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stackingTrading really boils down to two things; what’s going on inside your head and what’s happening on your charts. The key is to get the two in-sync with one another, rather than on the collision course to disaster you may have them on right now.

Today’s lesson is going to be a ‘quick checklist’ of tips that you can begin using immediately to help tilt the odds of trading success in your favor.

No fluff. No ‘filler’. Just honest, effective and easy-to-understand tips to give you a better chance at making money in the markets.

Before we get started, I just want to inform you that this checklist is broken down into two main categories: Chart confluence and mental confluence. Confluence basically means ‘things coming together to a point’, in trading, this basically means stacking the odds in your favor. The more confluence a trade has, the more things there are that have come together to support that trade.

Ready?

Let’s go…

Chart Confluence

As a price action trader, my main concern is finding price action signals with confluence. When I say ‘confluence’, I am basically saying I want to see supporting factors or reasons why I should take a particular price action setup. The more supporting factors of confluence a price action pattern has, the more likely I am to enter the market from it.

Here’s a quick checklist of some factors of chart confluence you can look for to increase the chances of a price action signal turning into a profitable trade for you…

1. Is the trade setup obvious?

Learn what good price action signals look like and develop a gut feel for identifying them. For example, a pin bar signal with a nice long tail and small real body is usually a ‘safer’ pin bar to consider than one that’s ‘on the fence’ between being a pin bar and not being a pin bar. The best price action signals are usually very obvious and well-defined, and as a result, it shouldn’t take a lot of thought to determine something like “is this a good pin bar or not?”

2. Did the trade setup form in a trending market?

A price action trade signal that’s in-line with a strong trend has extra weight behind it and we can even consider the trend itself as a major factor of confluence supporting a particular trade signal. If you get a signal that forms after a retrace to a support or resistance level within a trend, that signal has formed at a high-probability point within that trend, and at that point it definitely has confluence.

3. If no trend, did it form at Key levels of support / resistance?

If you’re considering a price action setup that didn’t form in a trending market, did it form at a key level of support or resistance? In most cases, you want to see a signal form either in-line with a trend or from a key level of support or resistance if it’s against the trend or range-bound.

4. Is there an ‘event area’ nearby?

A chart event area is a highly confluent level of support or resistance that previously / recently saw a large directional movement of price originate from it. When you see price approaching one of these event area / levels, you need to take notice because they can be highly-confluent areas to watch for price action entry signals or even to consider a blind entry.

5. 50% retrace levels

A price action trade signal at a major 50% retrace level can also be a highly confluent setup. Often, you will see a key chart level of support or resistance lining up with a 50% retrace level of a major move, this is a very confluent level when this happens and if you get a well-defined price action trade signal there it’s almost a ‘no-brainer’ trade, meaning you should probably take it and not think too hard.

6. EMAs

EMAs or Exponential Moving Averages can provide us with another factor of chart confluence. A pullback to an EMA in a trending market can often yield a good entry point into a trending market. If you get a support or resistance level intersecting with an EMA and a price action signal forms there, that’s a highly-confluent trade setup that you may want to consider taking.

Mental Confluence

Besides the chart / technical aspect we discussed above, the other major aspect of trading you need to stack in your favor is the mental aspect. You can be the best market analyst in the world, but if you don’t have the proper ‘mental confluence’, you will never make consistent money in the market.

You need to have both price action confluence and mental confluence if you want to make money over the long-run in the market. By that I mean, just as a price action signal needs to form in the proper chart condition, i.e., with confluence, your mental state needs to be in the proper condition before you can trade profitably.

These are some things you can do to try and cultivate the proper trading mindset, so that you can further stack the trading odds in your favor…

1. Trading plan

A trading plan will glue together everything and help hold your mental state together. You can learn more on how to make your own trading plan in my trading course.

2. Accept reality, don’t fight it.

One huge thing many traders forget, is that the market will be there tomorrow. You should not feel any pressure to enter a trade or any ‘need’ to be in a trade. The more relaxed and patient you are about trading, the better you will do over the long-run. Don’t be in a rush, there are more trade signals just around the corner, tomorrow or the next day or next week. If there’s no obvious trade with chart confluence today, then check back again tomorrow.

3. Focus on higher time frames

Focusing on higher time frames is perhaps the easiest way to stay relaxed and ‘in the zone’ as you trade. When traders start focusing on 5 minute and 15 minute charts / other low time frames, they start getting over-involved, stressed out and ultimately it causes them to lose money. Trading higher time frames will help you develop and maintain mental confluence as you trade.

4. Listen to relaxing music as you analyze the markets

Recently, I came across this cool site called focusatwill.com that lets you pick from an array of relaxing music that is especially designed to help you focus and tune out distractions. I highly recommend it for analyzing the markets and staying calm / relaxed while doing so, or really for any type of online work.

5. Have a job

I know many of you are interested in trading because you want to quit your job and be financially ‘free’. But, you need to understand that if you put yourself in a position of ‘needing’ to make money trading too soon, you will end up losing money. Trading cannot be your ‘Plan A’ right out of the gate. It may take years before you can start paying your bills from your trading. You need to maintain your current employment so that you have income coming in. If you eventually get good enough at trading to quit your job then that’s awesome for you, but I can promise you it will never happen if you quit your job and make trading your ‘only option’ before you’re actually successful at it. To maintain the proper mental confluence to make money in the market, you need to be as stress-free as possible, and if you feel like you have ‘no other option’ but to make money trading, you’re going to become emotional and over-trade / over-leverage and ultimately lose.

6. Remove expectations

Many traders try to win every trade, and this ultimately causes them to lose money in the end. You need to accept that every trading strategy is going to have losing trades sometimes. Furthermore, the distribution of winners and losers is random. This means, even if you win 60% of your trades, you never know if any particular trade will be a winner or loser, since they are distributed randomly. Think of a jar full of 60% green marbles and 40% red, you shake the jar up so they are all randomly distributed. If you stick your hand in blind folded and pull out a marble, you have a random chance at a green or red marble, even though once you pull all the marbles out, 60% would be green. Thus, you have to give your trading edge a large series of trades to play out in your favor, and you can’t get too down over any one losing trade, because if you’re sticking to your trading plan, it’s just part of the game.

Don’t try to make every trade a winner. Instead, manage risk properly and just accept losing trades as a cost of being a trader / doing business in the market.

7. Be a minimalist

Creating ‘mental confluence’ to be a successful trader is all about taking a minimalistic approach to trading. Being relaxed about your trading, being patient and disciplined are all things that are much easier to achieve if you take a minimalistic approach to trading. This means, you don’t need indicators, you don’t need to analyze 40 different markets, you don’t need to look at lower time frames, you don’t need to stay up all night watching your trades, and you don’t need expensive data feeds or 10 computer monitors.

Set and forget your trades and become a trading minimalist and you will create the proper mental trading state simply as a ‘side effect’ of your minimalist approach to trading.

Conclusion…

Although to those on the outside, it may seem like it, trading success is not the result of getting lucky. Rather, it’s the end result of training and education on proper trading techniques like my price action trading techniques, experience / screen time and putting everything together. Essentially, trading success, like most things in life, is the end result of doing a lot of little things right, consistently.

It only takes one slip-up of your discipline to start an emotional snowball of trading mistakes. Using checklists like the one discussed in this lesson will help you develop proper trading habits, and developing these proper trading habits is really the only way to safe-guard yourself from continuing to have these slip-ups in your mental discipline or trading judgment.

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.

Now I want to hear from you! - Click Here to Leave a Comment

40 Comments

  1. smoky says:

    nial you have started again i wounder how you find time to write on people psycology more greace to your elbow

  2. azeem haroon says:

    you articals are great

  3. Boris Georgiev says:

    Awesome! Knowledge built for years is compressed in one page! Thank you! I’m following you for 3 years and all I know comes from You. Thank you once again!

  4. Lucy says:

    What else should I say? Just perfect like always.

  5. JK says:

    Another brilliant piece of great advice. Thank you Nial

  6. Adam says:

    Sir,
    I always improve, reading your articles.
    You are appreciated!!!

  7. Bluewest says:

    What I love to read Nial’s articles is, it teach me a lot related to discipline, this is not only applicable to trading, it also applies to everything in our life, thanks Nial, appreciate a lot

  8. harpreet singh says:

    great artical sir, thanks for hleping me

  9. med says:

    very good advices , very simple

    thank you Nial

  10. adrian says:

    Thanx Nial.

    This has been an absolute gem for me this week! The timing of your content was extremely helpful and I have printed it out to read it each morning as a guide to the day prior to trading. The more I internalize these factors the more they become me. Thanks again for your great teachings, excellent insights, & helpful advice. Your honesty is deeply respected and appreciated by everyone who reads your posts!

  11. Matteo Foschi says:

    Simply… The Best!

  12. odibeli says:

    Actually, & Thanks a lot!!!. When i advise people to invest more in their forex education, they feel that am slowing them “down”. Even the bible tells us that we should seek knowledge first. Hence it went on to say that “MY PEOPLE PERISH FOR LACK OF KNOWLEDGE”
    Once again Nial, for the NICE & FRUITFUL ARTICLE!!!

  13. Thabo Ntshisi says:

    Hi Nial

    Your lessons are very good more especial from beginners like me. Since I started your teaching I can able to see if other traders doing is correct or wrong.

    Thabo RSA

  14. Steve says:

    ” Stacking The Trading Odds in Your favor”
    I now see is what my trading life has been working towards.
    My learning has been slow and one step at a time.
    I work part time and trade live.
    I am twice the age of Nial, yet I recognize I have so much to learn.
    I put my EGO in the trash-can years ago to ride out the emotional storms.

    “Trading Confluence” Quote Nial Fuller, has been a profound Revelation to me.

  15. Rosario says:

    Nial, You are a great teacher.
    Thanks.

  16. Raymond Imomon says:

    Thank you sir. Good lesson.

  17. PERI says:

    Very relevant article indeed !

  18. Adriana Ghidau says:

    Hello Nial

    Today I really had a busy and hard day at work .And I said in my mind : I go home no tv and I read the last article of Nial !!as I need a big motivation and something to make me feel relaxed and happy !
    After 9 hours work I went home I made myself a good cup of deca coffe and took in my hands the article to read !! I just want to thank you Nial to give me this opportunity , to make me to understand lots about trading and make me to stay focused !! Trading will be my future and makes me happy ..I love trading and I try to follow your rules.
    And this is another great article clear and usefull !!
    Good day Nial ,regards Adriana

  19. emmanuel says:

    Hi Nial,

    You nailed it again.drove the points home.

    Thanks

  20. patrick says:

    I once was lost but now I have found. Thank you Nial for sharing a very insightful knowledge.

  21. Joy says:

    Hi Nial,

    I bought your course over 2 years ago and have followed your articles, videos and comments religiously.

    I have not commented on any of your posts but this one blew my mind away. It is so succinct and straight to the point.

    I’ll definitely print this off so I have a constant reminder of how to be more effective in my trading.

    Thanks for your hard work and dedication.

    God bless you. Amen

  22. martin swinn says:

    Great article Nial, you inspire people with the things you write. I often go over the archive you have built up , i find it so interesting and and great reference to check things.

  23. PeterG says:

    Thanks Nial for genuinely trying to help us .. your a champion mate

  24. Tantaswa Masebeni says:

    Hey Nial, you should have been a fortune teller(LOL). It seems as if you can read our minds as new traders, you know all our obstacles. But the best part of it is that you have simple, straight- to- the point and the best of solutions. I’m so glad i came across your website. THANKS. KEEP POSTING.

  25. Marcin Z says:

    Respect

  26. Ronald Wollendorf says:

    Hi Nial,

    Thanks for another article to keep us on track.
    There are a lot of temptations on a traders road, and sometimes it is hard to stay on track and following your plan.
    Your articles seems always to come at the right time.

    Thanks for the encouraging!!

  27. lakis says:

    cheers mate!!!
    As always another great article…
    unfortunately trading is a mental game and the most difficault thing in our heads is to change the way of thinking.
    Thanks for your help to do so ;)

  28. Thabo Ntshisi says:

    Hi Nail

    Thank you for a good teaching.

  29. Anton says:

    Very valueable article. opened my horizons to succeed role in my trading carrier. You are very abundant. I hope that good things always happen to you, thank you Nial

  30. Gilbert says:

    Thank you for your insight. I am continually going back to your trading lessons and feel like I have turned the corner. Your minimalist approach to trading has improved my odds greatly. Thanks again.

  31. Mr shah says:

    Nial you just said it all, in this one line “It only takes one slip-up of your discipline to start an emotional snowball of trading mistakes.” How I learn this the hard way every day.

  32. Theo says:

    Hi Nial,

    I am at the point where I am taking my trading to the next level and reading your article has cleared up quite a few grey areas for me.

    Cheers!

  33. Manish says:

    Its need big courage to share…
    Thanks for sharing this great article.

  34. Paul says:

    Hey Nial

    An excellent post, as usual from you

    I particularly like Mental Confluence #5

    That really resonates with me, because almost all the advertisements I come across (the get rich quick, or even get rich slow) type, imply that they are ‘the holy grail answer to all ones money worries.

    I am sure that I can not be alone in wanting to master technical ‘trading’ to such an extent that when I retire from my full time job (I find my career and developing it to be highly motivating so am in no particular rush to retire from it) that I am sufficiently knowledgeable & skilled that I have empowered myself to be able to responsibly manage my retirement fund, to sustain myself and my family for the rest of my life

    So I definitely see that particular confluence, but for an additional reason to the ones stated

    thank you so much
    best
    Paul

  35. Brett Reynolds says:

    Always good to affirm and re-affairm…again & again! Getting into a relaxed routine, keeping calm and collected has helped my trading immensely over the last 6 months especially!

  36. Greg says:

    Brilliant article again Nial! Cheers!!

  37. Phattarapong says:

    Great article!!!

  38. Chaudhary Pankj Srivastava says:

    Another GR888 article by you Mr. Nial Fuller.

  39. Hugo Rugge says:

    great article as always Nial ! keep them coming.

  40. Emil Moul says:

    Nial – I always look out for your weekly story. They are just so topical and relevant. Thanks.

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