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tradinmistakesYou know those trades that you just ‘know’ you should take but for some reason you still don’t? Does it drive you crazy to wake up in the morning and see the trade setup from yesterday that you passed on screamed 200 pips in your favor?…Have you ever said to yourself ‘damn I knew I ‘shoulda’ took that trade, why did I pass on it?’ Have you ever checked back in on the market 12 hours or a day later only to see that the trade you previously closed out near breakeven ended up surging to hit your target without you on-board? Even after 10 years trading forex I personally still suffer from this problem, and I imagine for less experienced traders the problem is 10 times worse! It’s probably the most important problem that forex traders deal with on a regular basis.

This lesson will discuss these problems and will give you some potential solutions to keep them from reoccurring. After all, there’s nothing worse than kicking yourself because you simply ‘chickened out’ on an otherwise perfect trade setup…

Why aren’t you pulling the trigger?

The first step to fixing the problem of being afraid to enter a trade or ‘freezing’ up when you see a valid setup, is to identify the problem. Why are you not pulling the trigger when you know you should be? Here are some common reasons:

Fear – Being afraid to enter a trade is common amongst beginning traders or traders who have just experienced a massive losing streak. The fear can stem from different sources, maybe you haven’t fully mastered your trading strategy or you are risking too much per trade and have just suffered a massive loss. Whatever the reason, fear has no place in the mind of a successful Forex trader, and we will talk later in this lesson about how to get rid of it.

Not being clear on your trading strategy – Maybe you aren’t 100% clear on how to trade with your trading strategy. If this is the case, you need to get more education, practice your strategy on demo, and make sure you are actually using an effective trading method that’s not overly-complicated, like price action. If you are confusing yourself because your charts are plastered with 10 different indicators, you naturally are going to miss good price action trade setups (and kick yourself later) because your trading strategy is too difficult to decipher. Once you become a skilled price action trader, you will know for sure when your edge is present and when it’s not; this largely eliminates most instances of being ‘gun-shy’ to enter a trade.

Not being confident – Maybe you have low-self esteem that causes you to doubt your ability to trade successfully. Whatever the reason, if you have low-confidence in your trading abilities it can cause you to miss out on high-probability trade setups. We will discuss below some things you can do to build your confidence as a trader.

Too much pressure on one trade – Traders who have a habit of risking too much per trade or who tend to over-trade, naturally put too much emphasis on any single trade. This can cause them to become afraid to enter another trade after a series of losses, even if a valid and high-probability price action strategy forms next. If you risk too much per trade and lose on a few in a row you’re going to be scared of losing more money and this can cause you to miss out on perfectly good setups. If you over-trade and trade when you know you shouldn’t, you are probably going to have a lot of losing trades as a result, this will also cause you to experience fear and will potentially cause you to be afraid of pulling the trigger when a valid setup finally forms.

Believe in the trade signal.

believeThe first thing you need to do if you want to get rid of the problem of not pulling the trigger when you know you should, is to really believe in your trading strategy and believe in every trade signal you take.

I never enter a trade that I don’t fully believe in. How do you achieve that same mindset? You achieve it by fully understanding your trading strategy, what your edge is and exactly how and when to trade it. If you know exactly what you’re looking for in the markets there’s never any reason to doubt yourself or trade when you shouldn’t. There’s also no reason to skip perfectly good trade setups if you know exactly how to trade your edge.

Many traders don’t fully believe in their trading signals because the signals are just too confusing to trade off of, or they have not fully mastered their trading strategy yet. Becoming a ‘master’ of your trading strategy is something I talk about a lot, and you really need to do that before you trade live. Mastering one trade signal at a time on a demo account is a great way to seamlessly transfer to real money trading.

There’s also an element of believing in your trade signals that deals with self-confidence. Many traders take their trading way to personally; they look at each winner or loser in the market as a reflection of their talent or skill. Really, even the best traders in the world have losing trades, and losing trades are just part of trading, it’s nothing personal, it doesn’t mean you are a bad person or that you suck at trading if you lose a few trades in a row. Indeed, it’s a perfectly natural part of the process of being a trader. So, don’t let losing trades get you down, if you have managed your risk effectively you should not care if you hit a few losers in a row as it’s bound to happen sooner or later, just keep sticking to your trading plan and trading with discipline.

Believe in yourself and your ability to trade successfully.

Believing in your trading edge and in each occurrence of your edge requires that you first believe in yourself and your ability to trade successfully. Clearly, if you don’t believe you CAN be a profitable trader you will never ending being one. However, many traders sabotage their own efforts at making money in the markets simply because they don’t think like a pro trader; they don’t believe they can make consistent money in the markets.

Hindsight – To believe in your own ability to trade and to stick to your edge, you have to kick the habit of hind-sight trading. That is, back-testing and generally having a habit of going back and looking at previous signals that you wished you would have taken. This is not an exercise that is conducive to developing your confidence or your belief in your own trading abilities. The best way to build these abilities is to test your skills in real-time market conditions on a demo account by forward-testing, not back-testing. I get emails everyday from traders asking me about back-testing, and I say the same thing to all of them; it’s pointless because what matters is whether or not you can trade in real-time market conditions where you cannot yet see the price action that unfolds after the setup forms. Forward-testing is the real testing-ground, and back-testing has a tendency to make you a ‘hindsight’ trader where instead of building real confidence and belief in your ability to trade NOW, you develop confidence that you COULD have traded successfully in the past…which is simply pointless.

Don’t fret over losses – Don’t beat yourself up over a losing trade, after all, they are unavoidable even to the best traders in the world. EVERY trader has losing trades. You can’t let them rattle your confidence or your belief in yourself, because if you do you will start second-guessing valid instances of your trading edge, and once you start doing this it can start a snow-ball effect of being afraid to pull the trigger.

Face your fear

confidenceFinally, you’ve got to take on risk and put your ballz on the line if you want to be a trader, and that means you’ve got to stare it in the face and accept the fact that you could lose the money you have risked, so don’t fight it. The more you try to fight against losing money in the markets the more you will likely lose. Trading is sort of like human relationships…if you try to control them and force them they typically don’t work out, and if you try to control the markets or ‘force’ your will upon them you are going to lose money. Just as you have to accept a person you want to have a relationship with, friendly or otherwise, and not try to ‘force’ them to like you or try and control them, you have to simply accept that you can’t control the market; accept the market for what it is, not what you want it to do for you.

The market will move, it will rise and fall and ebb and flow, you have to learn how to read its price action to take advantage of its movement. YOU have to roll with the market if you want to take money out of it…otherwise it will ‘roll’ right over you. Once you accept that you are going to have losses and you accept that you have to take what the market gives you and not try to force the issue, your trading will become much more stress-free and easy. People become frustrated and angry when their expectations are not met, likewise, traders become frustrated and angry when they expect a certain outcome from a trade and it doesn’t happen.

You’ve got to learn to let go of your expectations of any single trade, because any trade can lose. The key is to believe in your ‘edge’ and continue to subject yourself to opportunities when they present themselves on the charts.  You’ve got to remind yourself that each trade setup is just another execution of your edge, and if you have mastered your price action trading strategies and follow your plan religiously, you will have a high-probability edge to trade with. When you learn to trade off of the market’s price action and truly ‘let go’ of your fear of ‘uncertain’ outcomes, you will begin to see a dramatic change in your trading and in your confidence as a forex trader.  If your wanting to develop your ‘winning edge’, I suggest you focus your attention on learning a ‘simple’ price action trading strategy and follow the major currency pairs on the daily chart time-frames. You can learn more about how I personally trade with ‘high probability’ price action strategies in my price action trading course.

nialfuller

About Nial Fuller

is a Professional Trader & Author who is considered ‘The Authority’ on Price Action Trading. He has a monthly readership of 250,000+ traders and has taught 15,000+ students since 2008.
Checkout Nial’s Professional Forex Course here.

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38 Comments

  1. Marko Graenitz says:

    Great quote, so true! “Trading is sort of like human relationships…if you try to control them and force them they typically don’t work out.”

  2. samuel says:

    this is a wonderful write-up, i realy leaned alot from this, expecially my back-testing error. fuller keep the good work going

  3. Ashraf Khan says:

    Thank you Nial for such an excellent and useful article. My thinking is changed dramatically after reading it.

  4. Richard says:

    I have just joined your list and am confronted by oh-so-sensible advice contrary to what I have been advised previously. It hits the “nail” on the head.

  5. Terry says:

    Thanks for looking into my mind and showing me some of my
    mistakes. I will be aware of them, and do my best to fight them

  6. Sola says:

    Big thanks to you Nail.

  7. slivester says:

    Thank you Nial .. The article is apt and it is motivating for me !!

  8. nauval says:

    This article remind me about my self. :)

  9. Tim says:

    Very good article, on what I agree is THE biggest hurdle to overcome before becoming a successful trader. Backtesting though does has it’s value, as it is the best way to identify the patterns and set-ups which will eventually define your edge. Once this has been dome, then it is time to try it out on a demo site, and this process of trial and error will hopefully lead to a progressive improvement over time as knowledge is gained Confidence, I think, comes through performance, or at least it did with me. Once I really started winning consistently on my demo site, I then had the confidence to begin trading very small lots on a micro account, very different when real money is on the line to be sure, but I knew I could do it, and that was the key.

  10. John Gregory says:

    As always, good article Nial. Through your price action plan, Im able to pull the trigger, and successfully predict what the direction of the market is going to be. My problem now is when to stop firing (when to take my profits.) I have several trades that went in favor of my position (130 points profit), but then totally reverses back. Wahh..

  11. steve says:

    This is simply great. Please keep it up

  12. kotijett says:

    Nial thanks for a great article!!!

  13. Charles A. says:

    Years ago, as a new golfer, I played a pretty good game and found the sport to be great fun. Because of my tendency to over-think, and a desire to always improve, I started reading, listening to, and attempting every style and approach I could find. My game declined to a point where I was angry most of the time, and the fun and love of the game was gone. I learned an important lesson from this experience, and I vowed never to repeat this situation again.

    I am approaching FX with this in mind. I chose Nial’s method with the intent of learning Price Action and sticking to the basics, and KISS-ing my way to success.

  14. suraj chavan says:

    thankyou for this extraordinary lesson it always happens with me so now i can to better
    thank’s one’s again….

  15. bruno says:

    …So, don’t let losing trades get you down, if you have managed your risk effectively you should not care if you hit a few losers in a row as it’s bound to happen sooner or later, just keep sticking to your trading plan and trading with discipline…The key is to believe in your ‘edge’ and continue to subject yourself to opportunities when they present themselves on the charts…THAT’S THE GOSPEL; GR8 ARTICLE NIAL!

  16. Helen Bentley-Howard says:

    Thanks Nial for anothter pertinent, inspiring article. I had the problem that a A+++ set up looked far to obvious and that it could not be that easy! So hesitated in pulling the trigger. This lasted for almost 6 months. After 5 years of trading have accepted that the more obvious the price action trading signal, the greater my trading edge and therefore the greater chance of a winner. Cannot thank you enough for all your input, you have really helped turn my trading around. Helen

  17. Paul says:

    The best way I feel in overcoming the fear of taking on any trade is just keep the trade size small until you can clearly see your edge play out positively. Then and only then you can start to invest slightly more whilst again keeping the trade size at a comfortable amount until your account grows. Controlling the amount you risk has to be the sure fire way of keeping trading simple and stress free.

  18. aminul says:

    i like this and keep posting.

  19. Preciouschizy says:

    Great article Nial! I appreciate.

  20. Woody says:

    Hi Nials, Another great insight into trading, go with that gut feeling and with veins of ice, I never look back and have no regrets. Cheers Mate

  21. thambirajah says:

    Brilliant article Nial. Everything you said is true. I do not know how you read our minds. keep up the good work.
    Thank you very much.

  22. Agu says:

    price action….price action …price action …mmmm
    Double top/bottom…..123…moving averages…pinbars…Neil…a good man…letting out secrets…backtesting good…mmmmh forward testing best…
    relationship with the market..a good one..brings in profits..
    enjoy..buy a brand new car..with fx money..listen to Niel..forex prophet…
    Thanks!!!!!

  23. KirkB says:

    Good Lesson Nial! It is always good to be reminded of these critical realities we face every day as traders. The Market does what it does, without emotion or regard to our expectations. Any given trade can be a loser. Don’t tie your trading success or failure to any one trade or small sample of trades.

    As always, thanks for keeping it real!

  24. Mithun says:

    Thank you Nial .. The article is apt and it is motivating for me !!

  25. ed says:

    for me it’s a case of my results define me and that’s taking things too personally. yup, i have to remind myself that losses happen and it’s just a trade and success should not affect my self-esteem

  26. Mayur says:

    Great article Nial! BTW, since I’ve started trading daily charts my account has grown 3% in just 1 week. Would have been more had I not taken profit before the target was hit.

    There is less stress and desperation as well that is so common on smaller time frames. Even though I did well on smaller TF’s it still felt like walking over a land mine every time I entered the trade due to so much market noise prevalent in smaller TF’s.

    Anyway, I appreciate the insightful articles you write.

    Thanks

  27. Ramli M.S says:

    Thanks

    Big Cheers

  28. Mark says:

    The person that wrote this strikes me as someone that has been there through the hard yards, survived the nature of market and come out through the process fully in command of himself and as a trader. I sure hope my immaturity as a new trader doesn’t have to die something like 1000 deaths before I can approach this same plateau of wisdom, respect and empathy. This is great read, thank you.

  29. John says:

    Big thanks for this Nial! I am overly conservative and in the current market conditions I have skipped many more winning than losing trades. This leads to me thinking that there will be more chance of my next trade being a loser and making me more cautious. My focus should be on trading my edge not winning or losing. Thanks again for all your help. Cheers.

  30. Fount Shults says:

    Thanks, Nial. This is exactly what I needed today. Your lessons, strategies and articles are very helpful.

  31. Keith(from england) says:

    Hey Nial another great insight into the mind of a pro trader. I now do a screen print of every trade I do with all info marked on it followed by the result (win or loose). This gives great feedback and is beginning to work for me. I have had 4% growth in one month since. This is all down to you so a BIG THANKS.

  32. Johan says:

    VERY TRUE

  33. Ernie Vroom says:

    Fear is something that is built into your subconsence. It can be unlearned with hard work. The rule sets provided by Nial are some of the best there are. I agree with hindsight trading, not helpful. THopefully you read it twice. Good trading all

  34. pault says:

    very timely – nice to realise it happens to us all. just yesterday i miss trades i ‘knew’ i should have taken but didn’t

  35. samuel says:

    THis article is for me.I have been an hindsight trader.Now, iwill start to demo trade and face my fears.THank Nail,you are too good.

  36. Terhile says:

    Happens all the time. I think I sometimes overly conservative when entering trades. Nice lesson Nail.

  37. lindsay brown says:

    hi I guess of all the letters you have written This one more then any other sums up my predicament,and have got to the stage where i can find more reasons for not entering the trade then actually taking the trade,and have i believe put me in a position where i probably will not come to terms with it
    regards Lindsay

  38. Dillon says:

    Too true mate, do this all the time… I think for most noobies (myself included) we are risking too much in one trade. I have learnt now to control those urges and are doing much much better!

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