Nial Fuller’s Top 10 Forex Trading Lessons
In this week’s Forex trading lesson, I wanted to give a brief recap of 10 of my recent Forex trading lessons that I feel are among the most important for everyone to read. If you have not already read the following ten articles, you should take the time to do so because there’s a ton of valuable insight and information in them that is the result of my years “in the trenches” of the Forex market. I hope you enjoy today’s lesson and I recommend you take some time to read every article below in its entirety. Good trading and enjoy!
1) Trade Forex Like a Sniper… Not a Machine Gunner
My Forex “sniper” article was one of my personal favorites to write because it really brings together all the different aspects of my trading concepts and theory. The main point of the article is that when you have mastered a truly effective trading strategy like price action, and you combine that mastery with the proper amount of patience and self-discipline, you can learn to trade like a sniper and not a machine gunner by picking and choosing only those trade setups that the meet the criteria in your pre-defined trading plan. Most traders who lose money in the markets are trading like “machine-gunners” because they have not mastered an effective trading strategy and (or) they do not possess the proper mental traits to wait patiently for only the best trade setups.
2) Forex Trading Plan – Why You Need One & How to Make One
Forex trading plans are the foundation of a successful trading career. They are an essential component to not only getting started on the right track in the markets, but to maintaining yourself on that track. Many amateur traders don’t have a trading plan and it really is one of the biggest mistakes they make. Trading is not something you should do “on the seat of your pants”; you need to pre-empt what you will do before you do it if you want to give yourself the best chance at not trading emotionally. A forex trading plan is developed on top of the framework of an effective trading strategy like price action, so, you must first master such a strategy before you embark on designing your trading plan. My article on Forex trading plans discusses why they are so important and gives you some tips on creating one of your own.
3) What are Your Chances of Success as a Forex Trader?
This article discusses the myth that 95% of traders fail to make money in the markets. The truth is that a lot of traders make money on a part-time basis, thus, they should consider themselves to be successful forex traders. You don’t have to make a million dollars a year in the markets to be an effective and successful Forex trader, if you are making consistent money every month, no matter how much, you should consider yourself a successful trader. It takes the proper combination of mastery of strategy and fortitude to make money consistently each month in the markets, so if you are making consistent money in the markets each month you obviously possess this combination and thus you are a successful trader even if you are not trading full-time yet.
4) Trading Price Action in the Recent Forex Market Volatility
The Forex market has been rather volatile recently (as of this writing), and this article from a couple of weeks back discussed how price action traders can benefit from this volatility and need not be afraid of it like other traders and investors might be. Price action trading allows us to see the most accurate and “natural” picture of the market and trade off of it. Thus, when conditions are volatile, price action traders only need to wait for their price action setups to form and then execute their trade. The good part about volatile markets is that they move fast, so you have a great opportunity to make some fast money in trading the recent Forex market volatility. Of course, you must always manage your risk properly by making sure you’re not risking more than you are comfortable with losing on any one trade, this must be done in all market conditions, whether volatile or calm.
5) Don’t Measure Your Profits in Percentages or Pips…
Most traders read at some point that they should measure their risk and reward in percentages and (or) pips. I fundamentally disagree with this status-quo forex money management idea due to the simple fact that I believe trading performance should be tracked in terms of dollars risked vs. dollars earned, otherwise known as “R”. R is just the ratio of your overall winners to overall losers, or winners divided by losers. Pips and percentages are irrelevant because a trader with a small account can trade a relatively large position size due to leverage, and a trader with a large account can trade a small position size if they want, thus, dollars earned vs. dollars lost are the true indicator of trading performance.
6) Set and Forget Forex Trading – Keep Your Day Job
Many traders email me saying they don’t think they have enough time to trade every day or that they don’t want to be in front of their computers for a long time each day looking at the charts. I say great! There is no need to over-analyze and sit in front of your computer burning your eyeballs out like so many amateur traders do. Once you know exactly what you are looking for in the market, you can simply trade off the daily charts (this is what I do) and analyze the markets for 20 or 30 minutes each day, decide if there is a setup that meets your trading plan and then “set and forget” the trade if there is one. If there isn’t one you simply walk away until the next day. Implementing the set and forget forex trading strategy is an excellent way to keep your emotions in-line as you trade because you won’t feel the constant need to “meddle” with your trades or stare at your charts for hours (which usually induces over-trading).
7) A Forex Trading Journal to Track Your Trading Performance
Along with a comprehensive Forex trading plan, all traders should use a forex trading journal to track their trading performance. Having a journal that reflects all your actions in the market will be a permanent record of your ability to trade in a disciplined manner, or lack thereof. Once you begin to see your disciplined actions in the market start to pay off, you will have a record of this if you have tracked everything in your trading journal. A consistently profitable Forex trading track record is a very impressive document to have, even if you’re trading small amounts of money. If you can prove you are consistently profitable over a period of three months or longer, it will not be difficult for you to attract people with money to fund you.
8 ) Over-Trading is a Forex Trader’s Biggest Mistake
In this article I discuss how over-trading is the most prevalent mistake that I see traders making. For whatever reason, it seems to be human nature to see patterns that aren’t really there or to make up reasons to enter the market if you don’t have one that is obvious. Over-trading is a result of not having a trading strategy mastered as well as not accepting the reality of the markets. That reality is that trading less is almost always better in the long-run. You can be a consistently profitable trader and only trade 1 to 10 times a month on average, there’s no reason to enter a hundred trades a week like I’ve seen some traders do, it just doesn’t make sense. To learn more about why over trading is a Forex trader’s biggest mistake, click the preceding link.
9) Risk / Reward: The “Holy-Grail” of Forex Trading
While there is no such thing as a “holy-grail” of Forex trading, thoroughly understanding and implementing risk reward will significantly help your ability to maximize gains and minimize losses. You should view every trade in terms of potential reward based on the risk, thus you should always figure the risk first and the reward second. Many traders seem to focus only on the reward and less on the risk; your first priority should be on controlling risk as effectively as possible and THEN focus on maximizing reward by aiming for a risk reward of 1:2 or better.
10) Master One Forex Trading Strategy at a Time
I believe that most traders get “analysis-paralysis” when starting out in the markets simply because they try to tackle everything all at once. I believe in learning one effective yet simple trading strategy like price action, and learning to master one aspect of it at a time. My price action trading strategies allow traders to focus in on one setup at a time and become a “specialist” in that setup before moving on to the others. I feel that this is the best way to learn because you get to know all the nuances of each setup and how best to trade it, as opposed to trying to learn multiple setups at one time but never really mastering any. If you master one forex trading strategy at a time, you will be in a much more focused and objective state of mind as well, because you won’t be bombarding your brain with a hundred different variables at any one time like so many traders do.
If you want to learn more about the concepts discussed in the ten trading lessons above, check out my Price Action Forex Trading Course and members’ online trading community, you will find a plethora of valuable trading information along with all of my price action Forex trading strategies.
21 Comments Leave a Comment
Nial, this is good and is worth to be called a trading hand book.
I’ve read them all already (more than once). Absolute gold from Nial. Thanks for everything and good luck with you’re trades.
Top 10 articles to help me to refocus, check and correct my trading. As always priceless. Thankyou.
thanks nial really again a nice lession for trader like me,i m very obliged with it.
Thanks this was such great read,I`m loving all your articles
keep feeding me.Ten good reason on helping me stay focus.
This is the “Holy Grail” Article. Great lessons here Nial
Hope you are well. Thank you again for another fantastic and superb lesson.
Thank you for all your help
Thanks and Regards
Thanks for the recap Nial! Every artical written by you is a bonus to my trading arsonal! Much appreciation!!!!!!
Thank You for giving me Your knowledge I wouldn’t mind signing up for further tutering but have to wait till I’m good enough and can afford it.
I’m a complete newbie but doing better especially learning about price action.
Cheers Mate. What a collection of artical’s and insights. You should be proud!
Great one mate,good advice am improving thanks a lot Nial.
For the all great stuff.
thank Nial, as always appreciate your efforts.
Great points. I will put them to work in my trading.
great advice as usual. Thank u.
Thank you very much Nial for your summary of top 10 articles. I learn a lot from your great articles. Keep it up. May God bless you!
Reading this stuff, it’s so easy to see where I come unstuck. Each of those articles contains plenty for me to work on.
For me, daily charts have definately loosened the screws. They’re a lifeline in a sea of semi-fictional news events built on BS.
From myself, and my children, thank you.
Hi Nial! many thanks for such wonderful summary once again. i take an average of not more than 2 trades per day on the 4hr time frame; hp i’m not over-trading? i just go for trades worth 1:3 risk reward and above….
I love a bit of bedtime reading.
I need lots of revision. It only sinks in after 5+ times of reading . Thanks for your top 10 Nial.
Thanks Nial,i have been following all the lessons and they have helped me to improve my trading style especially using “higher timeframe” and adopting a “set and forget strategy”
THANKS FOR PRECIOUS OFFERINGS