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Nial Fuller

NIAL FULLER
Professional Trader, Author & Trading Coach

A Cure For A Trader’s Analysis-Paralysis – Stop Thinking and Start Trading

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By in Forex Trading Articles by Nial Fuller Last updated on | 15 Comments

stop-thinkingDoes this sound familiar: You see what you believe at first is a perfectly good trade setup, however, as you continue to analyse and study it you begin to feel less and less sure about the trade, yet you aren’t totally sure why?

This is a common problem for traders; the ‘deer in the headlights’ scenario that occurs when you have too much ‘congestion’ in your thinking. Traders often over-analyse themselves right out of a good trade setup, and it can be a very big problem that can have severe negative consequences on your trading performance. Over-thinking can also cause traders to screw up perfectly good trades that they’ve already entered, this is another big problem you need to deal with.

The goal of this article is to identify the main reasons that over-thinking negatively impacts your trading and how to solve them…

Problem – Too many external influences causing confusion and over-analysis

News, trading websites, CNBC, other people, etc.; all of these things have one thing in common, which is that they cause you to over-analyse the market and become confused. External influences are probably the biggest reason traders think themselves right out of good trades, mess around with their trades when they’re live and over-trade. When you have too many external influences, it clouds your mind and thought process and causes you to second-guess your trading strategy.

Cure – Make a decision to ignore external influences

The key to ignoring external influences such as the ones discussed above, is to simply gain understanding and knowledge that these influences are actually HURTING you. Once you fully believe and accept that, you will no longer care about them and the result should be that you will focus more on your trading strategy and on mastering it, and less and less on external influences.

Trading success is the result of being a master of your trading strategy and having extreme clarity on what you are looking for in the market and sticking to that without any outside influences screwing that up.

Problem – Psyching yourself out of a good trade

There is nothing worse than seeing a perfectly good trade setup that meets your trading plan criteria but you don’t enter it, then it takes off in your favour. A big cause of this is over-analysing your trading strategy and thinking too deeply about it.

I’m sure you’ve fallen victim to over-thinking your trading strategy. You see a good price action signal for example, but then you begin looking at the surrounding price bars and start finding reasons why it ‘might not work’. Or, you start reading economic news and opinion pieces about the market you’re trading and you end up getting turned off to the trade because of someone’s opposing opinion or view.

Cure – Don’t think so hard about it

This a bit more of a complex aspect of over-thinking, because there are a number of reasons that traders think themselves out of perfectly good trade setups. But, the main two are fear and ignorance.

You have to stop being afraid of losing money, and the best way to eliminate that fear is to accept it. Trading involves having losing and winning trades, not just winning trades. The sooner you accept that, the sooner you will understand the need to manage your risk properly on every trade. Also, accepting that you will have losing trades will help you eliminate the fear of a loser, which can be a big reason traders find reasons not to trade.

Remember, each trade is just another execution of your trading edge…don’t think too hard, if you see the signal and it meets your criteria, take the trade and walk away. Sure, you can always find reasons to not take a trade, but if you always do that you will not be following your trading strategy and you’ll be giving into fear. You have to take every obvious / clear instance of your trading edge in order for it to work in your favour and make you money over a series of trades. Trading involves risk, accept the risk early on and manage it, or don’t be a trader or else you will be stuck in a cycle of fear and over-analysis of the market.

Problem – Over-thinking / over-analysis causing thought ‘congestion’

Having ‘congested’ thoughts about trading means you are confused and that comes from analysing the charts too much and taking in too many external variables as discussed previously. It can also come from not knowing what you’re looking for in the market (not having a strategy) or not having your trading strategy mastered yet.

Cure – Stop being so involved and ‘clean up’ your trading process and mindset

The first thing you can do if you haven’t already, is de-clutter your charts. If you are trading with tons of indicators and messy charts, you are going to be confused and have a congested trading mindset. To be a successful trader, you need clear and simple thoughts: Here is what my trading strategy is….Is it present now on the charts? If not, do nothing, go away for a while (a day maybe), if it is present then set up the trade parameters and do nothing again. I discussed why ‘nothing’ is the key to trading success in a recent article, check that out to learn more.

Another thing you can do to ease thought congestion, is to simply stop looking at the charts so much. This can be hard if you have a job where you’re on the computer most of the day, but it’s important. I recommend deleting your trading app on your smart phone if you have one; you don’t need that, and the charts look distorted on cell phones anyways, I don’t recommend mobile trading as a general rule. Only look at them on your computer and schedule regular times each day to it; maybe twice a day (morning and evening). But, if you are looking at the charts all day every 10 to 20 minutes (because you’re addicted to trading) you are going to over-trade due to over-analysis, I guarantee you that.

Looking at the charts too much is also a big reason why traders over-analyse and subsequently mess up their trades after they’re live. Leaving your trades alone while they’re live is about the best way to get the most out of your trading strategy.

Problem – Too little confidence in your ability causing you to second-guess yourself

Obviously, if you aren’t confident in your ability to trade, you aren’t going to make money. You need to be decisive to make money as a trader, not confused and inconsistent.

Cure – Get training and screen time

The two biggest cures to low self-confidence in your trading ability are education / training and screen time. You need to learn how to trade from a qualified trading course / mentor. Trading seems like something you can ‘learn on your own’, but take it from some of my students; you are much better off obtaining training from someone who can help you avoid many of the common pitfalls that cause traders to lose money early-on. Your hard-earned money is going to be on the line and you want to take as few risks with that as possible, and losing money simply because you didn’t get education is just foolish.

After obtaining education and mastering your trading strategy, simply getting in screen-time with your trading strategy is a great way to build your confidence up. Demo trade for a while but don’t do it too long, start live trading with small amounts of money at first to gradually build your confidence with real-money trading.

Conclusion

I walked the same journey as you, and I went through the same psychologies issues discussed in this article, and it’s my goal to help my students recognise these issues and then help them solve them and avoid the years of mental and financial heartache that are often the result of these issues.

You can break free of this cycle of over-thinking, over analysis and traders’ ‘insanity’. As your coach, I am not only here to make you aware of these mental traps, but to help you identify them, solve them and create a routine that will help you avoid them into the future.

I’m always there on the email line and providing coaching via my price action trading course and trader’s discussion forum to provide guidance if you identify with any of the issue / symptoms discussed in this article. Contact me here.

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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 20,000+ students since 2008. In 2016, Nial won the Million Dollar Trader Competition. Checkout Nial's Professional Trading Course here.
  1. Dmitriy September 16, 2019 at 1:57 pm

    Thanks a lot, Nial!
    That was a truly beautiful lesson!

    Reply
  2. Sunday September 14, 2019 at 9:53 pm

    what to know more about risk management
    if I want to risk 1$ on a pair what will be my lot size and pip value to set as a Stop loss

    Reply
  3. Zinnur June 2, 2019 at 4:34 am

    Important lesson. Thanks

    Reply
  4. Благодарность October 30, 2018 at 3:47 am

    Magnificent article

    Reply
  5. Rahmat February 26, 2018 at 7:36 pm

    Almost every articles content and language from Nial are really giving positive effects including this one.
    So thank you Nial.

    Reply
  6. Olawa February 18, 2018 at 1:01 am

    Nial is my preferred Forex mentor anyday

    Reply
  7. DERRICK February 16, 2018 at 12:54 am

    all i can say is thank you so much

    Reply
  8. Tha Mathabzo Zulu February 15, 2018 at 8:15 pm

    Thank Nial

    Reply
  9. Duncan February 15, 2018 at 6:29 pm

    Thanks Nial;

    This was a great post which actually helped me rephrase my thoughts after my losses.

    I am still not very profitable at this stage but every time I lose, I look back to see what I could have done better and learn to minimize my losses maybe exit at a small profit rather than a loss!!

    However; after having read this, I also now appreciate the fact that losses are a part of it as well and I feel less discouraged before taking the next trade than before. Things sometimes are easier said than done – true – but after reading these guidelines, I learn a lot and appreciate it heaps. I am learning a lot and the best part of it is that I am enjoying it.

    Thanks for spending the time to post such valuable guidance!

    Duncan

    Reply
  10. Peter Miller February 15, 2018 at 2:46 pm

    Another good lesson. As they say ” life is what you make it “and that goes for trading also, think before you act and know that never one day (or life is ) is the same as the last one, so treat as Nial says each trade as a new beginning. Thanks .

    Reply
  11. rudra February 15, 2018 at 6:24 am

    good one sir

    Reply
  12. Khesiwe February 15, 2018 at 2:14 am

    Excellent article pactice makes perfect I’m going to practice every advice in this article thanks Nial

    Reply
  13. Winston Roy Longbottom February 15, 2018 at 12:01 am

    Thanks Nial, I for one admit that I was influenced by previous success and could not see the next trade through that; I was brought back to reality with some quick losses, however I puuled my thoughts together and looked at my next trade with confidence and considered every possible angle before taking it and I am now back on track. This article has since reassured me of that fact and I must disregard any previous trade before attempting the next. Your articles help keep sanity in the trading game and also leads to further success. Many Thanks. Winston

    Reply
  14. farzad February 14, 2018 at 8:50 pm

    Every word in this article is like gold…

    Thanks AGAIN Nial.

    Reply
  15. Olamide February 14, 2018 at 2:03 am

    Thanks Nial. That’s reminds me of a trade some years ago before I quit trading. I bought EUR/USD on $0.05 lots with $20 risk and i made a profit of $183 on that trade so that winning recency bias got into my head and I felt overconfident, then i went ahead to trade $0.10 lots on my next two trades and I lost both. That’s how I gave back the profit I made from that EUR/USD to the market. Fear start to catch me then I reduce my lots to $0.01 which definitely reduced my profit that I would have make on some trade. Though I just came back to the market since two or three years ago that I quit but am still using demo account to test my trading strategies before trying to come back live. Thanks once more.

    Reply
  16. Wandera Moses February 13, 2018 at 8:50 pm

    Nial thx for this one also. i have improved alot in trading just by reading your articles. thx alot

    Reply
  17. ampurirag February 13, 2018 at 6:09 pm

    Excellent and timely. Thanks Nial.

    Reply
  18. Seiso February 13, 2018 at 1:44 pm

    Typical of Nial’s mail’s. I am not in anyway surprised to find this post hitting the nail on the head as it does and so timely as well. I always find Nial’s post as informing, factual and educating like this one. Thanks to Nial, from now I am no longer going to be enslaved to my last trade’s results.

    Reply
  19. Colin February 13, 2018 at 10:31 am

    Thanks for the trading insight. Particularly about training our brains to behave properly.

    Reply
  20. Hettie van der Vyver February 13, 2018 at 5:12 am

    this makes sense!!

    Reply
  21. Thoko February 13, 2018 at 5:09 am

    Well I am a true novice,I have not started trading yet. If I understand well briefly you say if one is a trader one must bury the past.That is my motto
    So I feel l Iam going to do well.

    Reply
  22. Wasantha February 13, 2018 at 4:45 am

    This article explains what happened when I first started trading forex. After reading many of Nial,s writings on the subject of trading I feel that I am expanded in my knowledge and confident about my trading decisions.I really appreciate Nial,s works,

    Reply
  23. kris February 13, 2018 at 2:59 am

    i noticed today after one loosing trade that it can’t reflect, the other running trades .
    After that i checked my emails and i saw your email as first .I have read it and then it was like you would heard what i sayd before It was simmilar to :

    If you just lost, it has no bearing on the fact that your next trade might be a winner.
    If you just won, it has no bearing on the fact that your next trade might be a loser.

    thank you for your work .
    traders mindset ..

    have a nice day.

    Reply

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