Break Through the ‘Wall’ of Trading Mistakes Holding you Back
If you are one of the many traders who find themselves continuously whittling down their trading account to nothing after re-funding it over and over, today’s article is for you.
This might just be the most important trading article you ever read, because I’m going to show you how you can finally stop repeating the same trading mistakes over and over. Learning from our trading mistakes and actually making permanent changes from what we’ve learned, is the key to making consistent money in the markets. If you don’t learn from your mistakes, you are going to be like a hamster that is continuously running on a hamster wheel but never actually going anywhere.
Read on to learn how I stopped making the same trading mistakes that are probably hurting you right now…
Acquire the right trading mindset.
You may have read other articles I’ve written about the proper trading mindset, but it’s importance cannot be emphasized enough. All trading success begins from obtaining and perhaps more importantly (and more difficult) MAINTAINING the proper trading mindset or trader psychology.
Everyone says that ‘emotions are the enemy’ of trading success and similar anecdotes. But, I feel that is too general, allow me to explain why I feel this way…
First off, emotions are not all bad in the trading realm, in fact they can be helpful and very enjoyable sometimes. For example, once you have developed a solid gut trading feel, you will eventually develop a sort of internal ‘early-warning’ system when a trade isn’t right, in other words, your fear kicks in, in a good and helpful way. However, fear can also hurt you if you become afraid to take a perfectly good trade setup, etc. So, as we can see, one cannot simply say that “emotions are all bad” when it comes to trading.
Whether or not you let emotions influence you in a negative way is what can make them dangerous, not the actual emotion itself; in important distinction to make. Being conscious and aware of your emotions as you trade will allow you to make adjustments and take control over you actions in the market, and this is probably the biggest thing you can do to help yourself stop making the same trading mistakes over and over. Most trading mistakes are born out of letting emotion influence us negatively, so if we are more self-aware of our emotions as we trade, we can work to make sure they are not influencing us to stray from our trading plan.
Learn proper money management.
If you are repeatedly risking too much per trade, your emotions and mindset are going to repeatedly be hurting, rather than helping, your trading performance. Indeed, money management is one of the biggest keys to remaining calm and collected and not letting emotion negatively influence us as we trade.
In my opinion, the control of one’s self in the market all begins with proper trading money management. As a result, I view money management as the foundation of a proper trading mindset, because if you aren’t always worried about how much you ‘might’ lose on a trade, you won’t let emotions affect you negatively.
You have to risk an amount per trade that will not cause you emotional ‘pain’ if the trade loses, this is the only way to survive a losing trade. If you risk too much per trade, you open yourself up to committing the same trading mistake again; because you will be feeling frustration and anger from losing too much money, you will feel an urge to jump back into the market and try and make that money back. This is a vicious cycle that will continue until you figure out what dollar amount per trade you can comfortably risk.
Change how you think about trading.
Once I began to change my definition and idea of ‘trading success’, it became a lot easier to achieve it. Most beginning traders believe that they are going to dramatically change their lives through trading, very quickly. Unfortunately, this is simply not reality, especially not if you don’t have much money to trade with, and it also causes you to stay on the ‘hamster wheel’ of trading mistakes.
You have to take a slowed-down and longer-term approach to trading and to what you view as ‘successful trading’. Let me ask you this, if you had just one or two winning trades per month and say one loser (3 trades total), rather than 30 trades where over half were losers and some of your winners were little, insignificant ones, which result would you consider to be ‘successful’? Probably the first one right? Well, that’s right, it would be the first one because if you took just three trades in a month, rather than 30, that tells me you were being patient, disciplined and strategic in your trading approach, rather than impulsive and random.
Where most traders get ‘stuck’, is that if they trade LESS they only see it as ‘making less money’, but THAT is the wrong way to think about trading.
You see, as I explained in an article I wrote on high frequency vs. low frequency trading, YOU DO NOT NEED TO TRADE A LOT to make money. Remember, MAKING MONEY is better than losing money, even if you can’t risk very much per trade because you have a small account. You have to trade as if you’re already a rich successful trader, because that is how you become one.
A rich, successful trader who can take a big position size on every trade he or she takes is naturally going to be much more interested in finding one or two very high-probability and obvious trade signals per month, rather than trading every day. Why? Well, because they know they are going to make a lot of money due to the big position sizes they can trade, they know that one or two good winners a month is all they need to make a lot of money, so they aren’t concerned with trading a lot, only with finding good trades. This is how you SHOULD think and what you should DO in the market, even if you have a small account.
You should do this because trading less frequently but more accurately is how the pros trade and it’s the only real way to avoid losing money by over-trading which results in whittling down your trading account to nothing. You need to keep in mind that proper trading is the goal…that IS successful trading, EVEN IF you’re not currently trading big enough size to make ‘a lot’ of money. I promise you, if you trade properly for long enough, you will gradually build your account over time and that means you gradually increase position size, and eventually you will be making ‘a lot’ of money trading and you won’t give it back because you built your trading approach on a solid foundation of proper trading habits.
Make a plan and stick to it.
Finally, learning from your trading mistakes is one thing, but you have to actually USE what you’ve learned, and by ‘use what you’ve learned’, I mean making a conscious effort to avoid those mistakes on your next trade. Take what you’ve learned and put it into your trading plan and read that plan everyday. Often, the only way we can get off the ‘hamster wheel’ of trading mistakes, is by constantly being aware and monitoring ourselves so we don’t make those mistakes again. Trading is a mentally tricky business, if you don’t have a trading strategy and a trading plan, you will probably let your emotions get the best of you.
37 Comments Leave a Comment
Thank you Nial.
All I Can say is THANK YOU Nail.
Great article. Thanks for such a wonderful information. Choosing a good trading platform can also help to be a successful trader.
What a lovely piece. You always hit the nail on the head.
Thanks a lot.
Fruitful as always
Amazing as usual !!!
Very good article.Thanks.
Thank you nial for your valuble infomation and guiding me into my own trading style where i could master it to perfection i have found away to tweak your stratergy and make it unbeatable thanks nial much love …
Millions of respect for You! I ve never read such articles in the net that can share insights of real generous pro trader like You!
Only by reading and implementing your trading rules and technics I am making good progress in my trading. Thank You.
This bit sticks out…
“I promise you, if you trade properly for long enough, you will gradually build your account over time and that means you gradually increase position size, and eventually you will be making ‘a lot’ of money trading and you won’t give it back because you built your trading approach on a solid foundation of proper trading habits.”
gradually increasing position size is a key part that is possibly not as well covered. Been here for 4 years, still reading and learning, but position size is increasing!!!
Thanks for this Knolege I learned enough I was about to giving up with my account
Thank you for your wisdom on trading
Awesome, I appreciate your effort in educating us on forex issues, i can say that article is written because of me thanks a lot
Thanks for your wisdom filled advice! As usual, another gem!
This article remind me many things!!
God Bless You Nial!!
Perfect way to explain,the physiology,and it’s amazing performance,in your personal trading,a must!! As in your life,keep everything simple
Thanks a lot for your wise words Mr Nial,your advise has truly changed the way i trade for the better.I can now call myself a forex trader and it`s all thanks to you.You are one of the best traders i wish to meet in person one day,just to shake your hand and say “Thank you”.
This articles is worth more than knowing ‘Technical and Fundamental’ aspects of trading. Your good mind is a blessings to us all.
I have been through all four mistakes now my trading performance has changed completely on avoiding them.
Very good article
Thanks Nial, you constantly reminded us the importance of sticking to the right trading plan. I had seen the importance of money management to avoid panic feeling during a trade, all thanks to your effort to remind us. Keep it up Nial!
Great article. Nial as always writes timely and hits the nail on the head.Though I have many Forex teachers that I have never met,Nial is one of those I hope to meet one day God-willing, and say ‘thank you’!
‘trading is a mentally tricking business’ , this is a loaded piece of info!
What a relevant article on trader’s struggles. You described exactly what I’m stuck with. I play catch up quite often and guess what? Bigger sh**t happens! Then I overtrade like crazy with bigger size… rinse and repeat… for years! This article will help me to leave the hamster wheel of trading I’ve been stuck with for years!!
Wow!! Thanks for the advice..
Truth spoken. From experience when engaging in intraday trading based on information where banks leave big limit orders (pip precision) to get filled. I can tell if you take every one of them not considering trend and levels you will overtrade and at best break even and end up frustrated from going nowhere. So agreed Less is absolutely much better and D1 is the king.
refreshing article! thanks Nial
Awesome. Simply awesome. You seem to know what is in your students minds! :) Thank you.
Thanks Nial, you are right, lack of proper money management creates panic in us after entering a trade. Sometimes we exit with a little profit or a little loss but only for us to find out later that the trade went very much just the way we had predicted.
So to me proper money management remains the key. It gives one a relaxed mind after entering a trade because you know even though i loose it won’t be much. Learn t a lot from you Nial. Thanks.
Amazing article. Thanks.
To be honest this is very powerful
Your repeatedly message keep remind me, as well as changed me already. And that’s the best of teacher can show how important it is. The way I trade now mostly influence by your trading direction for years, posted on this website.
From M30 trading several years ago, I have shifted trading on minimum H4. A very relaxed but highly rewarding trading experience. Proven consistency per month outcome for over a year, and ongoing transition into fulltime trading. (finally..)
Thanks and thanks Nial,
always waiting for your next post.
Congratulations well done , this would have to be every one aim.
Nial, I appreciate your effort to speak the truth.
The usual great and very pertinent article Nial.
Especially when my first two trades this month gave me a 9 % return.
I took another 5 trades for the month and ended up with a 6% return.
Perhaps I should have stopped after the two nice winners.
Well written Nial.Every friday is a Learning day.Its worth.Good work done
Great article coach! Learning does not stop!????