It’s no big news that only 10% of people make it in the trading business, but how do they
do it? What are they doing difderently than you? What is their mindset, trading process
and routine like? Today we will go through basic questions and their answers which will
hopefully improve your trading performance.
YOUR TRADE FREQUENCY MUST BE LOWER
How often are you trading? Maybe it’s so often you literally lose count? It’s possible that
you are not in the 10% of successful traders, because you trqde to often.
My big moment of revelation was, when I realized I can improve my trading outcome with
just a little patience, mening that you should wait for low-risk »absolutely obvious«
A lot of new traders don’t realize that less frequent trading will lead you to increasing your
overall profit factor, so with more patience and precision. You gain more control over your
trades, and in the long run that means you can extract more money from the market. One
of the thing the 10% traders do, that you probably don’t, is that when they see a low-risk
event or trade signals they go in big. They are not focused on some silly risk model like the
2% risk model, they are focused on risk reward and dollars risk vs. Dollars gained.
Simple math knowledge can show you that more trades means only more errors and
decreasing your overall profit factor. For an example, check article on LOW-FREQUENCY
VS. HIGH-FREQUENCY TRADING.
Patience and precision won’t only help you eliminate a lot of low probability trades, with it
also comes obvious psychological benefits.
ALL THE OTHER TRADERS ARE YOUR OPPONENTS
If you want to win in trading you need to be smarter and think better than your
opponents. Each trade needs to be planes carefully, which means there is no place foe
being lazy, because someone else isn’t. You need to make sure to do everything you can to
put your trading probabilities in your favor, if you want to be smarter than your opponent,
because believe me the losing 90% of traders are NOT doing everything they can to put the
trading probabilities in their favor.
iT often happens that the contrarion trader (person who makes decisions opposite from
what seems logical or natural) make all the money and wins frequently. So next time
something seems obvious, better take another looj. The market is made ao to deceive new
traders. Always remember, that there is someone opposite from you (your opponent) and
try to see the trades from their side of view. Put yourself in their shoes and rationalize
every possibilitie before committing and if your decision still makes sense trust yourself
and go with it.
IF YOU WANT TO MAKE MONEY, YOU NEED TO LOVE THE MARKET
If you want to be successful trader you need to have 100% passion for financial market
and trading in general. All great traders are practicaly obsessed with the market and love
what they are doing. They live and breathe for trading and if you want to be in the 10% of
successful traders so do you.
INCORRECT STOP LOSS PLACEMENT CAN DESTROY YOU
CORRECT stop loss placement is a very important factor in long-term success as a trader.
Ofcourse stop losses are a necessary risk management tool but they can also be a reason
for trader to get stopped out of a trade for a loss (there stop loss gets hit).
A lot of traders make mistake by placing their stop losses at the wrong levels, and in many
cases they are too wide or too tight.
Stops can’t be placed randomly or based on the position size you want to trade, they must
be reasonable and make sense, be in the context of the price action trade signal and in the
context of the current market dynamics. The main problem is, most traders place stops
arbitrarily and not at logical areas of the chart with any real thought behind them. And this
will destroy even the best traders, with most skills and knowledge.
THE MARKET WILL ALWAYS GO FURTHER THAN YOU THINK
Great trends are often self-fulfilling, which means they tend to continue higher or lower,
because the longer they persist the more traders jump on-board, even the weakest hands.
And when that happens trend comes ceushing to an end.
People like to bet against trends for many different reasons. Most common is arrogance
from wanting to pick the top, or bottom or believing that ”what goes up, must come
down” and reverse. This is a ridiculous thing to believe because one close look at any price
chart will show you that market does not behave that way. But mayority of traders seem
to never learn because they still continue to fight everything logical and obvious in the
IF a market trending is moving in one direction for some time, it’s logical it will continue in
same direction until it ends. But most traders due to their emotions, and over-analyzing
the market try to fight this probability.
Have you ever seen a chart moving in one direction really quickly and when it would be
logical to swing back it starts moving in same direction once again? This is a self-fulfilling
concept, it means that the longer a trend goes, more people jump on-board, at the end
even the amateurs and ”worst” traders because of theit fear of ”missing out” on the
move…Because it has come so far and looks so good, but that is usually the point when it’s
ready to end.
As market trend, they remove stop losses and create liquidation or position covering that
makes the trend go further, it’s a natural phenomenon, that contributes to the self-
fulfilling aspect of trends. In bull markets, when a market makes a new high frequently,
every day a huge hoard of bearish traders are getting stopped out of short positions and
liquidating, which results in yet more buying.
Let’s go back to the contrarian concept…when you think the market is ”to high” or has
gone ”to far” …it’s very likely it will keep going further. So try to resist betting against a
freight train that is headed in one direction. The only way to be sure a trend has ended is
when the new direction trend is underway.
Here are some examples of strong trends that acted like fast-moving ”freight trains” that
mainly moved in same direction, stopping many top and bottom pickers out in their way.
TAKE ON RISK AND BE CONFIDENT OR FAKE IT TILL YOU MAKE IT
Every great trader needs to be able to take risk and handle the emotions that come with it.
Without risking now and then you can’t make money. Trading is definitely not for the
weak and fragile-minded. The top 10% traders who make money on daily basis do not feel
regret when they lose, they are not trying to win it back. They take the punch, shake
themselves off and get up again stronger and keep on fighting.
To be in the top 10% category, you need to turn off your emotions, back yourself and act
with convistion. Even if you have to »fake it till you make it«
You must convince yourself you are profitable and you are about to make a mayor trade.
You need to act like you already live the lifestyle you desire, if you want to reach it. Your
mind is easily fooled if you keep repeating those words every day. And in no time it will
become the way you act naturally.
If you don’t approach your trading room with confidence the markrt will chew you up in
TRADE WITH SOUND STRATEGIES AND BELIEFS
Market can do two thing, go up or go down. And if you are a trader those things for you
result in a profot or loss. It’ as simple as that.
Amazingly traders over-think this simple fact. But over-thinking comes because the whole
industry is made so, that you think trading is complicated. The best way to handle market
is to have a strategy and belief system that is usefull for any market, on any timeframe at
any point in the future. You need cunduct analysis that are based on price. If you can
anticipate price movement you can profit from it. It really is as simplle as it seems, and for
some of you it’s already all the explanation you need.
Traders career needs to be built on studying and trading price action. Your beliefs in the
market must be logical on one side but still simple on the other.
Like we already know, market cab go only up or down so don’t over analyz things and
make them more difficult than it has to be.
What causes traders to win or lose is actually things in the middle (the stop loss
placement, the entry price, the target price, the emotional roller coaster…) The trading
method is only one part, so don’t go searching for the »holy grail system« because it does
Learn to read basic price action and understand how to plot key levels on charts,
underatand the genneral trend of a market, and you are already on your way to the top
10% because you are looking at the real market with realistic eyes not like your
opponents. By combining this trading approach with the important points we have
discussed above, and applying yourself consistently, you stand a chance in the jungle we
call the market. If you want to start thinking and acting like the top 10% of successful forex
traders, checkout my ELITE TRADING PROGRAM for more information.