Welcome to Trading Traps
Ten years of searching for a means of making some money in the financial markets has seen many systems tested and hours or research and scanning of charts for an edge. Over this time I have owned shares or stocks, I have traded futures markets and I have traded forex markets. I have found that forex markets are the most accessible and most suit my trading personality. Please read on to get a glimpse of what I have learned and also some insight into what methods and systems I now use to trade profitably.
A free trading system is available for your review too,
please scroll down to the link to obtain your copy free of charge.
Over this time, I have learned some valuable lessons. These lessons can be summarised as follows.
1) Without a system that you can trust to give you an edge, you are never confident on the system you are using and end up changing your trading methods when you suffer a couple of losses....... invariably testing other systems with real money and losing more money... Find a system that you think gives you an edge, paper trade it, back test it and forward test it using historical data until you are completely confident that the system provides you an edge and that you can trade the rules without having to think time and time again and without changing the approach on entries and exits.
2) Have enough money to feel that your trades are real and also so that you don't trade with levels of risk that are higher than you should ever trade with - no more than 2% per trade.
3) Don't have multiple trades open at the same time - invariably, no matter how unlinked you feel the markets you are looking to trade are, invariably, there will be links and you may be risking more than you think.
4) Know what trading time frame most suits you and your trading personality. Some people do not have the discipline to trade on short time frames as day traders and other people may not have the capital required to trade end of day with sufficient risk control - perhaps somewhere in between is most suitable??
5) Know your trading personality - are you a gambler? Do you have sufficient discipline to take control and responsibility for your trading? Can you stick to the rules? Can you stick to the risk control levels and money management requirements to ensure that you keep your edge. Can you place your stops at the right level of leave them in place without adjusting them? Can you stick to the rules of your system if you have a loss or two or even three in a row? Do you start putting larger trades on when you are losing or when you are whining? Does trading define who you are? You need to know the real you and have answered these questions open and honestly with yourself.
6) Stay away from Trading Robots or EAs as they are known - I am yet to find one that actually works reliability and consistently. And I like to know when I have a trade open and therefore have money at risk on the markets.
What I have learned over the years is there are systems or methods out there that can give you an edge and most of them are relatively simple - what is difficult is if you can stick to trading one system and if you can stick to the rules or not - discipline is key and yes, I believe that it can be learnt but you need to feel that you are 100% confident in your system. And you need to be in control of your ego. If you can achieve this then I feel that we can achieve success in trading.
So, how do we find a system that gives us an edge. Well one system that I have found out of hundreds that I have tried is the FX Morning Trade system. You can review this trading system in the link below - please feel free to have a look and bookmark it again for later reference. I would be more than happy to answer any queries that you may have on the system.
I have modified this system such that I place two parts on each trade. It is a manual system with rules for stop loss orders and targets so you can set and forget. I use the set rules as per the system for one part of my trade and I use smaller stops and smaller profit targets for the second part of my trades. I place these each day at 6:30am GMT time and it literally takes 2 minutes to place the trades including trailing stops. I then walk away and forget the trades. On my way to work each morning on the train, I check my positions on my Iphone brokerage app and typically by 8am GMT, the trades will have closed and most normally for a profit. Nice, what a great way to start the day.
Before trading with real money, I tested and tested this system and adjusted to suit my own trading personality. And the best way to test such systems is using FX Tester. This is a fantastic software package that allows you to forward test your trading systems with real market data from your broker. It tracks profit and loss as you go and you are able to place your trades exactly as you would in the real markets. The advantage of this approach is that you are able to test without being able to see the chart in advance and be fooled by the various biases that we invariable form about how we think we would place a trade in a real trading position. FX Tester also allows you to hone your trading skills and making a habit of the rules through repetitive application of the rules over and over again until you know longer need to resort to the trading manual or ask yourself questions about whether you should or should not be getting in to a trade. If you can't get to this system before you start trading with real money, you will make mistakes and you will lose money. This software tool is invaluable. If you are interested in this software, please see the link below where you can review it for yourself.
Free Trading System
To get a free example of an end of day forex trading system that I have developed and tested extensively using Forex Tester, please click here to contact me and I will happily send this through for you to review.
FX Morning Trade
Click here to see how you can get this system for yourself.
Forex Tester Software
Click here to see how you can get a copy of this software for yourself.
Trading Lessons
I have learnt a lot and lost a lot. But through that process, I am now trading happily and freely and making consistent profits. What have I learnt along the way? A lot about my personality and a lot about what is important in being successful as a small time trader who wants to make a second income on the side.
In this site I provide some enlightenment on what I feel I have learned in my time trading as a small part time trader. I dream of earning more from my trading than from my day job. The dream of financial independence and being free of the day to day traps of the rat race keep me at it. Now that I am consistently making a profit, I have a healthy feeling of empowerment - it makes for a good combination - a job that I enjoy and allows me to interact with others in the industry and a healthy little second income on the side that keeps me excited.
Take the personality test...... a little mind teaser! See how you perform. The test is based on actual experiences from my own trading with actual outcomes. Try going through it twice and see where you end up if you made a different decision........
What is presented here?
- What causes most people to lose in trading (around 95%)
- How trading can be improved by recognising the traits of about ones personality
- Trading methods and personalities
- Ups and downs of trading - the ego
Here we go..............
I believe there is a holy grail to trading. It resides on ones shoulders. Your own mind and personality I feel are the keys to success. I don’t mean intelligence. I am no genius, far from it. I mean diligence, I mean commitment, I mean desire for success, I mean being responsible for ones actions, I mean cognitive thinking, I mean self-control, I mean self-awareness and focus. Strict money management and discipline. Oh and having a system that gives you and edge is also helpful. What I have found is that if you are around the markets long enough you get to know how to read the markets and where and when to get in to trades that will quickly become positive allowing you to then set your stops quickly to break even so that you have a free trade - all reward and no risk.
It is regularly stated that 95% of people who try their hand at trading lose their money or lose enough that they fear losing any more and quit. Why? Fear, greed, lack of self control and discipline, no trading plan and no system that give them an edge.
No doubt if you have found this page, you are on a mission, perhaps a journey, the journey of developing into a financial market trader. A journey that I can well empathise with, a journey that I am part way through and I wish to be further along, a journey that seems to be 3 steps forward and 5 steps backwards.
Read on and I will give you what my understanding of the Holy Grail of successful trading is. Is there such a thing? I believe there is, but it is not found out with, but within one's self, in the mind. The mind controls the key to success in this industry. Control the key to your mind and you will control the key to be successful in trading.
If this sounds familiar or indeed you have not even reached this phase in your trading career yet, then please read on.
Am I a successful trader - by no means. Am I a believer? Yes. Do I have a dream? Yes. Have I come upon insurmountable setbacks? Yes, again and again. Do I forge on? Yes. Am I slightly mad and a little bit Obsessive/Compulsive - probably.......
Trading Traps - The trading mindset, as listed below, WILL mean you lose everytime you attempt to trade. Well you might get the once in awhile lucky trade but they are few and far between.
- Not having a trading plan
- Not trading to your plan and trading rules
- Not sticking to a system once it is profitable and providing you with an edge
- Not having a system with an edge
- Trading a timeframe that does not suit your personality type
- Trading defensively after a loss
- Not following initial reasons during trade
- Not using your rules for stops
- Not taking action after analysis complete and opportunity presents itself
- Not keeping a Trading Journal on all trades and lessons learned
- Letting other opinions in the news affect your analysis of a trades direction
- Thinking the new matters
- Feeling out of control while trading
- Fear of missing out
- Fear of losing
- Fear of leaving money on the table
- Cutting wins short
- Letting losses run....
Handling losses is the key to being an effective trader. Many traders hold on to losses too long and gets out of winners too quickly. The result is that you have larger losses than you have winners and even if you have an edge on the number of winners you have, statistically you will lose. We spend more energy on not having a loss than we do on having a winner.
If we get into a losing position, our mind play tricks on us. We believe that we can engineer our way out of the position or that by some miracle the markets will swing back in our favour. I know ALL too well. I can guarantee the trade will continue to go the other way to spite us - the Pros controlling the markets will be looking through the crystal ball laughing at us as they wipe our trading accounts out.
See what happened to me in the Brain Teaser Trading Test - take the test below.
The average person's ego does not want to admit to being wrong. A common error for people trying to learn to trade is to hold onto a losing position hoping that it will turn around and thus avoid being wrong on the position. We lose our objectivity about the trade and become subjective. Reasoned or cognitive thinking goes out the door. We close profitable trades quickly in order to prove to ourselves and our egos that we were right. To get around this mind set takes development in a number of areas. You must trust your system. It must give you an edge. You must be trading at safe levels so you do not feel you have to let a loser run. The system must be mechanical in both entry and exit. This is critical. You have to play your exits just as well as your entries.
Take the personality test...... a little mind teaser! See how you perform. The test is based on actual experiences from my own trading with actual outcomes. Try going through it twice and see where you end up if you made a different decision........
A lot to take in, but what the above list comes down to is attitude, ego and personality. Focus on your trading psychology. If you concentrate on having the above right then you should succeed.
Best of luck with your trading,
Michael Still