The Simple Trick I Use Daily to Trade like Professional Forex Traders without Getting a Finance Degree

The Simple Trick I Use Daily to Trade like Professional Forex Traders without Getting a Finance Degree

The Problem: The Fear of Losing and Stress of Trading

What happens in your brain the moment you enter a trade? What is it that changes how you thought about that trade? 

And how do you feel when the trade loses you money? What are the thoughts that keep you up at night? Do you wonder whether you should have taken that trade or not? Was there a better way to manage risk? 

Traders hate losing money and often give up on their dreams of forex trading profits and success because they are too scared of losing. Well if you’re one of those people like me and 99% of other forex traders then this Cool Trick might CHANGE the way you trade forever. 

Understand The Problem

Whenever we trade we assign a certain percentage of our total account as the risk for that trade. I understand that you apply this core concept to your trade, and if you don’t you definitely need to read about it. Assuming you understanding the basics of Risk Management and How to Take a trade in the Forex market, 

Let's Now Consider 1% Risk as the COST of buying an Item. 

Suppose you have a business of selling  perishable item. Perishable items have a shorter limited life span. Say you’re in the Fish business, without access to modern fridges and freezers. (Just an example off the top of my head, let's not argue about technology ok haha)  Suppose you hire a stall in the fish market for a day. So your fish can only last the Day in the Market. IF you don't sell it today, and since you don’t own storage facilities, the fish will have to be disposed off. They value of the rotten fish, as we all know is $0. 

So lets count Inventory Costs: Suppose It costs you say, $100 to buy 10KG of Fish. 

You want to sell it for $200 so that you can make a profit at the end of the day. 

Now, in this example, you might have to pay the costs of getting the stock, the market stall might have a charge or commission. 

This is not so different from the forex market. Just like the fish business you would end up paying spread or commission in the Forex Trading "business" which is really a smaller proportional cost. In this case you hire the trading platform (which the brokers give you for free) this is your Market Stall, and most importantly they LEND you the FISH, that is THE MONEY. 

Point to Note here, I know a lot of beginners don’t even know they take a loan sometimes even 100 times bigger than their initial investment when they trade the forex market with 1:100 leverage. 

So the next time you take a trade think about something like that. Create this visual anchor in your mind and use it over and over again. It does not have to be a fish it could be a cake, a curry, a fruit juice or even a time slot in a market place. 

Suppose you are selling a service and you hired a spot in the busiest shopping centre. Every minute you spend their is your cost and it is NOT coming  back. Suppose you paid $100 for that time slot of say 4 hrs. Every hr is costing you $25 dollars. You need to sell your service worth $100 to cover your costs. 

Anything above that $100 is your profit. 

Now think about your trading account. Suppose you have $10,000 in your account. You receive a good valid trading signal. You calculate 1% Risk for this trade which would be $100. Suppose you’re trading the 5 Min chart and your strategy suggests a 10 pips Stop Loss. That would equate to risking $10 per pip. In this case you need to make 20 pips to create that 100% profit margin. 

Think of that SPACE between your Entry Price Level and the Exit Price Level ,i.e your Stop Loss level, as THE SPACE YOU OWN in the FOREX market. The 10 Pips is your STALL, The Rented Space. Yes, Think about Hiring those 10 pips for $10 a pip. Imagine that you’ve actually paid or agreed to pay the rent amount for those pips. And you always pay the Rent. 

Cool Trick Visualisation of Renting 10 Pips Space in the Forex Market

Now imagine price hit your take profit level of 20 pips. You made 20 pips at the price of $10 per pip that equates to $200. You made back your $100 Rent cost and a nice juicy $100 profit on top. 

The biggest mistake forex traders make is that they call it a $200 profit. When in fact it is a $100 profit on a $100 Cost. 

When you start to think about your Forex trading Business in this manner you will have a better trading mindset that will lead to more forex trading profits and remain consistently successful. You will think of Forex Trading as your Serious Forex Business. 

Perfect Entries for Maximum Profit? How to

When it comes to trading profitability and success the one question that I get asked frequently is about timing entries. Logically when people think about trading or investing their first question is "How do you know which stock or forex pair to chose?" and if you chose it "When do you know its the right time to enter the market or take a position?"

Entries vs Exits

In trading terms its a question about Entries but not the Exits. A Novice trader often ignores planning their EXITS ahead of their entries. I've learned to understand that it has something to do with their perception of "A perfect entry". They believe that a perfect entry method automatically means a 100% profitable trade. Its to do with their definition of a "Perfect Entry". They define an entry as Perfect ONLY when it is Profitable. And that is where the problem exists.

Hence they give the accuracy of entries a huge priority. They just focus on Timing their entries. Because under their belief system, as long as the entry is "perfect" you'll be getting richer and richer trade after trade. hey think that in order to extract substantial profits out of the market, they need to time their entries "perfectly".

Lack of Probabilistic Mindset 

The next logical step would be to identify a "complex" mechanism to ensure this goal is achieved. Surely, the professionals know techniques that are alien to most of us. Surely, they are people with exceptional brain power and wisdom. But this can not be further from the truth.

The fact remains that

Professional Traders i.e consistently successful traders, have perfect developed perfect ability to remain "disciplined", well, may be not "perfect" but lets say "highly discipline" approach to follow a "simple" trading plan that gives them an edge. 

Random Entries vs Methodical Entries:

Entries are not that important. I'd say they take up 5% of the equation of Successful ie. Consistently profitable trading. Entries can be taken randomly, (just to make a point) of course with better timing we can improve our over all profitability but entries really isn't important.

So what is it that we should focus on? We should focus on Managing trades correctly once we have entered.  And the only way to manage your trades correctly is to have your exits planned ahead of entries. You should know exactly WHY you're taking this trade before you make your entry into the market.

You should have an aim, a profit objective, a method that is in line with the rules of the method taht provides that statistical edge. e.g. the method I use for breakout trades requires that I take "low risk" entries and look for at least 5X (five multiples) of profit based on the initial risk taken.

So, if I take a trade, I have a fair idea what are the price levels that market must achieve to hit that target. If the market structure, (via technical/visual analysis) suggests that the "probability" of that happening is low, then no matter how good the "entry Signal" is, I will "filter" that "trade signal" and look for something that has a higher probability of achieving at least 5R  profits. A Great rule we learned from Paul Tudor Jones via Tony Robbins new Book. Thank you TR.

Asymmetric Risk Rewards

[Note: 1R is one unit of Risk, e.g. if the initial stop loss requirement of a signal was 10 pips then 10pips = 1R, in this situation I'd be looking for 5 times of the initial risk in pips i.e. price should have the probability of moving at least 50 pips in my favour. Thank you to Van Tharp for teaching me this]

AIMS strategies focuses primarily on a traders ability to learn to trade with discipline. For it is a traders ability to follow a trading plan, her ability to create a trading plan, incorporate a trading strategy with an edge into the trading plan and then be able to follow it at least 80% of the time. When a new member joins AIMS we help them to work on their trading plan and incorporate a T20 Principle. Something we learned from the late Mark Douglas who wrote this amazing book Trading in The Zone. {RIP Mr. Douglas}

The Perfect Trading System

Is there a strategy that gives that edge everyone is after? Where is the Holy Grail System?
There are many strategies out there that can give you an edge. Simple trade-able strategies but the problem isn't that you cannot find one. The fact that you're reading this you've already found a place where you can get a proven strategy that gives you a 66% edge. But how can you use this strategy to your advantage? The only logical way would be to follow it 100% of the time. The surprising fact, to some, is that 95% of people cannot follow a strategy because they are NOT disciplined.

How Important is it to be Disciplined?

So, we highly stress on discipline. We have it divided into three stages. In the first stage, in the beginning, a trader needs to to work on only one thing, and that is discipline. Traders often focus on "making money" and "making pips". Nothing wrong with that except the fact that trading profits are made by traders who can trade correctly.

Successful trading requires that a trader be able to maintain at least 80% discipline. That can be achieved by following our T20 Principle (Available inside AIMS Forum). T20 means you don't focus on the outcome on a single trader rather you take a batch of 20 trades and you mark each trade with a score of 1 or 0. If you've followed your rules you mark it as 1 if you break any one rule its a 0. Simple.

The Biggest factor that would violate a DS [Discipline Score] is not the fact that you missed a rule while  "creating" an entry setup, but rather our ability to follow the Trade Management and Risk Management Rules. It is our highest priority to NEVER violate our Risk Management Rules.

A trader must not have much discretion when it comes to entries but there can be discretion in terms of exiting however our only discretion at the beginning is to "allow" ourselves to Allow the trade to progress and exit according to a Set Trade Management plan.

Profitable trading then becomes a "byproduct" of trading "correctly". This process then eliminates the need and struggle of trying to be make money. It becomes a Stress Free Activity of simply looking for your edge and trading correctly.

Join The Quest of Perfection TODAY.... 

25 Percent Account Growth this Morning

Hi

I just wanted to share that we have further our already successful and powerful trading strategy.

A huge thanks goes to Steve of www.for-exe.com and Grant (The Awesome Gman) for working on this strategy.

I can confirm that we traded one signal this morning that brought 10% growth on risking only 1%.  The London Open Trade. 

Later in the morning session we traded again using Adam's Apple Signal and Seeds and some Cherries (Cherries are our brand new entry technique available to Skype members only).

This ended up with a gain of another 15%. This time it was a few trades all based on just 1% risk per trade.

So basically, a 25% growth achieved as a result of 6 trades. That's just above 4% growth  per trade with a risk of only 1%.