The Market Will Deceive You If You Let It
The cold hard truth about trading the financial markets is that the things you’re led to believe are important are often not as important as you think. Typically, the most important parts of trading are rarely discussed in-depth and seem to just get ‘blended’ into the background of the conversation.
Remember, this is an industry where on a good year 5 to 10% of those who attempt to trade with real money will actually make money at year’s end. Professional traders are the ones making most of that money and they are your competition. Hence, they are not going to go out of their way to make sure everyone knows the reality of trading and the most important skills and issues to focus on to further your trading career.
The reality of trading the markets is that almost everything about it is deceiving and counter-intuitive or contrarian in some form. I liken trading to the greatest chess match ever invented. You’re competing against every other trader including yourself, which can be the toughest opponent of them all.
In this lesson, I am going to discuss several of the most deceptive aspects of trading that most retail traders only discover when it’s too late, after they’ve already blown numerous accounts and exited the business forever, mentally and financially broken.
How I can help you avoid being deceived by the market…
The issues discussed below are things you are not going to really be thinking about when you first start trading. They are normally discovered a year or two into real-money trading, after most people have already lost more money than they care to acknowledge.
Hence, I am simply fast-tracking your knowledge a few years in today’s lesson by filling in the blanks and giving you some of the missing puzzle pieces that you may not even be aware are missing yet. It is my intention to both warn you and educate you on how to overcome these issues so that they don’t ruin your trading career.
My own experiences from over 18 years of real-money trading in global financial markets have taught me many, many lessons. I don’t have all the answers and there certainly is no silver-bullet to trading success. However, I have gained some very powerful insights over my trading career, and as a beginning trader one of the most important things to be aware of and conquer, is the deceiving nature of trading and the industry surrounding it.
The following points are some of the most deceiving aspects of trading combined with some solutions to help you not fall prey to them, hence speeding up your trading journey…
It’s easy to enter, hard to exit.
Many traders, not only beginners either, have a tendency to over-focus on trade entries and trying to find some ‘magic’ trading system or mechanical trading software that will just allow them to print money on autopilot. This isn’t all your fault either. The trading industry definitely pushes trade entries and ‘systems’ over trade exits (because that is what sells and gets people to trade), money management and psychology, which are the more important aspects of trading. The fact is, it’s much harder to exit a trade properly than it is to enter, so that is what the majority of your attention should be focused on.
Keep in mind, when I say “trade exit”, I am referring to everything surrounding a trade exit. The stop loss, position size, risk reward, support and resistance levels, the average true range, etc. There are many factors one must consider when planning trade exits, yet for most traders it seems to just be an afterthought.
- How to not get deceived by this
One of the reasons traders are so easily deceived by this entry / exit issue is that all that is really discussed and sold online and elsewhere, are trade entry systems that simply don’t stress the importance of the exit.
As I pointed out in my article A Case Study of Random Entry and Risk Reward, with proper money management and risk reward (trade exits) a trader can actually make money even with a totally random entry system. Now, that doesn’t mean the entry isn’t important, because you can combine a high-probability entry method with proper trade exits to improve your trading performance far beyond just a random entry method. The point is, the exit system is much more important than the entry system you use. So, just keep this in mind as you are out there surfing the web and reading tons of different trading blogs. I have multiple sections of my advanced trading course dedicated to the topics of money management, risk reward and trade exits.
Hopefully, after reading this, you will start to think just as much, if not more, about the trade’s exit than its entry, because the money is made or lost on the trade exit, not on the entry, contrary to popular opinion.
It’s easy to fund an account, hard to build it and harder to make the withdraw of profits.
The trading industry, e.g. brokers, make it easy to fund a trading account yet they put very little emphasis on how to actually make money and that you should be withdrawing some of your profits on a regular basis. You have to remember that no one actually cares about you making money as a trader except you (and me).
Your goal as a trader is always to make money in order to withdraw money so that you can actually use it (or save it). The point of trading isn’t just to keep churning and losing and lining your broker’s pockets. You will hear about the upside and the potential money to be made when you go to a broker website, but rarely will you read about the downside and risks, other than in a very fine printed disclaimer at the very bottom.
Brokers and market makers understand that for a trader, the market is essentially like a casino. The same temptations and emotional responses apply. So, it’s not in their best interest to paint a picture of reality for you, they want to paint a picture of fast, easy money. The news, prices flashing on the screen and charts zig-zagging up and down are like a constant ‘fix’ of dopamine for a trader, in other words, it can easily become a dangerous addiction if you let it deceive you. This is very, very lucrative for the trading industry at large, for you? Not so much.
It’s rare, but some bad brokers (often offshore and unregulated brokers), might be working against you, either with bad pricing and execution or by making withdraws difficult. I don’t mean market makers, (which are not all evil, like people believe) we are talking about simply bad people running bad brokerage outfits, who have zero accountability or ethics. Therefore, choose a decent broker that is well-regulated and who people can vouch for. For those interested, I currently trade with this broker platform here.
- How to avoid the deception
You need to be more of a defensive trader than an offensive trader. Your goal should be to keep your money, not to just trade as much as possible (and lose it). Most traders start out with a very offensive mindset, whether they would admit that or not.
By approaching your trading with the goal of building your account slowly and preserving your trading capital, you have a much greater chance of profiting over the long-run.
Always remember, no one cares more about your money than YOU. Don’t believe the hype, trading is not all “sunshine and rainbows”, and I’m not trying to be negative at all, I am trying to be real so that you understand and know the truth and can learn from it.
Once you do make some money trading, you need to commit to withdrawing some of it each money, say 50% of the profits. There are a number of reasons why you need to do this, including, securing that money so that you don’t lose it to the market, but also when you withdraw it, it becomes more real to you rather than just digits on a screen.
There Are Absolutely No Short-Cuts to Trading Success
Perhaps more than any other issue discussed in this article, the issue of being deceived by the trading industry about “short-cuts” to trading success and “fast money” is probably the most perverse and prevalent.
Without trying to sound like a serial pessimist, the truth about trading is far different from what is portrayed in the popular financial media and most online trading education sources. Hey, don’t shoot the messenger, I am just trying to spread the word so that you don’t end up in the heap of 90% of traders who end up losing over time.
The mental image of the slick Wall Street trader driving around in a Lambo living in a New York penthouse is what floods many beginning traders minds as they first get lured into trading by the ‘powers that be’. It’s good to have goals, even lofty ones, but you have to keep your feet grounded in the reality of what it takes to achieve them. Trading is, at best, a get-rich-slow game, and the more you try to make that “fast money” the more you’re going to struggle and ultimately lose. I won’t get into all of the reasons “why” in this lesson, as I’ve written extensively about this in other lessons. But, just keep in mind that there are no shortcuts to trading success, this is a long-game and you must be in it for the right reasons and committed to proper trading practices if you want to have a chance at consistent success.
- The real ‘short-cut’
Other than my one single biggest piece of advice I always give my students (To keep your charts clean and keep everything simple), the other biggest direction you could take that is as close to a shortcut as possible is that you can accelerate your learning and improve yourself rapidly through education. Whether from this blog and my courses or from another, mentors can help fast-track your progress, however, they won’t ever hand you a franchise to go and print money, and anybody who says they can give you this is lying and only wants your money. Find credible and honest mentors who don’t sugar-coat the reality of trading, use commonsense when doing this.
The deceptions of trading are unfortunately very real and can have a huge negative impact on your trading if you aren’t aware. Whether direct or indirect, the trading industry and even the actual act of trading is very deceiving. What you think is the right thing to do is often the wrong thing and what you think you should focus on is often the least important thing. It’s a combination of the industry setting you up to fail as well as trading simply being a difficult thing to master.
This is why I wrote today’s lesson, to help you understand this deceiving nature of trading and give you some insight into how to overcome it. Aside from the points discussed above, the biggest thing to remember as a retail trader is that slow and steady wins the ‘race’. Trading is not a sprint to the finish line, it’s more like a marathon and you need to be properly prepared for it. You will have to pace yourself, just like a long-distance runner. If you blow through all your money right out of the gate, you will not stick around long enough to make it to the ‘finish line’.
I have spent 18 years trading live financial markets, so I like to think that I’ve learned a few things along the way and I feel it is my duty to share my views and experiences with you, to help you succeed. My trading course is all about preparing you for the ‘battle’ of the markets, so that when you start trading live you are more like a well-armoured soldier with a solid strategy and effective ‘weapons’ instead of heading out into the ‘war’ of trading totally unprepared and unaware of the deceiving nature of it, like most traders.
Please leave a comment… I would love to hear your feedback on things you have learned along the way that could help other less experienced traders! What deceptions or deceiving things have affected you as a trader so far? What did you learn and how did you overcome them?
64 Comments Leave a Comment
Thanks a lot for enlighting on ground truth of trading. This gave numerous thoughts to shape up my trading. Good luck and long life.
Awesome article Nial.
Good lesson for me. Thank you sir.
Nice lesson learned slow and steady win the race,thanks Mr Nial Fuller’s
Absolutely brilliant article
Absolutely brilliant article to always refer to and to be read time and time again to remind oneself of the pitfalls while placing live trades.
Thank you Nial
All i can say is Thank you for this expose. Like you said not many in the industry will be this kind, frank and candid with this truth. No wonder 95% of ignorant traders will continue to donate their monies to the few 5% knowledgeable traders in the market. I have bookmarked this piece in my library. Thank you again Coach.
Awesome article Nial. I am luck to be a member of your community. Always thank you for sharing your experiences.
Very insightful Nail. I’ve lost much in recent trades. But this lesson is going to be a great guide to my trading life.
I have been trading for two years now, lost money and blew accounts. What I know now is that trading requires effort, learning, emotional intelligence and discipline. Currently I have gone back to demo planning on funding my account again, but one thing this article has helped me with is that trading slow and steady wins the ‘race’. Trading is not a sprint to the finish line, it’s more like a marathon and you need to be properly prepared for it. I needed this wake up call. I am trading like I am running towards somewhere placing stress on myself and ultimately feeling defeated and overwhelmed. So thank you for the article.
Always on point Nial. Will buy your course soon. As Im a price action fan. Been trading and reading for a while.
Basically if you don’t want to be deceived in this industry than find a legit mentor, and listen to everything that they teach you. There’s a lot of bullshit in this industry and always some new software that can “increase your wins by 90%” and it’s all bs. I mostly trade price-action and this works for me and my mentor whom taught me price-action properly. Stop chasing shiny objects, and learn how to properly trade the market.
Awesome !! Thanks Nial
Thank you Nial. That’s a powerful article. I had a completely wrong perception about trading and you’ve certainly put things into perspective for me. THERE ARE NO SHORTCUTS !
only the truth produces financial freedom in the financial world. thank sir for this Revelation (truth)
It is absolutely true;i have learnt you should not get into trading with the “get-rich quick” mentality. You will end up losing money rather than making if. Lesson learnt through the hard way…
Amazing article.., read through every line. Truly, I’ve learned alot
Thank you Nial,
This article is quite informative. I learned I need to be more of a defensive trader rather than an offensive trader. My goal SHOULD be to keep my money, not to just trade as much as I can or trying to impress my broker (and lose it). Hmn . . . Defensive or Offensive mindset?. . . DEFENSIVE MINDSET. . . Thank you.
Another pure trading truth from Nial. Thanks a lot, I really never bothered about my exits as much as my entry. Thanks for the heads-up.
Not only the nature of trade is fraudulent. There is illusion in all of nature, so when it comes to someone who is not cheating, it’s like getting to the water in the desert. There is great joy. A great gift. Thanks.
Always ,one more great article ,thanks Nial .
Thanks champ you are indeed an honest man of God.
I am still battling with getting my strategy right (pin bar strategy).
But with your mentorship programme I am confident that soon will go live.
God Bless You with your team and family.
Thank you Nail.If there is one thing I like is the truth of ur article.
God bless you
Another excellent article Nial.
I wish you were the first person I came across when I started trading 2 years ago.
Everything you say is true, been there, scammers and deceivers, made it and blown it
but I can honestly recommend you and your courses- yep, paid thousands for courses that
got me nowhere too!! Keep up the excellent work.
Be great if besides your week ahead article, you had some daily trades we can focus on.
Thanks Nial for the above advise . I can tell little about my trading history . in the beginning, i opened an account for 500 dollar and i blow upp 173dollar , i was shocked . i opened again anew one with another block with an account of 5000dollar and i blow up 1000 because they say if see going up you buy and if its going down you sell but in actuall sense you can say that the story of buy and sell it true but its another way round . i deciced to withdraw the money because i thought some thing was not right on the platform, but apart from that. They started calling me saying that you can deposit 5000dollar so that they give me acontract and i will be able to gain 50000dollar profit. i started asking my self . if it was so, every one would have started forex trade and get rich. i was forced to close it and do research about forex trade, that s when i ended up finding your forex trade course and i was happy and bought it once. i have read almost everything and now have a big improvement.
i can see and thanks for the share . Are you Ugandan?
All facts, thank you! I loved the picture the most, well chosen and well done :)
In the end, the only important thing is that you find a pattern to trade that works for you, and trust your own analysis.
Coming across your blog about seven years ago, has been a game changer for me as far as fx is concerned. Every articles of yours as been a blessing. Non is a right off, all has been on point, whereby if follow accordingly, success in financial market is inevitable. Thank you very much for these eye opener articles.
Thank you sir, you are a real mentor to me, what I like is you do not sugar coat anything about the markets , the thing now is on us to take your advice’s, you do not hide anything when you say trading is a marathon not a sprint.
Thank you so much may God bless you.
Hi, and thanks for the article and the reminder.
I have been trading for a while now and learned the hard way that the most important thing is risk management and preservation of your capital. Better to not trade at all than keep handing over money to the brokers and marketmakers.
Thank you for the reminder
Spot on Nial! Thanks as always for your years of experience and the sound advice that comes with it.
Thanks for the article Nial. I have been reading all of them since march this year, and i can sure say to you that my trading life style changed so hard! Today I only trading daily chart, in deed. I do not even want to see other lower time frames. This improved my results in a magnificant way.
Thank you so much.
God bless you.
Really great, always. love it. no broker will advice your that it is good to make the over a years target like 25% 50% GROWTH a month. everything usually sounds like you can be a billionaire in one good week. smaller values with small stop losses are the leading ways to making money in the Forex market. just be like you don’t want to be rich fast. small values can big profits if you follow the trend well. God bless you Nail. love your efforts.
“slow and steady wins the ‘race’”…Word.
Thank you Nial for the refreshing article to especially me with the truth nothing but the truth about trading.
You’re the sincerest when talking about trading as always.
ATR link , great Nigel I have tried to understand how to use the ATR indicator by using your link the indicator was immediately understood after many attempts to understand its use.
Hi Nial, I’ve been in the Market for 12 months and I confess that I had a fast evolution even, but with an enormous dedication. I always focused on rpiceaction, but I operated the graphic times of little relevance for hours and after I found your blog, it was my paradise. Today I only operate on the daily chart and rarely any entries on the H4 or H8 hour chart. I carry my operations for days or weeks, because daytrade is another path that most get lost and this I do not want for myself. Congratulations, your midsets opened a lot to my mind. I wanted to take your course, but unfortunately I do not speak English, so I’m hoping to one day translate your course into Portuguese. Hugs friend.
Daniel, você é Brasileiro?
Esse ‘hug’ no final te entregou.
I have been studying the whole lessons of Nial, I only trade Daily Charts, and my results getting improve.
If you are brazilian, you are not alone here.
I did the same test – and the result is almost the same. With some observations:
when the market is volatile the closer stops were reached more frequent rather the targets.
Thanks Sir. So educative as usual.
Since I follow your trading articles at least I have overcome greed, staying too long in the position and how to setup stop loss, but m still struggling on the exiting the position. Thank you for your advice.
Thank you so much Sir for writing up this great Article to read and understand about the deception in trading as a beginner of this huge industry. May God bless you and please keep up to deliver your long real journey in this biggest financial industry. Thank you once again.
I’ve had my share of misdirection and false “leaders”. This is a new beginning with clean charts, managed risk/reward and positive instruction.
Thank you Nial.
I have been trading for about 10 years and have experienced everything you have mentioned in the article. Blown out accounts, traded too often, traded with shady brokers, had a ton of indicators on my charts…. I completely agree that focusing on risk/reward and a clean chart is the best way to trade.
I also think that the lure of fast profits is the bane of this profession. A former market maker once said to me if a hedge fund manager averages 20% PER YEAR, they are flooded with money. Yet beginning traders are told they can make 30% PER MONTH if you follow them.
I am now a happy turtle trader, slow and steady…
Thanks sir,you are really on point. One of the deceptive things I learnt about the market ,is that a clear sell signal on daily chart will look to buy on a lower timeframe,so i dont look at lower timeframe but I focus on 50% retrenchment to take my trade
Been reading your articles since I started bumping into it. I prayed to God to lead me in the right path because I just opened an account last month. I don’t have any idea how to do it and upon reading your articles and watching your videos on youtube, I am now profiting little by little. Thank you so much and hopefully I will earn soon enough money so I can purchase your price action course. I only invested 200usd, I believe it will grow. God willing. :)
I m also a new trader… I just startrd couple of weeks ago with a very little amount…. Can you share your experience.. What did u find..
This reminds me to read your lessons on trade exits and other relevant topics Thank you sir
This another eye opener from the Master himself, Nice one Nail
Thanks for the light switch u turned on in my brain
Thank You Sir…
Thanks once again Nial for reminding us of the truth about the markets. I came in with same mindset 2 years ago and have blown several accounts. I’ve devoted to taking you as my mentor and I have really learned a lot from you. Now I have good grasp of risk, my emotions and I can see great improvement gradually. Thanks once again for trumpeting the truth about the markets.
Excellent article again!!
Very good article for traders. Thanks.
Greed and lack of discipline in all kind of trading are good causes of failure.
This is really grate and true. Brokers only tell u sweet and how easy it is to trade and they never tell you how to manage your risk. Thanks for this eye opening article.
Great advice. No doubt patience and Daily charts are key.
Thank you for this article.
For me false breakout has messed me up many times. Entering a trade late that i should have ignores, over trading and greed as well. i am still working on myself to get better at all of it and be a better and profitable trader.
i am just 4 months into trading forex.
Thank you again.
You are, as always , right on the money, (pardon the pun).
I signed up with you four years ago and I am only just beginning to get a reasonable grasp of the market. You’re right , it is quite viscous and relentless ! Only now am I just beginning to see more profits than losses.
The biggest lesson I have learned from you is to trade less , to be patient and wait for the right time to strike. Sometimes you will miss a good trade because you may have waited too long but hey , there will always be more good trades coming along. Sooner or later it will pay !
Thank you for your selfless , ongoing and invaluable guidance.
Regards and good trading,
Thanks for the article.
yes, god bless niall
great message thks!
Thank you Nial for this helpfull articl. may God bless you and your whole family.