If you haven’t taken advantage of FXCM’s free forex videos, especially Rob Booker’s presentation then make use of them while they are still available and free.
I particularly enjoyed Rob’s seminar, and I want emphasise one particular point of his presentation: focus.
Having being a trader for 8 years I’ve pretty much done it all. I’ve had the “privilege” of wiping out a couple of accounts, reading a gazillion trading books, attending hundreds of seminars, purchasing hundreds of systems and subscribing to hundreds of signal vendors. I suppose if I added up the amount of time and money spent it would easily be in the hundreds of thousands of dollars.
But at what point did I begin becoming consistently profitable?
When I traded a system I created from my own observations.
My profitability increased further when I acquired a skill that allowed me to back-test my observations through programming, and increased yet again when I tweaked the system I had chosen to trade.
This is at the heart of becoming successful as a trader.
I remember the days when I would create a system, back-test it, like its results, trade it, encounter a string of losses (like maybe 2 in a row), panic, and then throw the system away.
How stupid can you be?
Everything my mind had logged, trading that system, had now been erased. If the system was breaking down I could’ve gone back to the drawing board and thought about what common characteristics were prominent on trades that were losers, and this is when the penny dropped.
I stopped chasing the elusive holy grail and simply concentrated on what I liked using and what worked for me.
I then audited my trades on a consistent basis knowing the markets are always changing, and the precious experience my mind had acquired watching charts I could crystallise into an improved method for extracting profits out of the market.
After watching Rob’s presentation I began to realise that the real element of my success was the focus I put in on that ONE system. Without that focus I would’ve continued chasing my tail using a new system every month.
If that’s you, come in close, real close I need to tell you something very important:
Rob puts it best:
“If we were to lock you in a room for six months and gave you historical data on ONE currency on ONE time frame with ONE indicator could you develop a PROFITABLE system?”
If you’re not profitable trading the forex market then why aren’t you doing that?
It’s because you don’t have focus. You are too easily distracted.
Is one loss enough for you to give up on a system? How about 2 losses? 3?
Grab your favourite currency, plot it on your favourite time frame, use your favourite indicator and then stay focused on creating your system.
This is what Jack Schwager’s FXCM presentation should have impressed upon you: there’s no ONE way of extracting profits out of the markets.
I know profitable forex traders who use only a MACD (or the Macdizzle as Rob put it!), traders who trade announcements (such as Felix), traders who trade bank opens, carry traders, CCI trades (such as Woodie), and the list goes on, but what they did was stop, look at what they knew, traded what they liked and persisted.
So perhaps today is the day when you’ll stop looking around for the magical formula and instead focus on you.
- What currency pair do you like?
Ok, then close the rest down.
- What time frame works best for you?
Ok, then just select that time frame.
- What indicator or chart set up do you like?
Ok, then put that on there.
Watch the market. Formulate a trading plan and trade according to your plan.
After a month, review your methodology. Don’t change it mid-month, just trade it as you’ve told yourself to trade. Stay focused. You might have a bad day or week, but keep at it.
Write notes on each trade, how you feel, what could be improved, and then at the review date tweak your system.
Then start the next month with the new tweaked system and trade it exactly as is for the next month.
Rinse and repeat.
It’s not hocus pocus – it’s just focus.
You can do it.