Before we go to today’s article, let me share with you what happened to me in the last few days…
I caught an stomach infection! Who knows where I got it from…
But it was a really bad one, I spent 3 days on bed! fever, throwing up, head ache, stomach ache and many other aches… hehehehe
Long story short, not the best 3 days of my life…
Now I’m back to normal (dont worry :-) )… feeling great, ready to trade, so on and so forth…
But what I really wanted to share with you is something that kept me motivated during my sickness…
I knew that at some point I was going to get well, I didn’t know if the next day or two I was going to be ok… but that image motivated me to do what ever was in my hands to get well… (like taking my pills on time, eating what my doc recommended, etc)…
And it really worked, even with that headache, etc when I pictured myself doing something being “well” made me stronger…
And it occurred to me… What if you could do the same thing with your trading?
For instance, lets say you are trading who is still struggling to get consistent results… close your eyes, picture yourself doing something you will be able to do when you achieve consistency (i.e. spending quality time with your family, etc).
I’m pretty sure that, it is going to help you do what it is necessary (in your hands) to get there…
What do you think? You think it would help?
Ok, enough blah blah, lets get to todays article, which you will be able to relate to the above story…
I know why you are losing money
Yep, that’s right trader.
I’m sorry to tell you that if you are losing money, its because you don’t have an edge.
And let me tell you something, if you are trading without an edge, it would be just tike gambling.
According to wikipedia:
Gambling is the wagering of money or something of material value on an event with an uncertain outcome with the primary intent of winning additional money and/or material goods.
So if you have been trading like this all this time, you have not been trading at all, you have been actually gambling.
I’m sorry again, that it has to be me who is telling you this, but its the truth.
Think about it, in the last month, how many times you have traded a currency pair without really knowing what the market was likely to do?
One? five? twenty? It doesn’t matter how many times, what is important is that when you trade without an edge you are actually gambling.
Maybe you like to gamble? If that’s the reason you are trading without an edge, then you are better off going to a casino a lose your money there, at least you’ll have more fun (and get some “free” drinks).
Believe me, there are no traders making consistent profits without an edge.
Ok so you see know where I’m getting at don’t you?
So, if I’m not making money because I don’t have an edge, well, let’s get an edge!
That’s exactly the way smart traders think.
Ok, now… How do you get an edge?
An edge is not an indicator or a trigger signal or something “individual”.
The way I see it, an edge is a complete set of rules that really put the probabilities on your favor.
You get an edge when:
- You know when to stay in the market as well as when to stay out from it – Long term analysis (very important)
- When to get in and out of the market in the short term charts (always in the direction of the market condition)
- You know how to manage your trades, get out of trades soon when the market moves against you and hold your trades when the market moves on your favor, etc.
- You follow strict money management techniques i.e. risk 1% of your capital on each trade (no more)
- You have practiced and demoed your system for a while before gong live (you need that confidence first in order to be able to follow it with discipline)
- Thanks to Craig – Physical Exercise to keep that mental sharpness.
What other things would you add here?
Comment and I’ll keep adding them here…
Please comment bellow
One final thought… It’s always a good time to appreciate when things go well… But we all seem to remember that when things aren’t going well… we need to change that.