Forex Trading Terminal

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1. Follow your plan.

2. One time frame.

3. One market.

4. One signal.

5. One contract.

6. Determine your risk before entering a trade.

7. Set a stop immediately after entering a trade.

8. Determine exit before entering a trade.

9. Record on paper all of the characteristics of each trade

10. Maintain a list of phone numbers in case of ISP or power outages.

Two through four of this plan is a matter of simple choice, not much to debate; and more or less a no-brainer. Number one speaks for itself. If you don’t follow your plan exactly, when something goes wrong, you will not be able to analyze it and dissect the problem. You must treat trading like a business and not a video game if you expect to succeed. By sticking to your plan and recording what was happening when you entered and exited a trade, you stay focused, regardless of what happened. It gives you a frame of reference and a plan to succeed the next time you encounter the same set-up. When you encounter the trade again with a successful result; it provides you with something that money can’t buy: psychological capital. It might come as a surprise, but trading is not a skill. The market is a battle of the bulls vs. bears/buyers vs. sellers/up vs. down. Trading is a battle from within. The market never changes, only your perception of it. Your trading plan keeps your mind focused on your reaction to market and away from the mind games that are created from fear and greed.

The use of one time-frame eliminates the confusion created by ambiguous and conflicting signals. It is a matter of personal preference as to which one you chose. Which one? The time-frame that you like best is usually the one that shows the best set-ups for your style of trading. A time-frame that’s too fast is a typical problem. The bottom line is: if it’s not working, make a change. The five minute time-frame is probably the best one to use, at least while confidence is being built because is gives you 3-4 minutes to decided if you’re going to take a position.

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<!– /* Style Definitions */ p.MsoNormal, li.MsoNormal, div.MsoNormal {mso-style-parent:”"; margin:0in; margin-bottom:.0001pt; mso-pagination:widow-orphan; font-size:12.0pt; font-family:”Times New Roman”; mso-fareast-font-family:”Times New Roman”;} @page Section1 {size:8.5in 11.0in; margin:1.0in 1.25in 1.0in 1.25in; mso-header-margin:.5in; mso-footer-margin:.5in; mso-paper-source:0;} div.Section1 {page:Section1;} –> by. Brett N. Steenbarger, Ph.D.

Why do we trade? To be sure, trading allows us independence, the opportunity to work for ourselves. Trading also offers the prospects of a lifestyle in which evenings and weekends need not be consumed by work. Some of us crave the competitive aspect of trading, doing fresh battle each day. Others approach trading as a puzzle to be solved, deriving a sense of intellectual achievement. Finally, there is income. A successful trader can make seven figures in a year—and many of the traders I work with are living proof of that.

So why do they trade? Once you have the money, all of trading’s lifestyle advantages could easily be yours. Needs for competition and intellectual stimulation could be met in so many other ways. Why do traders remain traders long after they’ve won the game?

Perhaps we can illuminate this question by asking it of practitioners in other fields. Why do artists continue their craft long after they receive recognition for their paintings, novels, or films? Why do elite Special Forces troops stay in units that test their mettle even after they’ve earned their coveted badges? A gifted athlete such as Michael Jordan earned plenty of money and honors and, in fact, did retire on a couple of occasions—only to return to his game. Why?

There is something deep here that speaks to the nature of productive work. People retire from jobs and even careers, but they never abandon their callings. For some, work means something more than earning a living or achieving a lifestyle. Work is their path in life. It is the way they have chosen—or perhaps that has chosen them—for self-expression and self-development.

Suppose the pastor of a large, successful church wrote a book, made significant money, and promptly retired from the clergy and all religious life. What would that say? Surely, we would think, this person’s faith could not have been too heartfelt. But why should our productive work mean less to us than the clergy means to a devout pastor? Presumably, the religious life meets deep, important needs for the pastor. Is it really so different for the artist? The athlete? The trader?

The great professions are those that serve as personal playing fields. They are the arenas we choose to express and develop ourselves. In mastering a discipline, we cultivate self-mastery. In writing a poem or placing a large trade, we capture—in a single act—our vision of how we see the world at that moment. The great occupations are great precisely because they are such meaningful playing fields. Long after we’ve earned fame and fortune, the calling remains to be more than we are, to return to the arena and do battle with our limitations. The profound urge to extend the human grasp is common to all the great callings. To run faster, to capture more beauty, to predict ever better: in no small measure, our work is our pursuit of the godlike, however fleeting.

Maybe it is our different images of the godlike that animate our career choices. If my deepest view of godhood is that of a meek and all-forgiving Christ, perhaps I will be drawn to an occupation of service. If my deepest view is more akin to the ancient Greeks, whose gods sent heroes on quests, then my calling may be on a battlefield or a playing field. Either way, in work we find something divine within ourselves. Whether as scientists, monks, or traders, we strive for those moments when we are just a little closer to perfection, a little nearer to immortality. That is why we trade.

FXCM Classic FX Powercourse
Lesson 1 Introduction to the FX Market
A) Message from the Instructor
Message From the Instructor Hello, and welcome to the FX Power Course.
This course is designed to teach individuals the concepts of Technical and Fundamental analysis, and demonstrate how to apply these methodologies to your trading account. As the instructors, our role is to ensure that the class runs in a consistent and orderly manner, and that the experience is as rewarding as possible for all of the students enrolled in the course. In particular, this will involve moderating and initiating class discussions; reviewing and analyzing homework assignments; and offering additional insight into the topics presented in the forum. Our duties are aimed towards helping you to start thinking and acting like a trader, and to give you the proper tools and mind set to trade with confidence in the FX markets.
More detail here

Lesson 2 Nuts and Bolts of Trading
A) How Speculators Can Profit from FX Trading
How Speculators Can Profit from FX Trading What the Exchange Rate Means

Key Concepts
The base currency is the term for the first currency in the pair.

The exchange rate represents the number of units of the counter currency that one unit of the base currency can purchase.

In a foreign exchange trade, clients are speculating on the exchange rate between two currencies. The exchange rate measures the relative value of a currency — meaning it measures how much one currency is worth in terms of another currency. For example, let’s suppose the exchange rate for the GBP/USD (Great British pound/United States dollar) is 1.8455. This means that 1 British pound (the first currency in the pair, also known as the base currency) is the equivalent of 1.8455 US dollars (the second member of the pair, known as the counter currency). This is the standard quoting convention for exchange rates; the exchange rate represents how much 1 unit of the base currency (first currency in the pair) can purchase of the counter currency (second currency in the pair).
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Lesson 3 Introduction to Technical Analysis
A) The Logic of Technical Analysis
The Logic of Technical Analysis What is Technical Analysis? ·
Technical analysis involves the forecasting of exchange rate movement based solely upon statistics and price patterns
Simply put, technical analysis is the analysis of the market based on price action. While fundamental analysis looks at economic factors and geopolitical conditions (such as economic numbers, capital flows, and key political events) in an attempt to forecast exchange rates, technical analysis relies on the statistics and patterns in price movement for its forecast. Technical analysis has gained great popularity in recent history, especially as trends in computerized trading continue to develop and active traders continue to refine their strategies to best assess what is going on in the market at all times. In today’s marketplace, technical analysis has become an essential tool for any aspiring trader. Why Technical Analysis Works ·
Extremely popular, and hence offers insight into what many traders are doing ·
More clear-cut and less controversial than fundamental analysis ·
A simple way of making trading decisions
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Lesson 4 Candlestick Patterns
A) Identifying Reversals when Trading
Using Candlesticks to Identify Reversals
What are candlesticks?
Candlestick charts convey information pertaining to price action, or the movement of a currency pair’s price over the specified amount of time. Each candlestick contains four attributes: · the opening price of the currency pair at the time the candle opened · the closing price · the high of the time frame · the low of the time frame On a daily chart, each candle represents a 24 hour period; on an hourly chart each candle represents an hour, and so on. A visual analysis of a candlestick is as follows:
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Lesson 5 Fibonacci Retracements
A) What are Fibonacci Retracements?

What are Fibonacci Retracements?
Fibonacci Retracements
Levels at which the market is expected to retrace to after a strong trend. Based on mathematical numbers that repeat themselves in all walks of life, Fibonacci retracements attempt to measure the likely points that a currency pair will retrace, or pull back to within a range. The key numbers in FX trading are 38.2%, 50%, and 61.8%. Consider the following example to see how Fibonacci retracements work: Suppose an asset is on an uptrend, going from 0 and 1000. After the asset reaches 1,000, how far will it retrace – meaning how far will it fall – before resuming its initial uptrend? We can do this by using the Fibonacci retracement numbers to gauge how deep of a pullback we could expect after the top “boundary” is reached. So, mathematically, it works like this:
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Lesson 6 Moving Averages
A) Using Moving Averages
Using Moving Averages What is a moving average? Moving averages simply measure the average price or exchange rate of a currency pair over a specified time frame. For example, if we take the closing prices of the last 10 days, add them together and divide the result by 10, we have created a 10-day simple moving average (SMA). There are also exponential moving averages (EMAs). They work the same as a simple moving average, except they place greater weight on the more recent closing prices. The mathematics of an exponential moving average are complex, but fortunately most charting packages calculate them automatically and instantaneously. Parameters. The most commonly used time frames for moving averages are 10, 20, 50, and 200 periods on a daily chart. As always, the longer the time frame, the more reliable the study. However shorter term moving averages will react more quickly to the market’s movements and will provide earlier trading signals.
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Lesson 7 RSI
A) Relative Strength Index

What is RSI?

RSI is an indicator that falls under the category of oscillators, and it is an extremely simple indicator to use. RSI works well in range-bound markets, but it has limited value in trending or breakout markets. RSI was created by Welles Wilder, who also created ATR, Parabolic SAR and other well-known indicators. The Concept of Oscillators Oscillators are chart studies that are designed to show the strength of the current price in relation to the recent price action. As such, they display the short term momentum of the market, giving signals that the bias of the market is shifting before the price actually changes directions. The principle upon which oscillators are based is that of regression to a mean. Essentially, a large part of a statistical sample should be within a certain number of standard deviations from the mean of the sample, and if the price strays too far from this center, then it will likely revert back to the rest of the sample. In terms of trading, the price should not rise or fall too far in too short a time. Oscillators are not usually displayed on the same graph as the price itself, but are most often placed at the bottom of the chart to show that the fluctuations do not occur on the same scale as the price movement.
What RSI Does ?
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Lesson 8 Bollinger Bands
A) Bollinger Bands
What are Bollinger Bands? ·
Excellent range-bound indicator that measures standard deviation from the moving average Developed by John Bollinger, Bollinger Bands consist of three lines: · A moving average (Often omitted in most charting packages) · A upper band two standard deviations above the moving average · A lower band two standard deviations below the moving average Bollinger bands are an excellent range-bound indicator – meaning they work best when the market is not strongly trending, but rather fluctuating between a high barrier (resistance) and a lower barrier (support). Bollinger bands operate under the logic that a currency pair’s price is most likely to gravitate towards its average, and hence when it strays too far – such as two standard deviations away – it is due to retrace back to its moving average. Parameters: Standard deviation of 2; moving average of 20 (usually omitted). How it can be used: Range-bound market. In range-bound markets, trading with Bollinger Bands is fairly simple: it essentially involves selling at the top band and buying at the bottom one. Note how the bands are nearly horizontal when the market is in an established range. This is when reversals at the bands are more effective.
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Lesson 9 MACD
A) Trading With MACD
Trading With MACD (often pronounced Mac-D)
What is MACD?
MACD is a commonly used technical indicator derived from exponential moving averages that can be used in both momentum and rangebound markets. Like RSI it is an oscillator plotted at the bottom of the chart, and it shows the momentum of the market relative to its recent history. What it does: Can be used as an oscillator (indication that the asset will revert back to its mean valuation) OR a momentum indicator (indication that the trend is strong and will continue). Parameters: The MACD line is the difference between the 12 and 26 day EMA. The signal line is the 9 day EMA of the MACD. Visually, the MACD consists of three elements:
For your comfort here

Have a nice Trade

Lower-risk forex trading
By Rob Booker

If you earned 10 pips every day for the next 12 months, and you started next year with over $100,000 in your trading accont, you would be making between $10,000 and $17,000 per month trading (depending on your risk tolerance). Can you do this? Absolutely. Can you do this today? Maybe, maybe not. You have to dedicate yourself 100% to learning how to trade intelligently.

HOW DO YOU FIND 10-PIP TRADES?

Here are seven principles of 10-pip trading.

1. Buy and sell on breakouts of support and resistance.
Or, sell when a currency pair hits resistance and buy when it hits support. I teach this in the 1 on 1 training, and this is my
major trading strategy.

2. Stop trying to make $8 million on every trade.

3. Set a 10-pip limit only. Exit the trade at 10. Exit the trade at 10. Stops are set based on market conditions, but are always set.

4. Goal: + 10 pips every time you trade. You don’t have to trade every single day. Only trade when the market shows you an opportunity.

5. If I earn more than 10 pips on a trade because the trade moves so fast in my direction, I can set my stop to protect the 10 and then go for more.

6. There is no ‘makeup’ strategy. If I take a loss,then I’m just trying to end up with a 10 pip gain for the day. If I can’t get it, then I don’t try for 20 the next day, or whatever. I can keep trying for the 10 pips gain as long as I haven’t lost more than 5% of my capital.

7. Time: I can trade for a set number of hours per day, meaning I can have the trading platforms open and sit at my computer for a max of, say, 5 hours per day. If I can’t earn my 10 pips during that time, then I can set my stops and limits and walk away, but I can’t actively watch the market any longer.

Introduction to pin bars
This section explains what the pin bar is. Following sections explain how it may be
traded. Generally examples are only given for pin bars pointing one way. The same
concepts can be applied to pin bars pointing the other way (just reverse the concepts!).
Trading is a probabilities game. There is always risk of loss and the trade going ‘the
wrong way’ after the pin bar has formed. All we can expect to do is to tip the odds in
our favour. When good pin bars are traded then a trader can tip the odds in their
favour. Some trades will result in losses; such losses will occur with any trader from
time to time. (Even a good pin bar setup may result in a loss!)
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What is fundamental analysis?
Fundamental analysis in Forex is a type of market analysis which involves studying of the economic situation of countries to trade currencies more effectively.

It gives information on how the big political and economical events influence currency market. Figures and statements given in speeches by important politicians and economists are known among the traders as economical announcements that have great impact on currency market moves. In particular, announcements related to United States economy and politics are the primary to keep an eye on.

What is economic calendar?
Economic calendar is created by economists where they predict different economics figures and values according to previous months. It contains next data:
Date — Time — Currency — Data Released — Actual — Forecast — Previous

For example: If the forecast is better than the previous figure, then US dollar usually is going to strengthen against other currencies.
But when news are due, traders have to check the actual data.

If to look at oil prices, a rising price will result in weakening of currencies for countries which depend on huge oil import, e.g. America, Japan.
A good example of detailed economic calendar can be found here: Forex Economic Calendar

Whose speeches to keep an eye on?
Chairman of the Federal Reserve Bank of USA, Secretary of the Treasury, President of the Federal Reserve Bank of San Francisco and so on. Speeches of those prominent people are watched closely by traders.

The success that a trader achieves in the markets is directly correlated to one’s trading
discipline or lack thereof. Trading discipline is 90 percent of the game. The formula is
very simple:Trade with discipline and you will succeed; trade without discipline and you
will fail.
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Provided by permission of SFO Magazine February 2003. © 2003 Wasendorf & Associates, Inc. ? 3812 Cedar Heights Drive ? Cedar Falls, IA 50613

By; John Hayden
Over the years, friends who are traders have often asked me how I can quickly determine a trend when
looking at a chart. My answer is that I have examined tens of thousands of charts. However, one
fundamental indicator I faithfully use is the Relative Strength Index (RSI). The RSI was developed by J.
Welles Wilder, Jr. and presented in his 1978 book, New Concepts in Technical Trading Systems. Welles
developed the RSI for trading pork bellies. My belief is that a valid indicator will work in all markets, and
in all time periods. The RSI is used for:
1. Trend Analysis
2. To Help Determine Price Objectives (not covered here)
I am very much indebted to Andrew Cardwell, a Commodity Trading Advisor (CTA), for teaching me
much of what I know about applying the RSI to trade with. Whereas, Wilder no longer uses the indicator
that he developed, Andrew developed his understanding of the RSI to encompass much more than Wilder
ever dreamed. Apparently, Wilder is putting all of his effort into his Adam Theory, and Delta Phenomena.
Momentum-derived oscillators are very popular among future traders, and increasingly stock traders. The
first of the four most popular is; the Momentum Indicator that measures the change in the closing price
over time. The momentum indicator measures the absolute change in price by calculating, (present price)-
(price ‘N’ time periods ago). The second most popular momentum indicator is the Rate of Change
Indicator, which measures relative change by the formula, (present price)/(price ‘N’ time periods ago). The
third momentum-derived oscillator is the Stochastics Indicator developed by George Lane. This indicator
measures the relationship between the closing price to the high, and low price for the period under
consideration. The formula is [(closing price now – lowest low ‘N’ time periods ago)/(highest high ‘N’
time periods ago – lowest low ‘N’ time periods ago)] * 100. The formula is a little bit more involved than
the simple momentum indicator formula. The fourth most popular momentum-derived oscillator is the
Relative Strength Indicator (RSI). Its formula is, 100-[100/[1+(average of ‘N’ periods of where the close
was higher)/ (average of ‘N’ periods of where the close was lower)]].
The problem with the first three oscillators; Momentum, Rate of Change, and the Stochastics is that when
large price movements are dropped from the formula during the period under consideration, the indicator
will move (oscillate) more frequently than it should. The longer the time period, the less sensitive the RSI becomes to oscillate and the smaller its amplitude changes. I prefer a look back period of 14 as it works the best in all time frames, and it is one half the lunar cycle. For intra-day time frames, some traders will use a nine period look back. It is important to realize the RSI formula requires at least 90 periods worth of data to provide valid results. Otherwise, the RSI formula will not give accurate results for trend analysis. When I look at daily charts, I prefer at least 200 days worth of data to earn my trust in the validity of the RSI data.
Every book on technical analysis I have read when discussing the RSI will state that, any movement above 70 is considered overbought, while any movement under 30 is oversold. An important fact to remember is that any oscillator (RSI included) in a strongly trending market will become either oversold (bear market), or overbought (bull market), and consequently will remain oversold or overbought for quite a while. A few books on technical analysis will adjust these levels. They recommend that in a strong bull market, the 80 level becomes the effective overbought level, and the 20 level becomes the effective oversold level in a bear market.

Wilder states in his opinion that the greatest value of the RSI is in pointing out a divergence between the graphs for the RSI and price behavior. Their graphical behavior reveals a bullish divergence (or as he calls it a bottom failure swing) when the price makes a new low, while the RSI continues under 30 and fails to make a new low. When the RSI proceeds to exceed the previous RSI peak, a short-term buy signal occurs according to Wilder.

Similarly, the opposite event would apply to a bearish divergence (a top failure swing), and would be considered a short-term selling opportunity! The typical trader continues to use the RSI to identify a bearish divergence when the RSI is over 70, and a bullish divergence when the RSI is under 30.

This synopsis sums up public knowledge about RSI. However, what the average investor comprehends is a small part of the dynamic overall picture. For example, if the range effectively shifts in a bull market so that 80 is overbought, then Andrew Cardwell realized that the support level must also shift. Inversely if the oversold level in a bear market will shift down to 20, then the resistance level in a bear market must also shift.

Determining the RSI Range

An up trending market will typically find support at the 40 level, with effective resistance at the 80 level. A down trending market will find resistance at 60, with effective support at the 20 level. Often times a primary indication that the trend has shifted from a bear trend to a possible bull market occurs when the RSI which previously was respecting the 60 level, rallies up to 70 or higher. When the inevitable decline arrives, the RSI will respect the 40 level, before rallying again.

In an 80/40 range (bull market), you will see the RSI make higher tops and higher bottoms – a classical indication of a bull market! Likewise, in a 60/20 range (bear market) you will see the RSI making lower bottoms and lower tops. Recognizing this RSI behavior is very useful when first looking at a chart of a

Determining Support & Resistance Levels
It is important to look for former support, and resistance levels on the price and RSI charts. I look at the
RSI chart to determine at what price and at what level the RSI found effective resistance, and support. In an
uptrending market, the charts reveal that the current support levels were actually former resistance levels
(on the price and RSI chart) during previous days and weeks. However, is a down trending market, the
charts reveal that the price or RSI values will eventually violate former support levels. Consequently, these
former support levels during previous days and weeks were eventually transformed into current resistance
levels by the down trending markets behavior.

Looking for a Divergence
A very significant clue that the trend is about to change occurs when a divergence is present. A possible bullish divergence occurs when the price makes a new low, yet the momentum oscillator fails to also make a new low. It becomes a valid bullish divergence when the price turns up from the low, and the oscillator turns up. Likewise, a possible bearish divergence occurs when price makes a new high, yet the RSI doesn’t.
It becomes a valid bearish divergence when the price drops. I hinted at this in the above section. What I am about to say next will shock traditional traders. Whenever I see a bearish divergence, I immediately start thinking that we are in a BULL market. Whenever I see a bullish divergence, I start thinking that we are in a
BEARISH market! Yes, I know that this flies in the face of what all the textbooks say. Remember, we want
to detect the moment the market might change its direction. The important point is that in the majority of
the cases my claim is very true. You will only find repeated bearish divergences in an uptrending market.
Similarly, bullish divergences will repeatedly occur in a bearish market.

Brett N. Steenbarger, Ph.D.

1) What is the quality of your self-talk while trading? Is it angry and frustrated; negative and defeated? How much of your self-talk is market strategy focused, and how much is self-focused? Is your self-talk constructive, and would you want others to be talking with you that way while you’re trading?

2) What work do you do on yourself and your trading while the market is closed? Do you actively identify what you’re doing right and wrong in your trading each day—with specific steps to address both—or does your trading business lack quality control? Markets are ever changing; how are you changing with them?

3) How would your trading profit/loss profile change if you eliminated a few days where you lacked proper risk control? Do you have and strictly follow risk management parameters?

4) Does the size of your positions reflect the opportunity you see in the market, or do you fail to capitalize on opportunity or try to create opportunities when they’re not there?

5) Are trading losses often followed by further trading losses? Do you end up losing money in “revenge trading” just to regain money lost? Do you finish trading prematurely when you’re up money, failing to exploit a good day?

6) Do you cut winning trades short because, deep inside, you don’t think you’ll be able to make large profits? Do you become stubborn in positions, turning small losers into large ones?

7) Is trading making you happy, proud, fulfilled, and content, or does it more often leave you feeling unhappy, guilty, frustrated, and dissatisfied? Are you having fun trading even when it’s hard work?

Are you making trades because the market is giving you opportunity, or are you placing trades to fulfill needs—for excitement, self-esteem, recognition, etc.—that are not being met in the rest of your life?

9) Are you seeking trading success as a part-time trader? Would you be seeking success as a surgeon, professional basketball player, or musician by pursuing your work part-time?

10) Can you identify the specific edges you possess over the many other motivated, interested traders that fail to achieve success in the markets? Do you really have an edge, and—if so—what are you doing to maintain it?

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Brett N. Steenbarger, Ph.D. is Director of Trader Development for Kingstree Trading, LLC in Chicago and Clinical Associate Professor of Psychiatry and Behavioral Sciences at SUNY Upstate Medical University in Syracuse, NY.

1. Fear of being stopped out or of taking a loss. The usual reason for
this is that the trader fears failure and feels like he or she cannot take
another loss. The trader’s ego is at stake.
2. Getting out of trades too early. The trader relieves anxiety by closing
a position. He has a fear of the position’s reversing and then feeling let
down or a need for instant gratification.
3. Wishing and hoping. The trader does not want to take control or take
responsibility for the trade or has an inability to accept the present
reality of the marketplace.
4. Anger after a losing trade. The trader has the feeling of being a victim
of the markets, unrealistic expectations, or caring too much about a
specific trade. He ties his self-worth to his success in the markets or
needs approval from the markets.
5. Trading with money you cannot afford to lose or trading with borrowed
money. The trader feels that this is his last hope at success
and is trying to be successful at something. He has a fear of losing
his chance at opportunity, no discipline, greed, or desperation.
6. Adding on to a losing position (doubling down). The trader does not
want to admit his trade is wrong and is hoping it will come back. His
ego is at stake.
7. Compulsive trading. The trader is drawn to the excitement of the markets.
Addiction and gambling issues are present. He needs to feel he is
always in the game and has difficulty when not trading, such as on
weekends. He is obsessed with trading.
8. Excessive joy after a winning trade. The trader ties his self-worth to
the markets, feeling unrealistically “in control” of the markets.
9. Stagnant or poor trading account profits—limiting profits. The trader
feels that he doesn’t deserve to be successful, that he doesn’t deserve
money or profits. There are usually psychological issues such as poor
self-esteem.
10. Not following your trading system. The trader doesn’t believe it really
works. He did not test it well. It does not match his personality. He
wants more excitement in his trading. He doesn’t trust his own ability
to choose a successful system.
11. Overthinking the trade, second-guessing your trading. The trader has
a fear of loss or being wrong. He has a perfectionist personality, wanting
a sure thing where sure things don’t exist. He does not understand
that loss is a part of trading, and the outcome of each trade is unknown.
He does not accept that there is risk in trading and does not accept the
unknown. He is afraid to pull the trigger.
12. Not trading the correct trade size. The trader is dreaming that the
trade will be only profitable and not fully recognizing the risk or understanding
the importance of money management. He refuses to take
responsibility for managing his risk or is too lazy to calculate proper
trade size.
13. Trading too much. The trader has a need to conquer the market.
Greed. Trying to get even with the market for a previous loss. The excitement
of trading (similar to Number 7, Compulsive Trading).
14. Afraid to Trade. The trader has no trading system in place. He is not
comfortable with risk and the unknown and has a fear of total loss, fear
of ridicule, need for control, and no confidence in his trading system
or himself.
15. Irritable after the trading day. The trader is on an emotional roller
coaster due to anger, fear, and greed, putting too much attention on
trading results and not enough on the process and learning the skill
of trading. He is focusing on the money too much and has unrealistic
trading expectations.