Are you a born trader? I’m not.
Recently I came to the realization that I have two distinct personalities. There is ‘Nick’ and there is ‘Trader Nick’. I had to create this second personality to do my trading.
You see I am a terrible trader because I am:
- Impatient
- A risk taker
- I do not plan ahead.
Ok that’s enough of my anti-trading qualities. The bottom line is, I am not a natural born trader. The three qualities, mentioned above, should have utterly destroyed any chance of me becoming a successful trader, but they didn’t.
I was able to create a trading alter-ego. A guy that:
- Is infinitely patient
- Does not take unnecessary risks.
- Plans ahead
This alter ego awakens every time I open my trading platform.
So why do newbie traders find it so hard to defy the odds and become successful traders?
Because it’s hard. Because it requires us to significantly alter our perspectives and step outside our comfort zones.
It’s almost like becoming another person.
How to Create a Forex Trading Alter-Ego?
Well, that is far beyond my realm of expertise.
What I can do for you though is explain, in detail, the traits that make up my alter ego. Maybe you can adopt some of those traits for yourself.
These traits are not all essential but I have found that they help.
Dissecting My Alter-Ego
So let’s inspect the mind of my alter-ego and see what we can find.
First Important trait:
Letting that which does not matter truly slide.
This trait is first because it is far and away the most important trait, when it comes to my trading. The ability to let unimportant things slide is an invaluable asset to any trader.
Many newbie’s tend to dwell on unimportant details. These details can range from a simple losing trade to a winning trade that was closed out too early. If I have a losing trade, or I close out early, I let it slide. There is no reason to dwell on the negative.
So learn to let it slide. You need to concentrate on the positives.
Second Important trait:
Embracing mistakes and learning from them.
Easy one…… and don’t be afraid of screwing up.
Before I became consistently profitable, I blew two trading accounts. My first trading account was $1,000. I managed to double the account in one week and then lost it all. I did pretty much the same thing with my second account.
So I messed up a few times, but instead of crying like a baby, and giving up, I kept at it. Mistakes are essential to our learning. Do not be afraid of making mistakes but ensure when you make mistakes, you learn from them. There is nothing dumber than consistently making the same mistake.
Living in fear of screwing up restricts your trading freedom. So let go and relax a little, you are going to make mistakes as they are inevitable. Accept them, learn from them, and get over them.
Third Important trait:
No Fear
No you don’t have to be a mindless, emotionless robot. However, if your heart starts pounding, beads of sweat appear on your forehead and your hands start to tremor whenever you enter a trade you have a problem.
I used to get really nervous whenever I opened a position and because of that I used to close out early. It sucked having a target of 100 pips and only making 20 pips because I panicked, at the sight of a slight retrace. My solution was to trade less money.
It’s not rocket science. The more money you have on the line the more worried you become of losing it. Over time, I started to increase my stake, in stages, as I built up a resistance to that trading nervousness.
Now I am a fearless trader. Muahahaha!
Fourth Important trait:
Independence
If you are not independent you will have a very tough road ahead of you. I am sure a lot of you know exactly what I’m talking about when I say traders are constantly put down by family and friends. Perhaps you’ve heard them say these kind of things before:
“It’s a scam”
“It’s too hard you’ll never make it”
“Get a real job”
“You have a perfectly good and secure job, why do you want to leave it and take a huge gamble?”
The second you let that crap get to you, you’re done. The ability to be independent and block out all the negativity you will receive is essential. The truth is, if you are coming into this market you are an adventurer and you should be proud of that fact. Most of the people putting you down will never do an exciting thing in their lives.
Learning to ignore that rubbish, by being independent, is a massive weight off any traders’ shoulders.
Fifth Important trait:
Patience
Sometimes, I look at the market and I think, “This is untradeable”. Sometimes this happens every day for a week. The market can be completely untradeable at times, so I won’t trade for that whole week.
Every day that week, I will get an email from somebody saying “I lost money”. Well of course they lost money. They are trying to trade an untradeable market. Most newbie’s do not have the patience to sit out the bad periods. They just don’t seem to be able to sit and watch the charts, for a week, without taking a trade.
Patience is essential to a trader. There will always be periods in which you shouldn’t trade. Having the patience to wait it out is invaluable.
Being patient is also useful during a trade. Waiting for your target to be hit, instead of closing out early, takes a great deal of patience.
A patient trader is a successful trader.
P.S. I am not a patient person, but when it comes to trading I can sit on the sidelines, for weeks waiting for a trade. I learned to apply patience to my trading. If I can do it, so can you.
:vidcourse:
Chad
Excellent Post! It is much needed advice. Your posts about “trading psychology” help me even more than the technical analysis posts. In trading, I am my worst enemy. So your advice about creating an alternate “me” is worth considering.
Mor
Nick, thanks so much for sharing your trading wisdom!! MUCH APPRECIATED!!! Keep up teh great work sir!
David (dwright)
Great post Nick.
After posting my “Breaking Trading Rules” in the Forum this makes good reading. I will try and take it on board after a bit of a FX holiday.
dicledafar
Thanks Nick for sharing your knowledge. I have read books, browsed websites and watched lots of forex videos from “experts”. And with confidence I can say you articles and advices are the best I’ve ever read. Thanks again.
lou fiore
Nick, You are doing a great service for us, can’t thank you enough .. keep them coming…Lou
Gavin
Hi Nick – thanx for the post!
You cannot help but have a rush of blood when entering a trade.
The rush is eased some what when the profit & loss colour is blue but when its red thats when the blood rush does overtime.
I can’t wait to become fearless when entering trades – a few more gains should have that going in the right direction.
Sean
All excellent stuff Nick. I’ve been in forex for about 12-18 months now and consider myself still VERY much the newbie. Your post contains many of the same traps and pitfalls that I know I went through, and am still trying to wean myself off. Based on my short forex experience thus far I wholly endorse your comments and commend you for putting them down for others to read and learn from, including me. Your efforts are very much appreciated by many I’m sure. Thanks.
Olby
Ta Nick.
A lot of sense.
Mark
Thanks Nick for the wisdom.
I’m glad to hear that I’m not the only one who has blown through a couple of accounts.
I will never, never give up.
I will be a profitable and successful trader.
ashfaq
thanks nick, the issue of becoming a fearless trader is a very important ingredient, and i will to use this opportunity to tell u that ur trading method is the best and one thing i discovered is that almost every scalp line formed has a history in the monthly chart for example scalpline 170.41 price has bounce from the line in 1996,so is the scalpline formed today at 154.57 price has bounce from the line in 1995,that is very interesting history is repeating itself.
dico36
Hi Nick. Superbe and sensible information. Wish i had found your site months ago.Keep up the good work.
asiangal30
Nick,
Excellent post! Thanks for all the wisdom. There is hope for me as a newbie to learn to become a disciplined and successful trader.
Tim
Another good advice for me. It couldn”t come at a better time than this to me.
Thanks Nick,
SlimTrady
The perfect summary of why people lose at trading.
Learn the lessons on trading then learn the most important lesson – patience.
Great post Nick.
Scott
Wow, Nick… I’ve *NEVER* seen you post anything like this.
Nothing has dealt with mindstate or identity, just mechanics, feelings, and the occasional comment on how you deal with things.
This is a completely new side of you, (at least to me) and it’s really a good thing to share. It helps me see relate to the whole idea of what it is to be a trader. It answers questions like, “is my brain even wired for this?” And, “maybe this is possible, just not to me.”
Thank you, Nick. I do hope to know more of the many dimensions of trading the Nick B method.
By the way, I see this as so essential that it absolutely must be included in the eBook.
Cheers.
-Scott
Mackgren
Wow, Nick you summed up exactly my trading experience thus far, and its comforting to see that you went through the exact situation I am going through now…on your way to becoming succesful. Its actually uncanny. Anyways, I blew 800 bucks by doing all the wrong things this past week. I would close out trades way early, or use a really tight trailing stop so I didn’t lose money. However, on trades that went against me, I kept waiting and waiting as more of my money left thinking it would come back. I was super impatient and would enter tons of trades a day, even though I knew not too. Its hilarious to me, that when I paper traded your system I was super profitable and succesful because I was patient. When you have real money out there though its sooo different! Thanks for this post, I was about to call it quits, but this inspired me to chill out relax, and get an alter ego of my own. Cheers!
WRR
Nick,
great post. Your comments are the real deal. With your method, if price isn’t at a line there is no trade. But you also don’t trade when the market is slow or choppy or during times of acute financial uncertainty such as over the past few weeks, etc. Perhaps you could do a post listing the circumstances under which you will not trade. Since these are rather subjective matters, clear definitions where possible would be helpful. Personally, I found it took screen time to learn what a slow or choppy market looks like.
I appreciate all your work on this site.
Cheers,
WRR
Bruce
Good article NIck. I learnt to put the stops/take profit in and then go away, it takes all the fear out of trading.Although it may sound negative I consider the money i have placed on the trade as LOST but it is surprising the amount of times once the trade is complete you have had a win (well most of the time !!)
Anyway thats how I deal with my fear and impatience.
Keep up the good work NicK
Cheers
Bruce
NZ
NickB
@WRR: Hello WRR that is actually the topic of my next post. Thanks.
NickB
@Scott: Thanks Scott, over the next few weeks I will be writing the new edition to the e-Book and I will include this article. Thanks
piphog
Great post Nick. I thought I was the only one who did those idiot things- all of them!! I have been trading about 5 yr now- very conservative so have not blown any accounts- but I sure had to unlearn a bunch of crap from a lot of “traders”. I am happy to say you have set me on the right track FINALLY.
Bap
Great Post
This might be your best so far.
luis
Thanks again for your time and will to help others
John Umoru
This is a very profitable post to me because, I happen to fulfil all the negative aspect of it but since I began reading and learning from you and especially your trading method, I am really gathering a lot of confidence.
I am happy t know there was a time you bagged tw closed accounts; you see, I have around $1,000 already gone, and, How? Just as you mentioned. I made sure I took more than twenty trades in a day, so I gain much PIP but end up losing all gains and more each day before closing. I had no Session as I desired traing all as far as I am not sleeping. I didnt observed untradability and if I was to mail you then, it would have been “I LOST MY MONEY”, It is said that fear and greed rules the market so fear made me most times, close the market at 20 pips only to see it went hundred PIPs and then I emotionally jump in to regain and loss more. I beehaved too dependently watching Indicaors and listening to self proclaimed gurus and losing.
I can go on and on, but you know what? I noticed these traits by reading you. And the past few days have been sweet NICK! I have been trading with very insignificant amount but the PIPs have been great. I have begu the process of creating another me, the trading me. fearless, patient, independent etc.
I am very grateful Nick and God bless you real good.
skipw
Nick,
Thanks again for help and wisdom.
RobertM
Well done, Nick.
It’s hard sticking to your rules. My rules said “stay in the trade”, I chickened out with a 250 pip profit. What did I lose by not sticking to my rules? 1800 pips! DOH!
And now it’s time to get over it..there’s absolutely no good that will come out of crying over spilled milk (even though it’s hard).
I broke all 4 of your traits and paid the price. Live and LEARN!
FX4Infa
I like your article Nick, this is really question of the hour. I will apply it to my experience. Hopefully I will be able to build my alter-ego as well.
Thx
Nils
Good explanation nick of how to trade. I reconize the things you write in this article. When your a newbie you make mistakes that are explained in this article.
Brandi
thanks Nick! This is just what I needed to read today. I have started learning that I am not the same as me the trader. Two different people. It’s actually kind of fun!
PeterN
Nick what you have described is so no the money. You just seem to have to go through it, a bit like growing up! The best advice you have given for me was 2 weeks ago, SIT ON THE SIDELINES and watch. That was my hardest week of trading.
Cheers
Pete
Sotaribo
Good post. 4psychological pitfalls in forex trading.I take a bow to you.
Thanks.
izzi2
I appreciate your kindness in showing us much
of your trading secret.
Thanks a million, Nick B.
Izzi2
jide
thanx NICK B
i think is not only me that is have make such mistake, i learn that in this biz,you can not make it unless you learn from the mistake you make as a newbie. am just having confident in coming back to trade .so nick you bring back my confident
ralph anderson
I do not know anything about trading this is all new and very difficult for me to understand at this time the reason that i am leaving this comment is that it will also serve as my testimonial, i intend to stick with it and one day i i’ll be able to give a comment l;ike some of the ones i have just read.Thank you Nick for making the information available.
DheroEmpire
Hello Nick, its as if you’ve known or been with me. I am knid of an example of all these. I’m learning more.
Thanks
Guvernor
rofl at the fight club reference.
top stuff nick :D
forexhitman
Thanks Nick for your handy blogs
Just remeber it can be done…Patients and Rules, look below:
19/05/10 14:04 Profit/Loss of Trade EUR/USD 370.00 5,118.78
19/05/10 16:25 Profit/Loss of Trade EUR/USD 220.00 5,338.78
19/05/10 18:08 Profit/Loss of Trade GBP/USD 720.00 6,058.78
19/05/10 20:37 Profit/Loss of Trade EUR/JPY 654.59 6,713.37
20/05/10 11:12 Profit/Loss of Trade GBP/USD 900.00 7,613.37
20/05/10 11:25 Profit/Loss of Trade EUR/JPY 989.66 8,603.03
20/05/10 11:40 Profit/Loss of Trade USD/JPY 440.40 9,043.43
20/05/10 12:00 Profit/Loss of Trade USD/JPY -1,210.65 7,832.78
20/05/10 17:25 Profit/Loss of Trade USD/CHF -991.99 6,840.79
20/05/10 18:54 Profit/Loss of Trade USD/CAD -24.46 6,816.33
20/05/10 19:59 Profit/Loss of Trade EUR/JPY 245.30 7,061.63
20/05/10 20:13 Profit/Loss of Trade EUR/JPY 1,140.36 8,201.99
20/05/10 21:16 Profit/Loss of Trade EUR/JPY 133.92 8,335.91
21/05/10 02:05 Profit/Loss of Trade GBP/USD -1,000.00 7,335.91
21/05/10 04:04 Profit/Loss of Trade EUR/USD 500.00 7,835.91
21/05/10 04:09 Profit/Loss of Trade EUR/USD 220.00 8,055.91
21/05/10 04:10 Profit/Loss of Trade EUR/USD 1,000.00 9,055.91
21/05/10 04:20 Profit/Loss of Trade EUR/USD 2,200.00 11,255.91
21/05/10 07:01 Profit/Loss of Trade USD/JPY 443.20 11,699.11
21/05/10 07:13 Profit/Loss of Trade USD/JPY 110.70 11,809.81
21/05/10 07:40 Profit/Loss of Trade USD/JPY 2,222.22 14,032.03
Ms Impatience
Hi Nick B, I have enjoyed everything I have read or listened to from your site. Its simplistic, its educational, its honest, its real. My first (and only) trading account had a few more 00’s on it than yours and I now know I didn’t deserve to have such a large account as I had no idea of what I was doing. I was just “playing” with someone else’s hard earned bucks. The first month I increased my account by 50%, and boasted till I bust, until someone told me I was trading $50 a pip, not $5 as I had thought (that’s how much i thought i knew !) and within a month all my false sense of security and confidence burst, and I lost the whole lot ! It was as if one day no fear and all successful trades, and the next day all fear and no wins and not putting s/l on didn’t help either ! ( But that was all crap too ) When I saw a trade go the wrong way, I would leave it in over night and hope and pray that when I woke up the next morning it would of turned around and I would of made up some of my losses, but of course it just took more of my money. And even though I knew my account was running out very quickly I did absolutely nothing to change the way I was trading. I have been training and educating myself ever since, in the hope that I too will become a patient and successful trader in the near future. I still wake up every morning with regret and berate myself over my stupid choices. It is one of my goals for this year, to forgive myself for what I did, learn from it and move on. I always read that to become a successful trader you must loose at least a couple of accounts ! Well here’s one trader who wont have to do the same thing twice, at least. I have never told anybody the truth about this before and it feels good, maybe this is my first step in my goal of forgiving myself…. to be honest with myself as a trader and be real in my profits. Good luck everyone, I sure hope that you read this and learn from it. X
Derek Lim
No doubt patience and no fear are really important traits of a successful trader.