How to simplify your trading and stay consistent

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How to simplify your trading and stay consistent

When I first began trading, I had a really lousy trading strategy that I picked up from somewhere on the Internet. It involved using three indicators – MACD, stochastic oscillator, and simple momentum indicator – to make trades. When all three indicators would match up in the downward direction at the top of the chart, I would take a put option. When all three matched up in the upward direction at the bottom of the chart, I would take a call option. I didn’t even pay attention to the actual price chart because I simply didn’t know how to interpret it. Needless to say, this strategy was not only ineffective but also way off base from gaining predictable insight into how the market works.

To learn how to trade well, it’s absolutely necessary to understand how market dynamics work. I covered this in a pretty good degree of detail in my most recent strategy posts – that is, how buyers and sellers interact to create price movement. And my overall strategy is not at all complex at all. It’s based on support and resistance levels in the market, which are a fantastic aid in helping find potential reversal points (short-term or otherwise) in the market. I also consider trend and market patterns as well to help base my market decisions. I’ve had several people tell me that my general strategy has been working for them, or that they’ve at least been able to win over 50% of their trades consistently. Not every trade strategy will work for everyone, as each brain processes information differently from another, but I would encourage everybody to look more toward price action and support and resistance levels (and sticking with the recent trend whenever possible) as the basis of their trading. It’s simple, clean, and effective when traded properly.

As for other things to help simplify your trading:

1. Stick with the same asset(s)

Learning your assets well is a very valuable skill in trading effectively. It’s better to become very well versed in one or just a couple/few assets than skipping around. Also, if at all possible stick to the following “major” currency pairs – EUR/USD, GBP/USD, AUD/USD, USD/JPY, GBP/JPY, EUR/JPY, USD/CHF, USD/CAD, NZD/USD, EUR/GBP, and EUR/CHF. Other pairs – termed “exotic” – consisting of lesser well-known currencies, have less liquid markets because they simply aren’t traded as much. This can lead to some very turbulent price action and are therefore much more difficult to trade successfully.

2. Stick with the same timeframe

For 10-15 minute expiries, this usually means looking at a 5-minute chart. The 1-minute can work, but there is so much noise and a limited viewing window that it can be tough to trade well on this timeframe. I only go down to the 1-minute chart when I want to get a very close-up perspective of how price is acting for purposes of getting into a potential trade. But overall, 5-minute is your best bet for 10-15 minute expiries.

3. Keep your money management constant

Always give yourself an absolute upper ceiling on the amount you’re willing to risk on any individual trade. You can figure this out by taking the amount of money you can safely lose to trading and multiply it by a small percentage, preferably 2% or less.

And that doesn’t necessarily mean 1% or 2% of your account balance. In fact, I only like to deposit as much as the amount of my first trade. When betting smaller amount of money (under $25/£25/€25), then simply making a minimum deposit would be fine. There’s never any need to leave a lot of money in a broker. Always deposit only as much as you need. Believe it or not, you will actually psychologically feel better with a smaller amount of money in your account. I’ve always found it to be an easy way to ease the tension that can often accompany trading real money.

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4. Stay regimented

Trading at roughly the same time of day every day can help you get to learn the market you’re trading. Trading at 2AM EST can and will be very different from trading at 9:30AM EST. The market will look and act very different. Finding your proper dose of trading volume in the market is important. I myself prefer moderate volume, not too low but not too high, which I can get between the hours of 3AM EST and 8AM EST. After 8:30AM EST, the U.S. market opens and crosses over with the European markets, so volume will be quite high. That doesn’t mean you need to have yourself glued to your chair for a certain number of hours every day five days a week. Doing other activities while you trade is fine if setting trade alerts when price approaches a potential trading area can be set-up on your trading software.

And staying consistent in applying your trading strategy over and over again, and only taking the very best set-ups you have in front of you – and have planned out far ahead of time – is very important with regard to consistency, as well. However, never trade if you’re feeling tired, stressed, ill, mentally down, or just not in the proper mindset overall. I have no reservations about skipping a trading day if I’ll be busy, or if any of the aforementioned factors is affecting me. Even when I have time to trade binaries, I almost never trade them more than three times per week.

5. Keeping a clean trading environment

Always keep a clean desk, workspace, and trading room is very important. I find that when I have a ton of junk on my desk or in my room my mind will often get bogged down as a result of all the clutter. I once heard of a trader who did very well over a long period of time trading from his small apartment in familiar surroundings. But once he began trading in other environments after moving, during his travels, and in spots not well known to him, his trading suffered as a result. There is a lot to be said for the fact that your surroundings and environment affect your general mindset and this can bleed into your trading as a result.

Trading doesn’t need to be overly complex. But getting into a trading routine – trading the same asset at the same times on the same timeframe and using the same trade expiry – and executing a simple trading strategy revolving around price action and support and resistance levels is all that’s been required for me to see my trading results get better over time.

Trade Like Nial Fuller: 10 Ways to Simplify Your Trading

Today’s lesson is written in response to some of the emails I get each week that ask me about my own personal trading habits. Whilst all of the strategies and insights on my blog are reflections of the way that I personally trade, I thought it would be nice to give you guys an in-depth run down of how I have simplified all aspects of my trading. It was really not until I simplified my trading that I began to trade successfully, and I firmly believe that if you simplify your trading it will go a long way toward helping you achieve trading success as well.

1) Simplify how you think about trading

Perhaps the most widespread problem that I see amongst beginning traders is that they simply have unrealistic expectations about trading. Most people become attracted to trading because they think it will make them a lot of money really fast or allow them to quit their jobs and work from home. In reality, while these things are certainly possible, they won’t happen as fast you want them to and they are the end result of using an effective trading method and having a lot of patience and discipline to apply that method properly and consistently over a long enough period of time. To be clear, you can achieve the lofty trading goals that you have at the beginning of your trading journey, but in order to achieve them you need to be realistic about how and what you need to do to achieve them.

If you believe you should make money really fast from trading, then you will probably do the things that ‘feel’ like they will make you money really fast, like trading too much and risking too much per trade. In this way, you are making trading much more complicated than it really is, simply because you are denying the reality of your situation. If you accept the reality of your situation, which might be that you only have $2,000 to trade with and you need to risk a more responsible amount per trade, then you will be making progress toward achieving your trading goals. Simplifying how you think about trading really just means being realistic and accepting the reality of your current situation; you aren’t going to be a full-time trader anytime soon with a $5,000 trading account. If you have to start small and slowly but consistently build your account up then that is what you have to do, but trying to cut-corners and skip important aspects of proper trading is not going to get you to your end goal any faster, I can promise you that much.

2) Start focusing on daily and 4 hour chart time frames only

Anyone who follows my blog probably already knows that I am proponent of higher time frame trading. However, one of the biggest benefits of it aside from giving you higher-probability trade signals, is that trading higher time frames helps you simplify your trading by removing the noise and clutter of lower time frames. Simply put, there’s a lot of meaningless price movement on time frames under the 1 hour chart, and the lower you go in time frame the less significance / meaning the price action has. This is why I almost solely focus on the 4 hour and daily charts, and I recommend you do as well. I will occasionally reference the weekly chart for longer-term trend and level analysis, and I might occasionally take a trade on the 1 hour chart time frame. But, about 90% of my time spent analyzing the charts and trading, is spent on the daily or 4 hour chart time frame, and this is a key component to how I keep my trading simple.

3) Stick to major currency pairs

I get a lot of emails from struggling traders asking me questions about exotic currency pairs and other thinly traded markets. The problem with this is that not only are these markets usually more difficult to trade due to erratic price movement, they also have higher spreads, which just means more fees and less money for you. Not to mention, because they are more thinly traded than the major forex currency pairs they are less liquid and this means higher potential for gaps and higher volatility. If you want to simplify your trading, one of the easiest things you can do is to stick to the major currency pairs, major commodities and indices. Many traders try to look at too many different markets, and before they know it they have 40 different markets they are trying to analyze and follow, this is just ridiculous. You cannot effectively trade that many markets, so for the sake of simplicity and profitability, it is best to focus on a handful of your favorite major markets.

4) Focus on QUALITY of trade setups, not quantity

Most traders trade way too much. This is a fact. Over-trading is perhaps the number one reason why most traders fail to make money over the long-run. When you are trading too much, your brain is also doing too much, it is full of too many trade ‘ideas’. This is not how you simplify your trading.

My trading approach is to focus on quality trade setups, and by doing so I also trade a lower-quantity of trades, because there are simply not very many high-quality trades worth risking you money on each week. Taking this approach has an added benefit; it is a lot less stressful and complicated than taking a high-quantity of trades each week or month. Thus, not only are you going to increase your strike right by focusing on higher-quality trade setups, you are also going to significantly simplify your trading because you will naturally be eliminating a lot of low-quality trade setups, losing trades and emotional stress from your trading.

5) Know your max dollar risk per trade, NEVER exceed it on any trade, ever.

Many retail Forex traders are starting out with relatively small accounts of $5,000 or less. If you have a smaller trading account, you have to realize that you can’t be out there trading big position sizes…you have to trade position sizes that make sense given the value of your trading account. If you want to stay in the game long enough to be profitable, you need to manage your risk properly, and taking on too much risk relative to your account size is a fast-track to becoming an emotional / gambling type of trader, which is what you want to avoid at all costs. I cannot tell you how much to risk per trade, nor can anyone else, only YOU know how much of your trading account you are comfortable with potentially losing on a trade. Your first step to simplifying your trading is figuring out how much money you are comfortable with losing on any one trade and then exercising the discipline to NEVER exceed that amount.

6) Have a calm and clean trading environment

If your trading environment is cluttered and messy, your mind is likely to be the same way. There’s a lot to be said about how your surroundings influence your mindset and thinking patterns. If you have a messy computer desk in a messy room, you’re going to have difficulty achieving the type of clarity and calm state of mind that you need to trade properly.

If just have too much happening at your house and you can’t find a quiet and clean place to analyze and trade the markets, then consider going to your local coffee shop and becoming a coffee shop trader. Whatever you do, be aware that your environment can have a significant effect on your mindset, and you need to make an effort to create an environment that is conducive to a clean and simple trading approach.

7) Be organized

This next step to simplifying your trading is similar to the previous one, but it has more to do with your actual trading process than your trading environment. You see, many traders, if not most, have no real underlying structure to their trading, what I mean by that is they have nothing tangible about their trading, it’s all ‘in their head’. Believing that you don’t need a tangible written or typed trading plan nor a trading journal to develop your track record, is simply you being arrogant or lazy. Trading is something that you have to create your own structure around, and most people, when left to their own devices, simply will not do this.

It takes a truly realistic, dedicated and disciplined person to commit to making a real trading plan and keeping a real trading journal. This same type of realistic attitude, dedication and discipline are things that every professional Forex trader possesses, sadly most traders do not possess these things, they do not have a trading plan or trading journal, and as a result they are not successful in the end.

You see, the type of person that makes consistent money in the market is someone who is ‘firing on all cylinders’, so to speak. They are not just performing one aspect of trading properly, they are hitting every nail square on the head, leaving no leaf unturned. They are not the guy sitting on a blank trading journal that he stopped filling out after his second losing trade. A professional trader is the guy who has a tangible track record of his trading success because he has been updating his trading journal after every trade for years. Trading is not a very forgiving profession; you might get lucky a few times, but luck is not a trading strategy, and it certainly will not reward you in the long-run .

8) Be methodic in your trading approach; have a routine

What I mean by “be methodic in your trading approach”, is that you need to keep your trading routine as simple and planned out as possible. Do not be the trader up all night analyzing the charts and reading economic reports while everyone else in your house is sleeping (you know who you are). Instead briefly scan through the charts a couple times a day; once at or shortly after the New York close and again in another 8 to 12 hours, there’s really no need to do anymore. Quickly draw in the key chart levels, note trends and note any signals on the daily charts, of course this is assuming you have first obtained training and mastered an effective trading strategy like price action. If you want to learn more on this style of trading, checkout this article on end-of-day trading for people with jobs.

9) Remain motivated and confident

Once you go through all the work of uncluttering your trading and simplifying it, you don’t want to let all of that progress slip away just because you lose focus or become unmotivated. You are going to be faced with losing trades if you want to be a trader, and that means you’re going to have to ‘man up’ and deal with them by not letting them affect you too much emotionally.

You need to make a conscious effort to remain motivated to stick to your trading plan and remain disciplined. Do whatever it takes, here are some ideas:

Read magazines or books that keep you motivated and pump you up psychologically.

Consider using daily affirmations, these can have a real positive psychological effect on you.

Read quotes by successful traders or other successful people you admire, watch movies that motivate you or listen to music that motivates you.

Meditation is another great tool to help you remain focused and committed to proper trading habits. I want you to do anything that gets your hairs standing up on end and your mind focused on success and greatness.

Do something daily to stay motivated, do it consistently, and do not let outside influences change your mental state of mind…you control your mindset by what you put into it, what you think about and what and who you surround yourself with.

Trading success is not going to just fall into your lap magically from the trading fairy in the sky…you have to MAKE IT HAPPEN, and that means making an effort to do all things you can do to put the trading probabilities in your favor.

10) Use a simple trading strategy

If there was one single moment in my trading career that I can look back on and say with absolutely certainty was a turning point / ‘ah ha’ moment, it would be when I realized that all I needed was a simple price action trading strategy. I was definitely trying too hard early on in my trading career, as most traders do, I was trying all types of different trading approaches, but eventually I realized that all I needed to analyze and trade the market with was right under my nose the whole time; price action.

It was really the combination of realizing that I didn’t need a complicated trading strategy along with realizing that I didn’t need to trade very often that was ‘thee’ turning point in my trading career. Whilst I cannot make any bold promises to you, I can confidently say you that if you truly commit to learning and mastering the price action strategies and general philosophies I teach in my trading courses you will start to make great progress toward simplifying your trading and dramatically improving your trading results.

5 Steps To Consistently Profit in Forex

In today’s lesson, I am going to give you five tips to help you make consistent money in the markets. Whilst I can’t promise you success, if you actually read and implement the five points discussed below, you should see some improvement in your trading results. This lesson was written to draw your attention to some of the more nuanced aspects of successful trading that you may have been ignoring but that can make or break your trading account.

1) Focus on trading, not just on making money

Believe it or not, one of the main reasons you are not making money consistently in the markets is because you are too focused on money.

Most people come into the markets chasing freedom from their job or a quick road to riches. However, what they don’t know is that they are up against a test of mental strength and their ability to manage themselves in an arena of never-ending temptation; the Forex market.

If you want to make consistent money in the markets you will need to let go of all your fantasies of telling your boss to stick his job up his #$! or trading from an exotic beach location. You see, the more focused you are on making money really fast, the more the money will elude you. This is because focusing your mind on the money creates emotional tension, and the more emotional you are the more likely you are to commit the account-destroying mistakes of over-trading and over-leveraging.

So, if you want to increase your odds of consistently profiting in Forex, focus on mastering one Forex trading strategy at a time and forget about making a lot of money. Obviously you are in the markets to make money, but you need to understand that the more you feel a “need” to make money the more you will experience difficulty in actually making it. By effectively managing your risk on every trade you can begin to forget about the money. This means setting your risk tolerance at a dollar amount that you are TRULY OK with losing on any trade. You will not feel any pressure or emotional tension if you truly do not care if you lose the money you have at risk on a trade. If you are thinking about your trades very often or losing sleep over them, you are probably focused too much on the money and not enough on the process of trading, and this means you are probably risking too much money per trade.

2) Learn that NOT trading is part of the game (Being out of a trade is a position)

It may seem counter-intuitive, but not trading is one of the easiest things you can do to help you make money consistently in the markets.

Of course, in order to know when not to trade you have to know exactly WHEN to trade. This involves mastering an effective trading strategy like price action so that you have NO DOUBTS about what your trading edge is and when it is present in the markets.

Always remember that by not trading you are also not losing money. If your goal is to profit consistently, then by not losing money you are obviously closer to your goal than if you had entered a stupid trade and lost. So, just be sure you have absolutely no doubts about entering every trade you take, because if a particular trade setup does not meet your pre-defined trading plan rules, it means that your edge is not present, and trading when your edge is not present is the same thing as gambling.

In my daily members’ commentary we often discuss how not trading is the best thing to do at the moment. Many traders underestimate how important sitting on the sidelines is to their long-term trading success. You really want to trade Forex like a sniper and not a machine gunner, by picking your trades wisely and only trading when your trading edge is present.

3) Become organized and disciplined

Becoming an organized and disciplined trader is something that every trader knows they must do. However, most traders are anything but organized and disciplined, or they make an attempt to become organized and disciplined but they don’t maintain it.

Instead of rambling about why you need to become disciplined and organized I will give you some tips to get you started (I assume you understand the importance of discipline and organization in trading, if not check out some of my other Forex articles):

1) You obviously need to know what you are looking for in the markets if you want to build an organized and disciplined trading approach around it. So, make sure you know what your trading edge is and that you have mastered it.

2) Create a trading plan, you need a forex trading plan, no matter how much you don’t want to make one or think that you don’t need to make one, I am telling you that you absolutely need to make one. You will build this around the trading strategy you have mastered. It should include what your trading edge is, how and when you will trade it, and risk management plans. Basically it needs to cover everything you will do in the markets as concisely as possible, yet still be comprehensive.

3) You need a Forex trading journal. Tracking your trades is a crucial element to developing and maintaining both organization and discipline in your trading. Simply put, if you don’t know where you’ve been you can’t know where you are going, you need to see your trading progress tracked over time in a real and tangible format in order to reflect back to you your discipline and organization or lack thereof.

My trading course and community will give you an organized guide that you can use to create your own trading plan off of. I have a forex trading journal that you can use to get started tracking your trades. You really need to get started on an organized and disciplined track in the market, and my course can give you that extra little “push” you need to get started.

4) Take a longer-term view of what “success” means

You need to stop and ask yourself what success in the markets means to you. Would you rather make 100% in one month in your trading account and then lose it all the next month, or would you be happy with a nice 30-50% gain over the course of one year?

Your chances of Forex trading success will be greatly improved if you just learn to “slow down” and take a part-time view to your trading, rather than wanting to be a full-time trader right of the gate.

By learning to trade on the daily charts first you will better understand why taking a longer-view is important to your overall success. You will get a much clearer and more accurate view of the markets by focusing on the daily charts. Many traders confuse themselves and induce over-trading by constantly obsessing over the lower-time frames. Lower time frames (time frames under the 1hr chart) induce over-analysis and inconsistency. If your goal is long-term consistent profitability, I suggest you focus your analysis on trading the daily charts in forex.

5) Develop a strict daily trading routine to develop positive trading habits

If you want to become a consistently profitable trader you will have to develop a consistent trading routine that is devoid of gambling-like behavior. By becoming organized and disciplined like we discussed above, you can develop a trading routine that will work to reinforce positive trading habits instead of negative ones.

Trading success really is dependent on developing the proper trading habits and continually reinforcing them. However, most traders develop negative trading habits and reinforce those instead. They do this by getting lucky on a few trades they have entered on a gamble by either over-trading or over-leveraging. Once they win on one or more of these gamble-trades, they have reinforced a negative trading habit that is very hard to break.

If you want to obtain the knowledge necessary to develop your own disciplined trading routine that will help you reinforce positive trading habits, check out my Forex trading course. You will find all my insight on price action trading and the other concepts discussed in today’s article.

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