The pitfalls.

9. Mindset of a Trader 3. The pitfalls.

The pitfalls.
99% of the traders make mistakes. So here are the most common mistakes for you so you
hopefully won’t make the same mistakes.

Losing trades:
Losing trades are just another day at the office. It’s just that simple. Don’t let them get to
you. Every trader on Wall Street or trading from his home office will face losing trades. A
trader with a 80% success ratio will still lose 20 out of 100 trades he makes. Keep your
risk tight, safe and disciplined.

Losing money:
Unfortunately 90% of all traders are losing traders. They lose their confidence, start
doubting themselves. This encourages them to pay for bad Forex services or even
desperately let other “winning” traders trade on their account. Again, there are many
people with no winning track record willing to help you for a certain price. Don’t be
desperate. Your will land power is all you need!

Most important reason for repetitive losing traders:

Chart Loonatic:
There are lots of fundamental impacts that could easily distract a trader. Also there are a
ridiculous amount of trading systems and trading software, which have lots of indicators
and templates etc. As a trader you’ve got to filter these indicators and narrow them down
to the ones that matter the most for your own strategy. WARNING: This could be difficult
for a beginning trader.

It’s not necessary to spend hours and hours behind the screen analyzing the news or
charts. Keep it simple and stick to what you need. Keep it organized.

Over-Trading:
Most traders lose money simply because they trade too much. We call this over-trading.
Over the years we have learned that traders succeed on their demo account but once the
real game begins they start losing. Once your real money is on the line your emotions are
kicking in. Prove that emotions can kill your account. Over-traders purely trade on
emotions.

Everything comes down to your technical skills and not your emotions. So try to create an
environment with little to no emotions for yourself. This is done be being organized and
having a plan.

Why Risk Management is so important:

Risk management is vital for success, safety and sustainability in Forex trading. Risk
management won’t let you lose more on a trade than your comfortable with. Lots of
traders forget about the chance of losing on a trade. Ask yourself this question: “Why
would you take more risk than your comfortable with?”

Even if you are one of the best traders or you have this unique talent to see the right spot
to step in a trade. Without good risk management you will never be a successfull trader on
the long term. Basic knowledge is to always go for more PIPS as your willing to lose.
Aim for the money not for the PIP:
Remember Forex is a job not a casino. Traders who approach the Forex market as a
gambler or as an addict to money won’t make the right decisions. He will start thinking
irrational and make mistakes. So don’t think of in dollars but think in PIPS.

Let me break that down for you. When your mind is on the money and you think in dollars
your risk management won’t work most of the time. There is always this voice of the devil
in your head saying “What if…” Or “Maybe this or that will happen”. Stop thinking like this.
Get these dollar signs out your eyes and start think like a real trader. It’s not that easy as
use a couple of big lot sizes and flee the scene when your positions are positive. So
always calculate your wins and losses in PIPS. Always trade with more or less the same
volume. You trading plan has to have PIP goals and PIP risks. How many PIPS do I want
to win? Or how many PIPS do I want to risk with this trade?

No Game Plan:
Most common made mistake is not having a game plan at all. Traders just start out of the
blue without a real strategy or plan. If your watching sports, do you think the athletes don’t
have a game plan? I bet you a $100 that every team or individual athlete has a game plan.
Don’t think like all the other traders “I’m going to make my plan after I’ve done a few
trades”. You will end up with an empty account.
Right thing to do is keep track of your trades. Make reports of your trades (a trade journal)
so you can look back at what you did and maybe change your tactics a little bit. Organized
work like this will help keeping your emotions out of the game as well.
Remember that the game plan you started with doesn’t have to be the winning one, so call
a time out, look back and adjust to a winning game plan. Pretty cool right! You can be the
coach of your own professional sports team!

From demo to a real account:

After a few successful trades on your demo account it’s tempting to switch directly to a
real money account. We completely understand this hunger of you. And why wouldn’t you?
After all you’ve just made a few winning trades. The Forex world is all yours baby! STOP
right there! Don’t make this mistake unless you have a good strategy and master the
strategy of price action trading. If you don’t? Keep playing on your demo account until you
are consistently successful for 3 to 6 months. This is a really important lesson. You won’t
dive in a deep swimming pool not being able to swim right?

It’s just a big difference between a demo and real account. Once your trading with your
own real money emotions will get involved. That’s why you need to take your time and
wait to your completely sure of yourself. If not, keep practicing. As told before: “Practice
makes perfect”.