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Secrets of Successful Forex Traders - by Nial Fuller Below Expert Forex Trader Nial Fuller Talks About Secrets Of Successful Forex Traders. The “secrets” of most successful Forex traders are perhaps not so secret. What I mean is that you probably already know most of the things you need to do to be a profitable trader, but you don’t do them because you think you will find a “short-cut” or you think you just “feel” the market better than most people so you will be able to cut the corners you know you should probably be taking. Most struggling traders think in a similar manner to what I just discussed above; they think they are always just one trade away from hitting a big winner and then they will start to be disciplined and create a trading plan and trading journal. Unfortunately, it’s usually too late for traders who think like this, meaning because they think like this they are reinforcing trading habits that are inhibiting them from making money in the markets. Don’t be like the masses of losing traders, be different, be realistic, do what you know you should do to excel in the markets, stop cutting corners and start trading in an organized and responsible manner. Here are a few things that ALL consistently profitable Forex traders do, and that you probably are not doing: Trading frequency Most traders seem to have a natural tendency to want to trade a lot. Rather, traders who are undisciplined, have no trading plan and who don’t view their success as being defined over a long series of trades want to trade a lot. Most very successful traders do not trade as much as you probably are. In fact, there are studies that PROVE that investors and traders that trade less frequently than day-traders or scalpers make more money over the long-run. If you think about it, isn’t the “long-run” really what matters anyways? Why does it matter if you make 50% one month only to give it back the next month? Isn’t it better to just make 50% a year and keep that 50%? Of course, everyone would answer yes, but most traders’ actions do not reflect this. If you boiled down the reasons behind most traders’ actions, you would see that they are primarily concerned with the ‘here and now’ and not so much on their end-of-year trading results. Of course, when the end of the year comes and they look back over their trading performance, they realize that they traded way too much and that had they just traded less frequently, they probably would have made a lot more money…or in most cases made some money. What is the point? Well, the point is that one of the biggest ‘secrets’ of successful traders is that they don’t trade very much. If you take a look at your own trading performance you’ve probably entered 5 or more trades in the past week, in my opinion, that’s too many. I focus on the daily chart time frame, and I only enter very obvious price action setups that I consider the ‘low-hanging fruit’; I don’t like to put my hard-earned money at risk in the markets unless my trading edge is present. This is how a professional trader thinks, whereas an amateur / losing trader just manifests trading signal after trading signal, mutating their trading edge to meet their desire to trade, or altogether ignoring the fact that their trading edge is not present. Discipline Another ‘secret’ of successful Forex traders is that they are disciplined. If you are not consistently successful in the markets yet, it’s a fair bet that it’s because you are not disciplined enough to consistently manage your risk or to consistently stick to your trading plan, i.e. not over-trading. Almost every trader who struggles to make money in the markets does so because they risk more than they should per trade…rather more than they know they should, and also because they trade too often. Both of these problems are a result of not being disciplined enough to stick to what you know you should do and what you need to do. Successful traders are successful because they are disciplined enough to wait for the most obvious trade setups and also because they are disciplined enough to never risk more than they are totally comfortable with losing per trade. Simplicity Finally, perhaps one of the biggest ‘secrets’ of successful Forex traders is that they do not use complicated trading methods. Whilst every trader is different and trades in a slightly different way, by and large, pro traders are using simple price action-derived methods. You are going to be hard-pressed to find a pro trader with 10 different indicators on their charts. Most successful traders have long since realized that the only thing overly-complicated indicator and software-based methods do, is cover-up the high-probability price action setups that occur on the price chart beneath them. Most beginning and struggling traders seem to have the idea that they by putting more ‘crap’ on their charts they are somehow going to gain some inside information or understanding of price movement. All they’re really doing is masking the price action of the chart and making it more difficult and complicated to interpret and trade from. Most traders who make it out of the woods of beginning trading and searching for the “Holy-Grail” trading system, eventually end up gravitating towards natural and raw price action trading because they ultimately realize that a market’s raw price movement is the best and most accurate tool for analyzing it and making trading decisions. Unfortunately, Forex trading is a very easy industry for people to develop trading systems and ‘magic-bullet’ indicators that sound and look great, and are very easy to market and sell. As a struggling or beginning trader, the best thing you can do is to be skeptical; if something sounds too good to be true…it probably is. There are no short-cuts to success in Forex, and the ‘secrets’ that I’ve discussed in this article really are just common sense things that you probably already know you should be doing but most likely aren’t. So, make the change today and start doing what you know needs to be done to succeed as a currency trader. You Can Visit Nial Fuller's Price Action Trading Community Here - Forex Trading
If you find that more often than not you are either in a trade, thinking about being a trade, or even “itching” to be in a trade, you are probably addicted to trading the markets. If you find it difficult to remove yourself from your computer after placing a trade or you are staying up until 3 in the morning watching every tick for or against your trade with frazzled nerves, you are probably addicted to trading. How do you stop your addiction to trading? If you are man enough to admit that you are addicted to trading then read on for some tips on how to break free from this addiction, if you want to continue on in denial of your addiction, then it’s better to click off this page now. Stop trading small time frames When I say “small time frames”, I am talking about any chart time frame below the 1 hour time frame. I personally believe these time frames are too full of random price movement that carries with it very little significance. As a result, I feel that traders who focus primarily on these small time frames end up getting “seduced” into over-trading because they naturally spend more time analyzing and watching the markets as a result of having more (mostly meaningless) price movement to analyze. We humans tend to be good at finding “patterns” in things, or meaning in things that perhaps don’t carry any inherent meaning. Traders are really good at doing this when trading the lower time frames. Also, any trading signal on a 5 minute chart is going to inherently carry with it a lot less weight than that same signal on the 4hr or daily time frame. So, if you want to break your addiction to the charts…stop watching the small time frames all the time, the reality is that it’s only causing you to over-analyze, over-think, and over-trade. Be accountable People who are addicted to drugs or alcohol lack accountability to themselves, they don’t care about their bodies enough to stay disciplined enough to stay away from substances that harm them. Similarly, traders who gamble their money away and who are addicted to the markets, lack accountability; they are unorganized and undisciplined and so they need something to be accountable to. The best way to inject some accountability into your trading is to develop a Forex trading plan based around an effective trading strategy, as well as a Forex trading journal. Then, you have to force yourself to actually use them; if you can manage to do this you will then have something to be accountable to. When you self-manufacture these tools of accountability in your trading, it helps you stay disciplined and helps to forge positive trading habits in your trading. Traders who gamble and who are addicted to the markets actually reinforce negative trading habits and thus it can be nearly impossible for them to turn their trading around. Understand that NOT trading IS a valuable position Another very important thing to understand that will help you break your addiction to trading is that NOT trading is often the best position to take. Think of it like this, if you are addicted to the markets and are over-trading, you are going to have many more losing trades than you would have if you were disciplined enough to simply not trade when you knew you shouldn’t have. Just to get back to breakeven you have to then hit enough winning trades to make up for all your losers. Whereas, if you simply had traded like a sniper and not a machine gunner, you could have avoided many losing trades and thus had a much more consistent and profitable equity curve. Don’t put pressure on yourself to make money The reason why many traders get addicted to the market is because they put too much pressure on themselves to make money from their trading. This is a very dangerous thing to do. Traders who find success in the markets feel little to no pressure, they don’t put too much significance on any one trade. If you see trading as your “only option” at having a happy life, you are obviously going to become emotional the first time you lose a trade, then that’s going to kick off an avalanche of emotional trading mistakes and trading addiction that will only result in you losing increasing amounts of money. In short, remover your “need” to make money in the markets, and the money you so badly desire will actually come faster. Making sure you don’t “relapse” As any addict knows, relapse is always lurking around the corner, waiting for you like an unavoidable temptation in the night. When you’re a trading addict, the situation is exactly same, and perhaps even more difficult than being addicted to drugs or alcohol, since you are still going to see your temptation (the markets) everyday. You have to consciously be on-guard against falling back into your old ways of being a trading addict. The easiest way to do this is to stay disciplined and organized by thinking about your trading like a business and making a trading plan and trading journal and using them with passion. You also need to keep in mind that you COULD lose money on ANY one trade, so keep that fact in your mind at all times while trading, and ask yourself before every trade if THIS is a trade that a I REALLY want to risk money on, and is THIS amount of money an amount I am TRULY OK with losing? In short, there is no concrete way to avoid slipping back into your old bad habit of trading addiction. But, you can pre-empt all your actions in the market by doing the things I just described, this will greatly increase your chances of avoiding a relapse. Also, you should realize that trading is a life-long event, so don’t get too hung up on any one trade; your trading success is measured over months and years, not over days or weeks. Find other hobbies, don’t get obsessed with the markets, and realize the markets will always be there, so missing out on a good trade setup is not a big thing. By and large, traders who take a slow and controlled approach to trading the markets make a lot more money over their lifetimes than traders who take a fast and emotional approach. Nial Fuller is a respected Forex trader and trading coach. He teaches forex traders to simplify their trading by learning to read the “raw” price action of the market and by trading with simple yet highly logical and effective strategies. If you want to find out more about him and his price action trading methods, check out his Forex Trading website here:
How to Reach Your Full Potential as a Forex Trader To begin today’s article, I want you to yourself a question: “Am I currently doing everything possible to be the best Forex trader I can be?” I’m willing to bet that you are one of many traders who know what they need to do to trade successfully, but simply aren’t doing it. So, why is it that so many struggling Forex traders have the knowledge to trade successfully but they still do not make money consistently? How can you take your knowledge and put it into action in the markets and finally overcome your inability to remain disciplined? I will give you some insight into these questions in today’s article and hopefully you will then have an easier time reaching your full potential in the markets. Anyone can learn to trade successfully if they really want it bad enough The 1983 trading experiment by Richard Dennis and David Eckhart, known as ‘The Turtle Traders’, famously proved that trading could indeed be taught successfully to people with little or no trading experience. Thus, you have the potential inside of you to trade successfully; it doesn’t take some special genetic gift of birth to trade the markets profitably. However, it is true that some people have an easier time with discipline and self-control than others, and these are two of the most important traits of consistently successful traders. But, that doesn’t mean you can’t develop these traits in yourself, it will just take you a little more work if you aren’t naturally inclined to be disciplined. Successful Forex trading is all about developing and maintaining the correct trading habits. The potential for you to make money consistently is inside of you, but you need to “unlock” it by staying consciously aware of your emotions as you trade. Turning your trading knowledge into action We’ve already discussed the problem that many traders face of not being able to act on their knowledge of what they need to do to trade correctly. Trading seems to be a lot like staying in shape; most people know what they need to do to stay in good physical shape, but they lack the motivation to become and remain disciplined enough to develop the proper habits that make them consistently healthy. Similarly, most struggling traders know what they need to do to start making consistently money in the markets, but they simply lack the necessary discipline to make it happen. So, what are some things that you can do today to help jump-start your motivation to get and remained disciplined in your trading so that you can reach your full potential as a trader? 1) Start accepting that trading is risky and that you can lose money on any given trade. If you truly understand and accept that there is no such thing as a “sure trade” in the market, then you have no reason not to manage your risk effectively on every single trade you take, that is unless you really enjoy losing an emotionally painful amount of money on any one trade. 2) Learn an effective trading strategy that is not overly-complicated. Let’s face it, there’s a ton of trading systems and strategies floating around the internet that are anything but user-friendly. So, if you want to reach your true potential as a trader you need to employ a simple trading strategy that you actually understand end enjoy using, not some messy conglomeration of indicators that resembles a piece of modern abstract art. 3) You need to actually create a practical trading plan around the strategy you have mastered. If you do not create a trading plan that details all your trading strategies, money management, and entry and exit rules, there is no way you will ever pull together the discipline necessary to succeed in the markets long-term. Just like a business needs a business plan, you need a trading plan for your trading, and you need to treat it exactly like a business, because that’s what it is. You would not gamble away your money for a business, so don’t gamble away your money in the markets, instead plan everything out and preempt all your actions in the market. 4) Once you have mastered an effective yet simple Forex trading strategy and have a trading plan in place, you need to create a Forex trading journal to track all your trades. This is essential to you reaching your full potential as a trader because you need to develop a track record that shows you your progress in the markets or lack thereof. This will also work as a self-accountability tool, because if you can manage to pretend that you are “reporting” to your trading journal as if it is your “boss”, you will create some accountability in your trading, and this is important for most traders since without a real boss breathing down their neck they have little reason to stay on track and motivated. In summary, if you can manage to do the things discussed in the four points above, you have a very good chance at succeeding long-term in the Forex market and in reaching your full potential as a Forex trader. However, keep in mind that these things are not going to help you if you only start them but don’t persist with them. You have to follow-through and give yourself some time to see your efforts pay off, forget about getting rich over-night, seriously successful traders have long-since figured out that the “get-rich-quick” mindset is simply not conducive to making consistent money in the markets. About the author: Nial Fuller is CEO and Founder of the webs Foremost Trading Education Community - Learn To Trade The Market, A Global Leader in Forex Trading Education & Training. The Learn To Trade The Market Forex Price Action Trading Community has become a vital education resource for aspiring forex traders.
How Frequently Do Successful Forex Traders Really Trade? If you were to look at the trading account history of most unsuccessful Forex traders the first thing you would probably notice is a large amount of trade executions. Conversely, if you look at the trading history of most consistently successful Forex traders you will probably notice significantly fewer trades were executed over the same period of time than their unsuccessful counterparts. The “snow-ball” effect of over-trading If you’ve been around the markets for any length of time you’ve probably experienced the snow-ball effect of over-trading. What I mean is this; you enter one trade that you know you should not enter, but for some reason you do anyways, or perhaps you risk too much on one trade because you think it looks like it “can’t lose”. Next, you lose on the trade that you entered on a whim or that you loaded up on. Once this happens it’s nearly impossible for most traders to leave their computers and not trade again. What usually ends up happening is that the trader commits a “revenge trade” and tries to make back the money they just lost because they know they traded for a stupid reason or risked too much. However, this revenge trade almost always leads to more emotional trading, and this pattern will typically fuel itself until the trader has lost so much money they are forced to stop trading. The point is that it’s a very slippery slope once you start over-trading, and one emotional trade can literally become an avalanche of over-trading if you are not careful. This is why it’s extremely important to always trade in a disciplined and calm manner; every time you enter a trade you should ask yourself if it meets your trading plan criteria or if you are acting emotionally. Not trading is a profitable position Another thing you are likely to notice if you look at any consistently successful trader’s trading history, is that they likely have longer periods of time than you might expect without entering any trades. This is because successful traders know that not being in the market can be a very profitable position and is more often than not the BEST position to be in. Consider this point, if you lose money because you over-traded, your trading account now has significantly less money than it did before you over –traded. Thus, if you consider point A your trading account value before over-trading, and point B your trading account value after over-trading, you have more money in your account at point A, thus by simply NOT being in the market you are further ahead than if you had over-traded. So, the point is that not trading can actually be a very lucrative thing to do if it means you are avoiding frivolous trades. Successful Forex traders know exactly what they are looking for in the markets When you know exactly what you are looking for in the markets you are far less likely to over-trade. This is because when you know precisely what you want the market to look like before you enter you will have only yourself to blame if you enter the market at any other time. Many unsuccessful traders do not have an effective trading strategy mastered and as a result of this they end up trading what they think instead of what they see. You can stare at a price chart and add indicators to it and make up a nearly unlimited number of reasons for why you could jump in the market at any given time. However, just because you CAN trade at any time certainly does not mean that you SHOULD. The most successful Forex traders trade simple trading strategies that can easily be explained to other people who know nothing about the markets. These successful traders then combine their simple yet effective trading strategies with intense discipline to follow their trading plan, manage risk, and track all of their trades. If you are currently losing money in the markets, try this… If you are currently losing more money than you are making in the markets you will probably find that if you just trade less frequently you will do much better. My suggestion is to focus on the daily charts because they provide a clearer and more pertinent view of the market action than the lower time frames do. You should find a simple and effective trading strategy like price action and really learn to master it on the daily charts first. This will do two things; first, it will allow you to figure out EXACTLY what you are looking for in the markets so that you don’t “make up” trading signals that aren’t truly a high-probability edge. Next, by focusing on the daily charts first you will naturally reduce your trading frequency because you will be analyzing less data, but keep in mind the data that you are analyzing carries much more weight. So, in effect, you reduce the quantity of trades that you take but you increase the quality of them by trading the daily charts. In the world of Forex trading, any time we can reduce confusion and emotion we put ourselves in a very good position to make money consistently Nial Fuller is a Price Action Forex Trader and Coach , His Website is Learn To Trade Forex
Why Use Price Action Analysis to Trade Forex? Below Nial Fuller Talks About Why Traders Should Use Price Action Analysis to Trade Forex. Trading Forex successfully is both art and skill. You need to learn to read the natural ebb and flow of the market if you want to truly understand the price dynamics that occur within it. Trading based off rigid rule-based systems, or black-box systems is a thing of the past that is quickly losing popularity amongst savvy Forex traders. You have probably already experienced the mess and frustration that comes with using numerous indicators on your charts or with trying to trade solely off software trading programs. The core problem with such approaches to trading is that they are not natural. If I may, I would like to make an analogy with food here; when you eat unhealthy food that is not natural, your body suffers, and everyone knows this. Similarly, in Forex trading, when you try to use unnatural trading strategies that are not based off the ‘pure’ price data of a market, you end up polluting your mind and as a result your trading results will be poor. You see, to trade successfully you need a clean and calm mind, just like you need a clean body if you want to live healthily. You get a clean body from eating natural foods, and you get a clean and calm trading mindset from trading natural price action based trading strategies. Price action trading allows you to ‘resonate’ with the market by being as in-sync with it as possible, just like eating natural foods will work to keep you healthy because they are what your body needs and they ‘resonate’ better with your body’s cells than do unnatural or highly-processed foods. Why price action trading is effective in the Forex market I have used about every trading strategy available, because when I first started out in the markets I was stuck in the cycle of analysis-paralysis that so many traders get stuck in, jumping from one strategy or system to the next and trying to analyze as many economic news reports as I could get my hands on. Eventually, I realized that the most efficient and effective way to trade is to simply learn to analyze a ‘naked’ price-only chart. My unique way of trading with price action strategies is the result of many hours of time spent analyzing price movement on price charts. Forex trading is a process of trying different methods and tweaking them and eventually ending up with your own unique trading method. Price action analysis is the art and skill of identifying specific price action patterns in the market you are trading. Forex is an excellent market to use price action analysis in because it is open 24 hours a day 5 and half days a week and this means there are more opportunities for you to take advantage of. All you need to know is how to identify and trade specific price action strategies and you can learn this most effectively from a professional price action trader and by studying the charts. Price action analysis works very well in the Forex market because it is such a dynamic and liquid market. The beauty of price action trading is that it is a naturally flexible method of trading that gives you a perspective on the market that allows you to make sense out of what is happening at any given time. I have been profitable by concentrating on just 2-3 good price action setups that have proved consistently effective for me. If you learn how to read what the chart is telling you and focus on just 1 to 3 setups that you like, eventually you will master these setups / patterns, allowing you to have a better chance of making make money from your trading. Where people go wrong is with using indicators and other overly complicated methods and then constantly jumping from one trading system or strategy to the next. You have to find a truly consistent edge in the market and just concentrate on that until you truly master it, remain in one frame of mind, focus and master those setups first, and then you can add more tools to your arsenal later on. Forex trading is difficult enough without having an overly complicated trading system that tells you to look at numerous indicators when you could just be looking at a simple Forex price chart. Perhaps the best reason to trade Forex using price action is that any indicator you use on your chart to analyze market movement is derived from price and is just showing you in a less vivid format the same thing price is showing you. Some people like indicators because they give you rigid buy and sell signals without you having to think for yourself. The truth is, rigid trading systems and strategies will never stand up over time because the market is not rigid, and you have to trade a strategy that allows you to resonate with the market, not fight it. Just because your charts come with a hundred different indicators doesn’t mean they are going to help your trading or make you money in the markets. Trading success depends mostly on your mindset and your ability to remain disciplined in a realm of constant temptation to over-trade and over-leverage. We are trading currency markets, and the ‘core’ of what we are doing is trying to profit off of price movements. So, why so many traders do not want to make their trading decisions off of pure price action is beyond me. I promise you that if you simplify your trading method and concentrate on using price action strategies you will wonder how you ever traded any other way