Jump to content

Welcome to the new Traders Laboratory! Please bear with us as we finish the migration over the next few days. If you find any issues, want to leave feedback, get in touch with us, or offer suggestions please post to the Support forum here.

  • Welcome Guests

    Welcome. You are currently viewing the forum as a guest which does not give you access to all the great features at Traders Laboratory such as interacting with members, access to all forums, downloading attachments, and eligibility to win free giveaways. Registration is fast, simple and absolutely free. Create a FREE Traders Laboratory account here.


3 Pillars of Profitable Forex Trading

Recommended Posts



Lately I have been getting asked many similar questions regarding trading success. I don’t really like to repeat myself if there is no need, so I decided to write a short article to explain is a solid base for success in trading Forex and Futures.


In order to achieve trading success, there are 3 main areas of focus. They are all of equal importance and must not be separated from each other. I will cover these in more detail below. These areas are:

1. Trading strategy or method

2. Discipline

3. Psychology


Contrary to what is being taught about psychology importance in trading up to 90%, the other 2 concepts are as equally important. If a trader has got only 2 out of 3, then the results are either consequent losses or a break even. Let me explain why.


If a trader uses a method that doesn’t really work, or works with only temporary success, no matter how hard he tries the results will remain the same. It’s said that you have to stay with a method for a certain period of time to make it yours. I strongly recommend not to switch methods or trading strategy more often then once in 6 months if you want to be a successful trader. However, this option also has its disadvantages. If you stick with the wrong trading strategy, you could spend years with no results. What I mean by “the wrong strategy” is the one that is too subjective and almost no one can trade it successfully. Let’s put it in to plain English, ‘the wrong strategy’ is the one that fails 60-90% of the time.


While considering a trading strategy to learn, you need to understand that all successful traders are very mechanical in their trading approach. They do the same thing every day. It can get boring sometimes. Therefore, when you choose a strategy to learn, you need to answer this question: “Is there any chance you can become mechanical with this particular strategy?” This means the fewer variables to consider while making a decision, the easier it is to understand and apply.


I want to add few more words about picking the wrong trading method. There are too many mentors selling strategies that they never trade. They are called ‘scam artists’. They sound very professional when they talk about trading and their systems, but that’s because they are good salesmen. In reality, there would be no difference between them selling you their strategy for day trading, or a pack of fantastic knives.


I need to mention a pitfall for those who have just discovered the world of trading. Most forex beginners fall into the trap of listening to advisors or financial experts and make their decision accordingly. But here is the sad truth. The Brightest analysts cannot trade their own analysis. There is a huge difference in being a good analyst and being a profitable trader. Why is that??? It’s because profitable/professional traders posses a set of skills that are crucial for being profitable in forex. Among these would be a successful trader mindset, a proven method, absolute discipline and hours of screen time. Analysts don’t have that. They are paid for talking. If they knew how to trade their own analysis they would trade it and make more money then they are making now.


So when choosing a trading strategy or a forex coach, you need to be concerned about real evidence of his knowledge and skills. The best option would be to see him in action. Rarely would you see any scam artist trade live with his automated software nor trading his method in front of a live audience. Professional traders have nothing to hide; they have winners and losers.


Other important questions to ask yourself when choosing a trading method would be is it applicable to different market conditions, does it work in real time or only hindsight and are the stop losses offered by the method realistic? If someone tells you that your stop should be 100 pips in day trading then that should alert you that something’s not right.



Trading discipline is as equally important as trading psychology. When you have a flaw in discipline you are guaranteed to fail. But what do I mean by that?

Trading discipline covers these questions:


- Can you take trades every time your method tells you to do so?

- Do you skip trades because deep inside you have a fear of losing another trade?

- If you have your daily profit target, are you able to turn off your screen and walk away when you’ve reached it? If you don’t have a daily profit target how do you know when to leave the screen?

- Do you have any revenge trading habits?

- And last but not least, are you able to trade with full accordance with your trading method or is your current method a combination of gut feel and some knowledge from classes you attended?


Now when you have answered all these questions, you know what you need to work on to get better in your trading discipline. Write the answers down, highlight them and then stick them on your monitor. This will be a reminder for you every time you fail in following your rules. You can only grade yourself 100% on discipline if you have automated trading habits to the extent when you don’t think about it anymore and you are ok to consciously skip trades that don’t meet your entry criteria. It takes time to get absolutely disciplined, but takes much less time compared to getting your trading psychology right.


Talking of trading psychology I don’t want to repeat what you know from other sources. However, I need to mention that proper psychological attitude can’t be formed if the other two aspects I talked about haven’t been mastered. You can’t develop a winning mind set if you fail in having a successful trading strategy or being somewhat disciplined.


Successful trading psychology consists of a successful mind set, the ability to resist stress, the ability to withstand tough periods in your trading and taking full responsibility for your trading results. Building a successful trader takes time, for some it takes years. Some never get to that point.

One of the main reasons why traders fail in becoming successful is an improper expectation of the industry as a whole and the inability to withstand financial and domestic pressure in the long run. This influences the process of forming a winner’s attitude and leads to the desire of wanting results here and now.


There is no magic in trading and no trading systems that are 90% accurate. Miracles don’t happen here. The path to success is long and hard, but when you get there it is totally different compared to where you are now in trading. You will enjoy it and even get bored with making money.

You can take a short cut by finding a good mentor, but you can also do it on your own. The only difference is the time that you will spend on your journey to success.


After reading this article you should be able to see and evaluate your current trading against the 3 pillars of profitable trading that I have mentioned. It should be easy for you to identify what part you need to work on. If you score only 2 out of 3 it still won’t work. You need to score 3 out 3 to get different results from what you are getting now. Remember, the Forex market is the only place where everyone has an equal chance for success disregarding your background, education, social status and your past achievements.



Share this post

Link to post
Share on other sites

Join the conversation

You can post now and register later. If you have an account, sign in now to post with your account.
Note: Your post will require moderator approval before it will be visible.

Reply to this topic...

×   Pasted as rich text.   Paste as plain text instead

  Only 75 emoji are allowed.

×   Your link has been automatically embedded.   Display as a link instead

×   Your previous content has been restored.   Clear editor

×   You cannot paste images directly. Upload or insert images from URL.

  • Topics

  • Posts

    • Yes trading can give as freedom but it has relatively high prices if you don't want to study learn from trading mistakes or fall into gambling. Trading success isn't something you can achieve quickly same as in other businesses. 
    • Date : 21st January 2022. Market Update – January 21 – Stocks Sink – Netflix & Peloton Crash. Stock markets sank again (Nasdaq -1.3%) Tech companies led the slide, (Peloton -24%, Netflix -18% post results. USD firmed as Yields & Oil dipped, Gold held onto to gains. Markets are nervous and risk aversion has picked up as investors eye shaky earnings, and waning confidence, with mounting tensions over Ukraine adding to geopolitical tensions. US Weekly claims hit a 3-mth high, EZ Inflation was an ATH and North Korea said it may resume testing its nuclear arsenal. Asian markets and AUD & NZD lower (AUDJPY -0.62%) ASX 200 (-1.2%), Nikkei 225 (-1.8%).   USD (USDIndex 95.65) ticks higher slips as Yields decline . US Yields 10-yr moved closed at 1.83% & trades at 1.785%. Equities – USA500 -50 (-1.1%) 4482 – USA500 FUTS lower again at 4467. USOil – Fell below $82.00 afrom highs at 87.95 on Wednesday, Inventories increased by 0.5m vs 2.3m drawdown. Gold – held on to gains topped at $1848 and holds $1838 now, holding the key 1830 support. Bitcoin under $40,000 back to test $39,000, FX markets – EURUSD back to test 1.1300 – 1.1322, USDJPY now 113.80 & Cable back to 1.3570, the week’s low. Overnight – UK Retail Sales plunged -3.7%, Consumer confidence slipped 4 whole points to -19 and Japanese core inflation was inline at 0.5%. European Open – The 10 US Treasury yield is up from overnight lows, Bunds are also finding buyers in opening trade, and the 10-year continues to shy away from turning positive, as ECB officials continue to push back against speculation of an early rate hike at the end of the year and market sentiment generally turns cautious. DAX and FTSE 100 future are posting losses of -1.4% and -1.1% respectively. Today – EZ Consumer Confidence, BoE’s Mann; ECB’s Lagarde, BoJ’s Kuroda Biggest FX Mover @ (07:30 GMT) EURNZD (+0.66%) Rallied from 1.6675 yesterday to breach 1.6800 now. MAs aligned higher, MACD signal line & histogram higher. RSI 73 OB but still rising, H1 ATR 0.0026 Daily ATR 0.0100. Always trade with strict risk management. Your capital is the single most important aspect of your trading business. Please note that times displayed based on local time zone and are from time of writing this report. Click HERE to access the full HotForex Economic calendar. Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding on how markets work. Click HERE to register for FREE! Click HERE to READ more Market news. Stuart Cowell Head Market Analyst HotForex Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.
    • Best way to make money is forex trading however it still requires a lot of hard work needed to build necessary skills which are required to earn money from forex.
    • I bet he was referring to acquire all the basic necessary skills needed to start earning money from the forex trading.
    • Yes agreed we can do forex trading as part time in the start and when we learn trading we can switch to full time trading.
  • Create New...

Important Information

By using this site, you agree to our Terms of Use.