Pro Trader Opens Up To The Tough But Important Teachings That Got Him To The Top
When I first entered the ‘jungle’ that is Forex trading, I had this dream of becoming a full-time trader within 6 to 12 months, allow my account compound each and every month until such time I was so well off, I would never have to work again in my life.
Arrogance? Wishful thinking? Delusions of grandeur?
Absolutely!!!
Guilty as charged!!!
The thing is, I was one of these typical ‘wet-behind the ears’, naïve upstarts who believed all the hype from the so-called gurus that trading was a snip and the gateway to unlimited riches.
Cut a long story short, my plan failed in pretty dramatic fashion, hitting both my pocket and my confidence.
Over this period I learned some pretty tough lessons and experienced the harsh reality of Forex trading as a beginner.
However, despite me now being in my 2nd full year as an avid Forex trading student, I am still only a short way into my trading journey and have so much more still to learn.
Being a beginner trader trying to navigate this game can be daunting to say the least.
Therefore rather than me trying to enlighten you based on my learnings and experience I feel you’d be much better served hearing from someone who’s had skin in the game for a lot, lot longer.
In fact 18+ years to be exact…
Top Trading Lessons From 18 Years “In The Trenches”
Recognised by many as ‘The Authority’ on price action trading, Nial Fuller is one of the most widely followed trading coaches in the world.
Moreover in 2016 he won the Inagural Million Dollar Trader Competition, achieving an impressive 369% return in just 3 months.
So it’s fair to say Nial is not only an ‘Authority in name but an Authority in nature.
So without further ado, here are Nial’s most important lessons he’s learned during his 18+ years trading career.
#1- Preserve Your Trading Capital
Beginner traders approach trading with the completely wrong mindset. Their primary goal is almost always to make money as fast as possible, rather than trying to protect their money as much as possible.
As one of the greatest investors Warren Buffet says,
“Rule No1, Never lose money”. Rule No2, never forget Rule No1”
This requires serious mental fortitude however.
It’s very common for a beginner trader to initially follow their trading plan, hit a streak of winning trades and get caught up in the euphoria of how easy it is to make money from the markets.
They gradually become arrogant, cocky and over confident and very soon blow up their whole account.
To achieve long term consistent trading success it’s important to be defensive in your approach with the markets.
Preserving your risk capital will allow you sufficient ‘ammo’ (money) in your ‘gun’ to go after ‘high probability’ set ups rather taking a punt on those ‘on-the-fence’ signals that never quite meet your criteria.
#2- Be a ‘Set & Forget’ Trader
It’s often the case the more we meddle, fiddle and interfere something in our lives the worse it sometimes gets. This is also true when it comes to trading.
By constantly watching the charts and monitoring your trades you’re lot more likely to close out your trades too soon, add to positions and some other things you wouldn’t normally do.
This is one of the biggest and most common mistakes that causes traders to lose money.
The easiest and best way to overcome this is to ‘Set & Forget’. Just simply follow your trading plan and let your trading edge play out uninterrupted.
#3- The Outcome of Your Last Trade Has Zero Bearing On Your Next
Never ever let your last trade influence your decisions on the next.
No two trades/signals are exactly the same.
The pattern of winners and losers of every single trading strategy/edge is random. If you took a 100 trades with 50 winners and 50 losers, how those winners and losers are distributed is totally random.
You could have 5 losses in a row followed by 10 winners and then 10 losses, followed up with 5 winners.
The big test is how are going to deal with such a random distribution of wins and losses?
Most people find it impossible not to view this negatively and ultimately fail.
In order to succeed as a trader, you must never lose sight of the bigger picture, and stick to your plan and process for long term success.
#4 Less Is Very Much More.
Yes its true…lots of traders fail at this game because they try to do too much.
Too much research, too much analysis, too much chart watching, too much trading, too much over-thinking!!!
Very often, doing nothing is the most profitable think you can do as trader.
Here’s an important point to remember…
In any given week or month, the markets do not provide many good trading signals.
Why’s that you ask?
Simply because most of the market price action is random, meaningless noise.
So your mission is to follow your plan and strategy to the tee, filter out the good
Trade set ups from the bad and don’t deviate.
Once you begin to master this discipline you will soon realise that good set-ups that are worth risking your money on happen quite infrequently. But the upside is, that you don’t need to make lots of trades to make big profits in the markets.
#5- Always Know Your Exit Before You Pull the Trigger
Believe it or not, exiting the trade is so much harder than entering.
This lesson took Nial multiple years to grasp and in his opinion one of the most critical components of the trading process.
The exit process within a trade is where most traders really mess up.
To become profitable it’s vital to emotionally remove yourself from the whole trade exit process.
Emotions play havoc with traders when deciding to exit from the trade, typically resulting in either them making a small profit or a big loss.
Exiting trades when in the moment and at your own discretion very rarely ends well for most people.
Therefore the only-fool proof way of exiting trades at the right times are to have strict profit-taking plan that you religiously follow.
Well that’s it for this issue.
But before, do some or all of Nial’s lessons above resonate with you and your trading? If so I’d love to hear from you.
By the way, Nial has a further 5 trading lessons that he’s learned along the way that I would love to share with you in my next e-bulletin.
