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Nial Fuller

NIAL FULLER
Professional Trader, Author & Trading Coach

Stacking the Trading Odds in Your Favor

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By in Forex Trading Articles by Nial Fuller Last updated on | 41 Comments

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.

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. Fanani September 17, 2019 at 12:12 pm

    Thank a lot Nial.

    Reply
  2. Dmitriy September 16, 2019 at 1:57 pm

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

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

    Important lesson. Thanks

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

    Magnificent article

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

    Nial is my preferred Forex mentor anyday

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

    all i can say is thank you so much

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

    Thank Nial

    Reply
  10. 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
  11. 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
  12. rudra February 15, 2018 at 6:24 am

    good one sir

    Reply
  13. 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
  14. 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
  15. farzad February 14, 2018 at 8:50 pm

    Every word in this article is like gold…

    Thanks AGAIN Nial.

    Reply
  16. 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
  17. 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
  18. ampurirag February 13, 2018 at 6:09 pm

    Excellent and timely. Thanks Nial.

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

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

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

    this makes sense!!

    Reply
  22. 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
  23. 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
  24. 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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