to question number 6 and you are constantly glued to you charts because you’re addicted to the lower time frames or you’re just addicted to being in the market.

Solution: The best way to cut your addiction to lower time frames is to first obtain some knowledge on the best time frames to trade. Once you do this, you’ll clearly see that higher time frames like the 4 hour and daily chart are the way to go. I have many articles on trading higher time frames, like the one I just linked you to and more. So study my site more and you’ll learn more about why trading low time frames is so dangerous. Next, you need to simply STOP looking at any time frame under the 1 hour, again, this is an exercise in discipline; you need to force yourself to stop looking at those 5 minute charts…if you cannot manage that level of discipline for even 1 month then you probably shouldn’t be trading anyways.

If it’s not clear to you yet, what I’m doing here is identifying the problem and then developing a way to fix it. You obviously cannot do this if you didn’t answer the questions honestly in step 1 or otherwise figured out why you are not yet successful.

I actually want you to write it out like I did above; list the problem in specific terms and then below it list the solution. Build this into your trading plan if you need to; just be sure that fixing the specific problems you’ve identified becomes the main focus in your trading for now.

 Step 3: Don’t deviate from your plan

disciplined tradingHow many times have you started exercising again after a long absence and you’ve had 1 or 2 months of consistency going to the gym and eating healthy when you get hit with the flu or another nasty virus that knocks you out of your routine? How soon you get back into your routine is what separates the “men from the boys”.

We all have things happen that get in the way of our best efforts, whether it’s in business, school, health or trading. They key is to not let one unfortunate event derail your entire effort and all the progress you’ve made up to that point. The famous American football coach Vince Lombardi once put it best when he said, “It’s not whether you get knocked down, it’s whether you get up.”

The key point here is that the “glue” that will actually allow you to transform into a successful trader is not whether you figure out why you are losing money and devise a plan to fix it as we discussed above, but whether or not you STICK TO THAT PLAN(S) after you hit a couple of losing trades. It is exactly because of this lack of “glue” that many traders’ best efforts go right off the track and fly into the black hole of trading aspirations.

Transforming yourself into a success at anything is really just a matter of habits. Trading is no different; do you have the necessary discipline and drive to overcome whatever it is that’s causing you to fail in the market? Honestly, the reason you’re failing is probably one of the issues that I listed in Step 1, as I said earlier…most traders tend to fail for the same small handful of reasons. Does this not make it clear to you that the MAIN thing that separates successful traders from the masses of losers is simply that the successful traders dug a little bit deeper, made the extra effort and simply had more drive to fix their trading problems?

I have news for you, no one is born a Warren Buffet or a George Soros, despite what you may have read, professional traders and investors do not come out of the womb that way. Yes, some people have a slightly better brain chemistry for patience, discipline and interest in financial markets, but by no means is being born with a different brain chemistry something you can’t overcome if you want to bad enough. The point I’m trying to make is this: do you really want to remain an unsuccessful trader because you simply didn’t TRY to be disciplined enough to follow a plan to eradicate your trading problems? I’m pretty sure your answer is a resounding “NO!”

The Final Step…

The “final step” is really just commitment. Will you commit to changing the way you trade? I’ve given you a very effective blueprint to fixing your trading problems in this article, so really, the only excuse you are left with is a lack of motivation, which is something that I am trying to help you with via this article and others that I’ve written. But I can’t come to your house and pour a bucket of cold water on your head, so it’s up to you to really listen to what I am saying in this and other articles and start to piece it together.

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