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gambler-300x235You might be treating the forex market like your own personal casino right now and not even know it. In fact, if you are like many people trading the forex market, you are probably more of a gambler than a trader. Traders who fail at making money consistently in the market have a gamblers mindset; they do not have the professional mindset and habits that consistently profitable traders have. How do you know if you are approaching the market like it is a casino or like it is a business? This article will answer this question for you and it will give you some insight into how professional traders think and act, it will also discuss how price action trading can foster a professional trading mindset.

• Are YOU a forex gambler?

There are basically two types of people trading the forex market at any given time; people who are gambling with their money, and professional traders who treat forex trading like a business. As you probably could guess, the gambling traders are the ones who lose money; the professional traders are the ones who make money.

In order to determine whether or not you are a gambler in the forex market, let’s discuss some of the most common characteristics of gamblers, if you are shocked at how many apply to you there is no need to worry; this article is the first step in changing your mindset from that of a gambler to that of a professional trader.

• Characteristics of gamblers…

Gamblers are addicts; they are people who do the same thing over and over just to get a euphoric “high”, even if it hurts them or loved ones. Gamblers think of a trip to the casino as a non-professional event, they view it as a hobby, or as something to do with their free time. Unfortunately, this “hobby” often turns into an addiction, one that can cost thousands of dollars to sustain. Gamblers become addicted to the “hope” of gambling, this is why they keep losing and don’t change their habits, they put more and more money into their gambling addiction, sometimes even funding it on credit. Gamblers believe they are always “one away” from that next big jackpot or that next lucky card, so they continue to throw more money on the table, convinced that it will all be worth it in the end, because they think they will ultimately just make back everything they have lost and much more. Typically, what happens to most gamblers is that they lose so much money they eventually snap out of their haze and walk away much poorer, or some sort of intervention is required to wake them up to the reality of what they are doing. Now, we aren’t talking about a once a year trip to the casino here, we are talking about a full-fledge gambling addiction.

Unfortunately, many traders treat their forex trading activities exactly like a gambler would. Many forex traders become addicted to the feeling of “hope”, essentially they become addicted to the feeling of getting rich or that the next “big one” is right around the corner. This causes them to behave like they are a gambling addict in a casino; pumping increasing amounts of money into their trading accounts, risking random amounts with no money management plan, meddling in trades after they are live for no good reason, chasing the market, and a whole host of other addictive trading errors.

Traders who are addicted to trading get too much enjoyment out of it. Even when they are losing money they are thinking about ways to “make it back”, or how this is just a temporary set-back and so they immediately begin looking for another setup to trade. For traders who treat the market like a casino, reality becomes a thing of the past, they enter into a sick world of over-trading and over-leveraging their accounts because they are operating purely on greed and hope, all the while ignoring the true reality of the risk involved on every trade. Gambling addicts in a casino think and act exactly like forex trading addicts do while in the comfort of their own homes, it is the habits and mindset of a professional trader that separates him or her from a forex gambler. Let’s now discuss how a professional looks at the market and how you can begin to change your gambling mindset and habits.

• Professional forex traders…

In order to become a professional forex trader, you must begin a transition from gambler to professional, this transition will begin in your mind and it will direct you in creating a different reality which will include positive trading habits that will work to reinforce your professional trader mindset.

In order to begin thinking like a professional trader you must think about trading as a business, and just like any business you must understand there is risk involved, real risk, you must figure out a way to compensate for this risk that doesn’t involve running your costs up so high you cannot operate the business anymore. In the mind of a professional forex trader, money management is the way to manage one’s risk. Correctly understanding and implementing risk reward strategies is the way professional traders compensate for the risk involved in any trade, combined with a refined sense of patience when selecting trades.

Professional traders typically get very little enjoyment out of entering or exiting a trade because they encounter very few, if any, surprising moments in the market like gamblers do, this is because professional traders know what they are going to do in the market before they do it, in other words, they have a forex trading plan. The fact that professional traders have mastered their forex trading strategy, means they don’t lose money and then seek to immediately trade to make it back, they are confident in their trading strategy and they rely on the long-term edge to recover any short-term losses. Professional traders trade only a small basket of major currency pairs and only a few reliable setups. Patience and precision are the tools that a professional trader employs each time they interact with the market, in comparison, gambling traders take random shots in the dark with a very limited supply of ammo; they do this because it makes them feel good, and it gives them their trading “fix”.

• What you can do now…

Here are a few things you can begin doing immediately to begin the transition from being a gambler into thinking and acting like a professional trader:

• Be realistic about how much money you can make given the amount you have at your disposal to trade with. Don’t put unrealistic expectations on yourself and you will be far less likely to over-trade or over-leverage your account. Make sure you can sleep soundly at night with the amount of money you have at risk on a trade.

• Begin thinking about the forex market as an arena for self-improvement. Understand that the degree to which you have limited or no control over your own behavior and emotion, will be the degree to which you lose money in the market. The more you operate on logic and pre-emption, the more likely you are to make consistent money in the market. You will likely notice a shift in your daily behavior and mental state in all your activities and relationships, not just with trading, when you become more emotionally controlled and self-aware.

• Start keeping a trading journal, record all aspects of your trades before and after you enter them. All businesses must track their expenses and manage their daily activities, having a tangible trading journal that you force yourself to keep up-to-date is an excellent way to keep yourself accountable and to keep your mind focused like a business person instead of a gambler.

• Model yourself after successful people…

Following the forex trading strategies and the mindset of a professional trader can help you greatly in making the transition from gambler to professional trader. Professional traders are much simpler than what many beginning or gambling traders might assume; if you walked into a pro trader’s office, you would not find any complex indicator-laden trading systems. The reasoning for this is simple; the industry hype is overrated and does not work, people sell trading systems that don’t work and that are over-complicated because they are not professional traders. I teach plain vanilla price action strategies to my students because it has brought me many years of stress-free profitable trading, and I know that by adopting my professional trading strategies and way of thinking, you too can become a profitable trader. If after reading this article you KNOW that you are stuck in a cycle of gambling and trading for pleasure, then it’s time to make a shift in order to profit, after all, you cannot expect different results if you don’t change what you are doing.

If you want to learn more about successful forex trading and employing the power of simple price action strategies, please visit my Price Action Forex Trading Course page here

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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66 Comments

  1. Dean says:

    Gospel, Apparently you’ve been there done that, or have just seen the blatant folly of others,and how obviously missing the point they were. I see that I can only expect to be taken seriously as a trader if I take it seriously, a professional attitude, and documentation to substantiate the story. Thank-you for the reality check, a kick in the pants at the right time to help me change what I have the power to change. I will become a proficient trader, focused and disciplined.

  2. frank nigeria says:

    Nial you would not understand how much you have helped lot of us thats been on the losing side in forex, but now just by following your simple methods you have thought us i have been able to build confidence in my trades and also starting building my accounts gradually. God bless you and grant you more insight.

  3. Xin says:

    nice article Nial…
    then we understood…
    that the opposite of Fear is not Dare,
    but Greed…
    :-)

  4. RahmanSL says:

    Deep down, most of us know what has to be done to get the job done properly.
    Given a choice, most of us will pick the powerful sports car over a sensible basic car to get from point A to B.
    Both vehicles can get us there, but the probability of an accident before arriving at point B is greater in the sports car….plus more fuel cost too.

    In forex, we all know (or should know) that proper risk management is the key to profitable trades.
    We all know that if we leave our small sensible trade over a period of time, the TP will be triggered and we make profits which will better most (if not all) interest given out by fixed bank deposit.
    And trading one small sensible trade at a time would be damn near impossible to jeopardize our trading account.

    But the problem is most of us are impatience to get from point A to B…and even if we do get to point B (our target TP) our mind would ask “Why stop here? Why not go beyond point B and see what else is there?” Inadvertently, we over trade and in the process mess up our account.

    Well, it’s true that we are not created equal as profitable traders need losers to get their profits as these profits have to come from somebody losing money in the first place.

    Just to get here where we are now, we have to beat around 20 millions competitors for the right to be born!
    We are all indeed very unique individuals,highly competitive in nature, and survivals.
    So, why are we not applying our natural instinct in the world of forex?
    We all know what have to be, and needs to be done in order to become profitable.What’s stopping us???

  5. Intazar Hussain says:

    Very true about the mindset. My mentor said to me about changing my mindset to succeed in forex.

  6. atefe says:

    Hi Nial,thank you very much,all of them are useful.

  7. Anton says:

    Thank you very much Nail, I was surprised that after one year of my trading I am thinking much more like gambler than trader. I know your website and Price action only one week, but I already red many your articles and saw many videos. You are really GURU of trading. Keep doing.

    Anton

  8. chris says:

    Another excellent and very relevant article. A bit of honest self analysis, reminds me of an old quote “If you see money as the solution, it quickly becomes the problem”!!!

  9. Jo says:

    Niall, great article. straightforward and very effective. It is an eye-opener , I am about to give up after losing some money but after reading this article I can see that the problem is in my mindset….thank you for sharing
    J

  10. Shahid says:

    Most valuable and great words of wisdom to set me on the right track to be a consistent profitable forex trader.
    Thanks for the very nice and great word done.
    Shahid

  11. Behzad says:

    very good article Nial

    Many Thanks

    Behzad

  12. Harmen says:

    Going though your articles and videos whilst seriously considering taking your course. I’m looking forward to employing your methods very soon!

    Keep up the good work!

    Harmen

  13. Mark says:

    Excellent article Nial.
    Thank you.

  14. jason says:

    all of ur lesson’s r very helpful even more so the lesson’s that teach me how to aproch forex with the right mindset realistic goals i am happy to say i enjoy forex just as serious as i take it. it has hepled me define who i am and where i wanna be.

  15. Pete Turner says:

    Thanks Nial, enjoyed reading your article, wholly agree with the sentiment & a reminder of what all of us should be doing!

  16. Zenny says:

    I totally agree with you Nial, if you keep your mind on risk management or how much you are willing to pay (when you buy). Then how much you want to get paid for your gods (trade) when you sell. It become much easier to understand the business aproach to the market.
    Thank you and best whishes for 2011

  17. Ken says:

    Thanks Nial.Another very good article.

    I’m an old man with too many failed trades behind me. Now I know from experience that you tell it like it is.

  18. Allan Clarke says:

    Great article again as always Nial, Particularly at this time of year, the period of review! many thanks for all your support and seasons greetings and best wishes for the new year

  19. Niall, great article. Well defined and very effective. An eye-opener.Thank you for sharing your vast insight.

  20. Alice says:

    Heard it before and will try not to forget words of a professional trader.

  21. Pedro Martins says:

    Another great article, Nial!
    It’s really great that you share your experience with the newbies like me.
    My best wishes to you. May you have a great 2011 in all aspects of your life.

  22. LUKE PEACEMAKER says:

    I was what you described as a gambler til i started following your strategy and my mind set has changed dramaticly and when i read this i realized that this is working for me thanks Nial, merry christmas and happpy new year.

  23. rikus says:

    Merry Christmas and A Happy New Year 2011! Nial.

    Thanks for your great article and it helps me a lot.

  24. James E says:

    Awesome common sense article as always Nial. This guy’s the best! I cant believe Ive been lucky enough to find his methods since the start of my trading career, or that he takes the time to teach this stuff, it’s as close to a grail method as you can get. Merry xmas all;)

  25. Butch says:

    Happy holidays Nial:

    Another article of truthful and precise insight. Had to learn this one the hard way. My character was one of impatience and over-indulgence. The market taught me that if I didn’t change this behavior, I wouldn’t be around long in this business. After 2 years I can say I’m a different person because of this business. I’m going to my live account New Years. I’m comfortable with my simple system (price action being the hub) and trading higher timeframes. Thanks for 2010. My relationship with LTTTM helped not only with technical advice but with my mindset to succeed. See ya in 2011.

  26. seb says:

    Nice one Nial, Must say that 2010 has been a great year of inspiration and learning, and finding your website on the internet! was probably the best stroke of luck i could of had to start me off, on this new road to the freedom i have allways been serching for…

    thanks a million! And i very much look foward to being part of your members forum soon…

    Have a BIG and good one! and mery xrismas & happy new year to everybody..

  27. Gary says:

    Thanks for all your advice over the years Nial, another great article. Over the years i made every error you have outlined like many traders, unfortunately i only truely learn a lesson once ive learnt the hard way..guess i have to walk the line, with your help iam now moving forward..
    Merry xmas and happy new year.

  28. Frank says:

    Nial
    This is a very bright article! Your mails are always plenty of advice, methods and risk prevention that are really helpfull in circumstances I’m trying to make a professionnal approach of forex. Thank you for all; I wish you the best and 100% positive support in your business.

    Frank, France

  29. peter says:

    hi yes i’m your gambler but i have read and watched your videos for awhile and starting to change my mindset to more of the bisiness side and understanding more i look foreward 2011 where i will do price action course and become more focused all the best to all.

  30. sri says:

    dear Nial,

    Wishing you a wonderful Merry Xmas, and Prosperous Happy New Year…!!!

    Your articles are really worth to spent the time and to read it.

    Regards
    Sri

  31. Hubert says:

    Nial, Nobody of your students will blow out its account if he follows you in the essentials. They will stay with you for a long time!!! I hope and wish you that it works out like you wish.

  32. Carolinee Lawton says:

    Hi and Merry Xmas. Just wanted to add that over the last 9 months I have found your articles and lessons very informative and easy reading, and those are just the FREE ones – which is very good of you to share, and a good business approach.
    Your insight to trading has completely changed how I trade, from using every indicator in the book, where when my screen looked like a work of art, to the that of using Price Action.
    Your lessons and articles have enabled me to gain a much better understanding of how and when to trade, which I have successfully employed in a Demo account over the last year. Yes, a long time in a demo, but I work full time, and more importantly I had set out a number of targets and objectives that I wanted to achieve before opening a live account.
    Those have been achieved and I have made a consistent profit over a 5 month period, and have seen my losses become smaller and profits become larger. My next step in 2011 is to take what I have learnt and apply it in a Live account, which I have just opened.
    I have set out another set of targets and objectives for 2011, one of which is to join your course to aid me further, and I also intend to trade at a low leverage first to test out my trading skills over the forthcoming year, at which point I will step up the leverage. My comment is a little self indulgent, but without your articles and lessons I would not be at this stage, so thanks.

    1. nial says:

      Thanks Carolinee, great to see your doing well

  33. lok bahadur shahi says:

    this is really very useful article. i would like to give grateful thanks to Nail. I read its mostly article.

  34. Sergio says:

    Thanks for sharing your material Nial, very professional and to the point. Have a great Xmas and happy new year

    God bless

    Sergio

  35. Hans says:

    Makes a lot of sence to me to trade with a chart devoid of clutter,merry Xmas and fruitfull trading after the new year Nial.
    Cheers

  36. Ricardo Pica says:

    Hi Nial,

    As always, this is a great article and everyone should read it.

    I’d like to thanks you for all of your support and dedication to your students.
    My first experience with forex market (two years ago) was bad and the reason that I have returned and try once more is because the knolgement that I acquire from your course, lessons, videos and all your answers to my queries.
    Merry Christmas to you.

    Cheers.

  37. geoff says:

    Great article as usual Nial, I’ve learned so many great things from you already, Have a great christmas and thanks loads.

  38. Michael says:

    Good stuff Nial as usual, I hope to be subscribing to your service next year, price action IS the real deal and I hope to get somewhere near to your levels of success by following your teachings.

    Have a great Chistmas and a happy, healthy & prosperous 2011

  39. Yo Sap says:

    I know exactly what you mean. I was a gambler most of my adult my life and it was very tough. Now I stop trading because I want to learn how to control my emotion first. Nial’s price action has allowed me to do that. Thanks.

  40. ernie says:

    Nial is the only trainer out there trying to give you the whole picture of what it takes to become a professional trader. Unfortunatly most people will not listen until they are forced too.

    Well done Sir

  41. T Allen says:

    Great article Nial. Thanks for your consistent efforts to keep us on the right track in 2010 and thanks for the Christmas Wishes. Our desire is that you will have a wonderful Christmas and a Happy New Year also. We look forward to your insights and coaching in the New Year !!

  42. VTLSK says:

    Happy Holidays Nail and all.
    Great article, thanks.

  43. Kenny says:

    Great article Nial. Not having your trading set up as a professional business can have detrimental effects on a person’s trading success overall. Although there is a time and place to gamble if one chooses to do so, the Forex market is definitely not the place. Price action Price action Price action! It’s as simple as that!

  44. mgp says:

    Merry X Mas Guru ..

    You show me a real world business . Thank you very much.

    Article as usual no exception very great !!

  45. George Sessom says:

    Thanks Nial, Another Great article.

  46. Sher says:

    Thank you Nial for yet another thought provoking article, you always seem to know what it is aspiring traders need to hear, our job is to learn from it, i hope we do, so we are able to make 2011 our most successful yet. Merry Christmas and a Happy new year when it comes, looking forward to your insights for the coming year. Thank you.

  47. abayomi says:

    Very informative. Thanks Nial for all the priceless materials u publish

  48. ope2 says:

    I really appreciate your words of encouragement, these worth thousand dollars. Nail thanks

  49. Jim Malcolm says:

    Nial

    My son has been badgering me to have a go at Forex trading. I dont have a clue about this but certainly interested enough to start small. I am about to retire in 6 months so this would be a good interest and possible earn some pocket money. My background is sales dirctor in O&G with a global company. So where should I start and how?

    Jim

    1. nial says:

      Start by reading my lessons and watching videos. Email me via support tab with further queries. Thanks, Nial.

  50. Abdul Rahim says:

    Great points Nial.I can see that trading forex is something that we can learn and master and with the right training and experiance we can be a successful traders like many I have seen.Whilest gambling is based merely on ‘luck’, it’s not a business and it’s sinfull too.

  51. Charley Hankins says:

    Good insight. Forced me to look at my own trading habits more closely.

  52. Ken Gilfillan says:

    Merry Christmas!
    Another “right-on” article. Thanks for your professional insights.

  53. feelgooddoc7 says:

    Hi Nial,
    Merry Christmas to you. A useful article, that makes us relook at how we have been trading. Thanks.

  54. mima says:

    I like to do Forex as a life:simple, meaningful, with enjoy without stress, just base on simple principles that really works,the way you look in Forex trading. I want to thank you to give us this valuable point of view!

  55. Tim Berkshire says:

    Nial, reading this article, makes you think about how you have been trading, and how you can change. Thanks Tim.

  56. Domantas says:

    I would like to shake your hand , and say thank you, for all your lessons ant tips! You changed my life !

  57. Bruce says:

    Great advice Nial (as always) and thanks to an earlier newsletter of yours about how it is better to not be in the market when a set-up is not that strong in order to be a professional and consistant profitable trader, I have reduced my own exposure to the point that I found a better setup on my daily (that’s as low as I go) charts!

    For that I give you the credit. So now I only enter a trade on Tuesday – Thursday and follow 8 pairs ONLY. When I did the backtest, it was HIGHLY profitable (even when the market went against me) and it really has gave me back a lot of my free time!

    Thanks Nial!

  58. Wes says:

    Merry Christmas to you Nial.
    It’s been about a year now but I still remember the first trade I ever made where it was completely void of emotion. It was on the AUD/USD. The setup was there so after a quick double-check, I simply placed my order and went to bed. Got up in the morning to 87 pips, and finally closed it out at around 140. But it was not the profit that I was proud of; it was the totally unemotional, “just business” attitude I had through the whole thing. One last thing… IMHO, losing trades are where we really learn and simply a fact of trading. So once one accepts that, they can start to get rid of that dreaded “gambling” emotion and start trading.

  59. FxGreek says:

    Good and Instructive article.
    The part about keeping a journal, I find a bit boring!
    The equity growth/decline of your trading account is the best journal there is.
    True one should not take pot-shots trying to hit a target!
    One should have an arsenal of multiple strategies at hand, and the wisdom to use the one applicable to the circumstance at hand! AND the FAITH to stick buy your guns ..should you temporarily find yourself underwater!
    Always remember in forex, your are dealing with LUNATICS that have more money than you do!
    Develop the nack to PUT IT to them, when they get OUT of wack!

  60. Mike says:

    Your articles are always informative and to the point.

    All the best for 2011

  61. Peter Sorensen says:

    Hello Nial
    Thanks for a great reading. I have decided that next year is my year in forex. Till now I been going around im circles. Not really going anyway. But I will work hard like a beast next year, so your reading was great. I will try be a trader not a gambler. I hope to get more from you next year.

  62. Ali says:

    thanks dear Nial, your lessons always are perfect and very good for traders who wants trade on a best strategy.

  63. Ezzywave says:

    Top article Nial – a lot of useful points well made.

    Merry Christmas and a prosperous 2011!

  64. Zak says:

    Bitter truth, right words, and true sense. Nice article Nial! Thanks.

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