FXstreet.com: Education: Market Psychology
FXstreet.com: Education: Market Psychology. Useful resoruces to acquire the psychological skills needed to trade successfully in the currencies market.

Tracy was still angry with her husband even though the argument happened last night. She thought that since she "slept" on it that things would look a little differently today...they didn't. She and Bob had a good relationship, but sometimes "he could be so stubborn," she thought to herself. In fact, her anger had caused her to forgo a very important part of her pre-market preparation. She traded the YM E-mini and her daily routine included identifying yesterday's high, low, open and close

FXstreet.com: Education: Market Psychology
FXstreet.com: Education: Market Psychology. Useful resoruces to acquire the psychological skills needed to trade successfully in the currencies market.

There’s one thing that few people will dispute: We’re all imperfect and therefore make mistakes and do things we come to regret. Hello: I was away from the markets recently due to some transient technical problems. I nevertheless received phone calls from those who found the markets difficult. So I decided to write this small essay to encourage those who are facing tough times on the markets. According to Paul Liburd, trading isn’t a win-win situation. Be prepared to lose on some trades as

FXstreet.com: Education: Market Psychology
FXstreet.com: Education: Market Psychology. Useful resoruces to acquire the psychological skills needed to trade successfully in the currencies market.

I love to read and I love to write. Lately, I have been toying with a few different ideas for a novel and am bouncing between the protagonists in each in my head to decide which one I’d rather spend all that time with. That idea got me thinking about life. First my life…then my family’s and friends’…then, believe it or not, yours. Fictional protagonists go through a lot. They persevere, they overcome, they learn and they grow. A good protagonist is also imperfect. They make mistakes, they lose

FXstreet.com: Education: Market Psychology
FXstreet.com: Education: Market Psychology. Useful resoruces to acquire the psychological skills needed to trade successfully in the currencies market.

Max had had enough and in the words of the movie "Network," he was "...mad as hell and he wasn't going to take it anymore!" Max had taken several Futures classes from some very good instructors. He had a trade plan, and he had been told that it was fairly comprehensive. He knew the importance of having a set of rules, heck, he had a whole list; good rules, too, he thought. He had learned the importance of money management and risk management; in fact, he had in his plan that he would only risk

FXstreet.com: Education: Market Psychology
FXstreet.com: Education: Market Psychology. Useful resoruces to acquire the psychological skills needed to trade successfully in the currencies market.

I came across this article a while back in Forbes, “The Power of Personal Passion.� It is a list of lessons for the Entrepreneur. In short, 1) Do Something You Love, 2) Don’t be Afraid to Show it, 3) Hire for Passion and Curiosity and 4) The Power of Story (namely yours). It’s a good article and I agree with the general premise. It got me thinking about how that same entrepreneurial passion applies to trading Foreign Exchange and while there are some nuanced difference the basic idea still

FXstreet.com: Education: Market Psychology
FXstreet.com: Education: Market Psychology. Useful resoruces to acquire the psychological skills needed to trade successfully in the currencies market.

Susan felt a gasp come out of her as she looked at the plunging price action. It was the NQ E-mini and the line of red looked like blood running down the wall of a slaughter house. But she would not be moved. You see, her trading plan, which she had created from her analysis, indicated that rather than sell in this situation, she must wait, patiently...to buy. She had identified a significant demand level that had formed on the hourly chart and that coincided with a daily chart level; and the

FXstreet.com: Education: Market Psychology
FXstreet.com: Education: Market Psychology. Useful resoruces to acquire the psychological skills needed to trade successfully in the currencies market.

I spend a lot of time talking to you about all the things you can do to plan a trade, execute the plan, record the experience and review your results. I spend a lot of time writing about the fundamentals that matter to me and my view of the global marketplace. I spend even more time, directly with students, discussing belief systems, patterns of behavior and working oneself into a viable trading system. I imagine that you do something similar with your work day. In between all of that stuff,

FXstreet.com: Education: Market Psychology
FXstreet.com: Education: Market Psychology. Useful resoruces to acquire the psychological skills needed to trade successfully in the currencies market.

Derek's eyes got wide as he looked pensively at the charts displayed in his trading platform. He had entered a counter-trend trade on the ES and it was not working out as hoped (his first mistake – hoping is not for trading). He had his trading plan well in tow and the analysis that it was based on did not actually come from him, but from an opinion piece in Bloomberg that said that markets were going to go up, even though the price action told a different story. After he heard that "bit" of

FXstreet.com: Education: Market Psychology
FXstreet.com: Education: Market Psychology. Useful resoruces to acquire the psychological skills needed to trade successfully in the currencies market.

Last week I wrote a piece called “ Intuition and Trading � where I talked about how to identify when our intuition is really working for us or against us. I also discussed how that intuition is formed over time and with experience. That little article sparked some good, healthy debate with some of you. I’m so pleased it did because it has been my experience that discussing these broader issues is what creates the opportunity for us to really delve into our own insights and beliefs. When a

FXstreet.com: Education: Market Psychology
FXstreet.com: Education: Market Psychology. Useful resoruces to acquire the psychological skills needed to trade successfully in the currencies market.

Dan shook his head as he checked again. No matter how many times he looked, he still saw the same numbers and what it boiled down to is that he had lost again. A small voice inside kept telling him that this loss, along with the many others, meant that he had failed, that he must not be smart enough or else he wouldn't lose so much and that the market is out to get him. He felt like a loser and a failure even though deep down a part of him knew that this was not true; but it didn't matter, he

FXstreet.com: Education: Market Psychology
FXstreet.com: Education: Market Psychology. Useful resoruces to acquire the psychological skills needed to trade successfully in the currencies market.

I got an email from a student this week asking about using intuition in trading. He gave an example where using intuition worked in his favor (by keeping him out of trade that signaled then lost), but then wondered if that is really a good idea. One of the reasons I recommend SO much backtesting is because of the intrinsic learning that goes on while one is testing. (Stay with me here…it is relevant, I promise). Intrinsic learning is the deeper level learning that happens without our even

FXstreet.com: Education: Market Psychology
FXstreet.com: Education: Market Psychology. Useful resoruces to acquire the psychological skills needed to trade successfully in the currencies market.

“You can’t change what you can’t face and you can’t face what you don’t know.� --- Dr. Woody Johnson Hello: Whether I win or lose a trade, trading is my profession and it’s what I like to do. Great people have always faced challenges and failures – yet they become great. The past failures and challenges on the markets are never a deterrent to me. Markets wizards today were novices in the past. The road to success is bumpy indeed. Nevertheless, the resplendent reward of consistent success makes

FXstreet.com: Education: Market Psychology
FXstreet.com: Education: Market Psychology. Useful resoruces to acquire the psychological skills needed to trade successfully in the currencies market.

Carla leveled a deep sigh as she looked away from her screen. Actually, it was more like a moan; a moan that belied the pain of having violated another rule that she promised herself she wouldn't. When she looked back around, there it was, still, an option trade that she had exited prematurely against her plan after becoming gripped by fear. It was a bull put credit spread that had gapped down causing her to panic. Of course, as is often the case, the price action retraced and filled the gap

FXstreet.com: Education: Market Psychology
FXstreet.com: Education: Market Psychology. Useful resoruces to acquire the psychological skills needed to trade successfully in the currencies market.

His sleep-filled eyes could barely focus on the chart staring back at him from the computer screen. He felt sluggish, his mind foggy, and his movements slow, but what was quite clear is that he had lost again. Oscar's anger began to rise through the fog as he asked the question, which fell like a dead weight on the silence around him; "...Why do I always lose in the morning? It's like the markets know that I'm coming, and they just wait till I enter, then go the other way." His day had begun

FXstreet.com: Education: Market Psychology
FXstreet.com: Education: Market Psychology. Useful resoruces to acquire the psychological skills needed to trade successfully in the currencies market.

Last week I talked about the importance of really understanding what it is you want. I wrote about the importance of nailing down what you want; not just out of your trading, but what you want out of your life. This week I want to make an important distinction that could have easily been missed in last week’s article. I used the word “want� a lot in that article and only near the end did I discuss “choice� but it is really the choice that is the most important. If we spend our time wanting,

FXstreet.com: Education: Market Psychology
FXstreet.com: Education: Market Psychology. Useful resoruces to acquire the psychological skills needed to trade successfully in the currencies market.

Jamie stared at her screen, it was like she had been in a bad dream and had just awakened to find that it was not a dream at all. She couldn't believe it. She had been doing so well...and for weeks now. But there it was in front of her eyes; one of her largest losses ever. In fact, she really couldn't remember when she had lost so much money in a trade. She felt sick to her stomach, her head ached, and she was shaking. It all began so well this morning. She went through her morning routine to

FXstreet.com: Education: Market Psychology
FXstreet.com: Education: Market Psychology. Useful resoruces to acquire the psychological skills needed to trade successfully in the currencies market.

I don’t know if it is an age and stage thing, or what, but I seem to have a lot of similar discussions with the people around me about evaluating where they are in life versus where they want to go. My first question is always, “Well, what do you want?� The response I usually get starts with, “I don’t know…� and is followed up with a laundry list of vague and nebulous possibilities and generally ends with a sigh and resigned admission that they just don’t want to be exactly where they are now.

FXstreet.com: Education: Market Psychology
FXstreet.com: Education: Market Psychology. Useful resoruces to acquire the psychological skills needed to trade successfully in the currencies market.

‘A trend in motion will tend to continue in motion until a major event takes place that would cause it to change its direction. Trends do have greater odds of continuation rather than reversal.� — Mike Baghdady (35-year veteran of the financial markets). Hello: The title of this small article was first popularized by that market legend, Jesse Livermore. Many successful traders are trend followers – following the line of the least resistance. Countertrend strategies can be quite profitable at

FXstreet.com: Education: Market Psychology
FXstreet.com: Education: Market Psychology. Useful resoruces to acquire the psychological skills needed to trade successfully in the currencies market.

Tom was waiting, patiently ... at first. Then as time went by, ... one hour turned into four, and he had not made a trade. His emotional stability turned to instability as his patience withered and anxiety began to creep in. Then, it happened - on the two-minute chart of the ES, a "blast-off" candle appeared. His heart jumped because he had been nursing a long bias, but hadn't seen a setup protocol from his strategy list. Actually, this wasn't on his setup list either, but he became excited

FXstreet.com: Education: Market Psychology
FXstreet.com: Education: Market Psychology. Useful resoruces to acquire the psychological skills needed to trade successfully in the currencies market.

Does this sound familiar? Jack has a high profile leadership position. His job demands that he create a year-end report. Jack is well aware of how much effort and time it takes to competently deliver this report and every year Jack will wait till the last minute, incurring unnecessary stress and mental anguish, not to mention lost sleep to get it in on time. However, due to the sensitive nature of this report, on more than one occasion Jack has missed important data and except for some

FXstreet.com: Education: Market Psychology
FXstreet.com: Education: Market Psychology. Useful resoruces to acquire the psychological skills needed to trade successfully in the currencies market.

I have a somewhat regular conversation with my kids about the difference between pain and suffering. Despite my efforts at applying and reapplying sunscreen, they’ve both gotten burnt on their shoulders once. They’ve scraped knees, stepped on sharp objects, and taken hard hits from the balls they use in their respective sports. They’ve also spent money on items they regret, trusted friends they knew they shouldn’t, and said some things they’ve wished they could take back. In short, they’ve

FXstreet.com: Education: Market Psychology
FXstreet.com: Education: Market Psychology. Useful resoruces to acquire the psychological skills needed to trade successfully in the currencies market.

In last week's article, The Power of Practice, Part I , we looked at the importance of incorporating a TOTE in working towards your goals; that is, using a Test, Operate, Test, Exit approach to training yourself in strategies that are designed to get the results that you want. Using the TOTE process is akin to practicing, but it is more involved and specific in details than just practicing; because you might practice a procedure many times and get good at it, however, if the procedure is not

FXstreet.com: Education: Market Psychology
FXstreet.com: Education: Market Psychology. Useful resoruces to acquire the psychological skills needed to trade successfully in the currencies market.

If you've read Jack Schwager's 'The New Market Wizards,' he finds there are three things the best of the best traders have in common. One of them is they all have an edge in trading. What is meant by having an edge? It means having a unique approach, system or perspective on the market that is tested, clear and unique. They find these edge's and apply them to the markets. Your goal as a trader is to find an edge. The question is which one? In reality, there are many edge's which will work.

FXstreet.com: Education: Market Psychology
FXstreet.com: Education: Market Psychology. Useful resoruces to acquire the psychological skills needed to trade successfully in the currencies market.

About 3 weeks ago, while shopping for workbooks to keep the kids’ skills sharp over the summer break my 6th grade son asked for a printing book. You know, the ones that Kindergartners use to learn their letters. He’s been frustrated with his handwriting and all of his attempts to improve it just haven’t been effective. He’s naturally gifted at thinking outside of the box (his nickname is Loophole) and wanted to test his theory that writing might come easier with his left hand. He was surprised

FXstreet.com: Education: Market Psychology
FXstreet.com: Education: Market Psychology. Useful resoruces to acquire the psychological skills needed to trade successfully in the currencies market.

Mastering anything involves learning, incessant practice, and being willing to fail...a lot. Failure is the secret key to success. That may sound contradictory on the surface; however, true achievers and champions will tell you that before they enjoyed the sweet smell of consistent victory, they tasted the brew of failure. Actually, failure is where the most important lessons are learned, and that is where strength, endurance, perseverance and persistence are built. In other words, you must

FXstreet.com: Education: Market Psychology
FXstreet.com: Education: Market Psychology. Useful resoruces to acquire the psychological skills needed to trade successfully in the currencies market.

Debra looked at the candle on the daily chart. It was yesterday's candle and it was red just like several before it; and it looked good. You see, it represented a pull-back from a high several days ago on the YM E-mini. The high was the latest in several higher highs and higher lows that stretched back a few months representing a strong upward trend. What looked attractive to her was the fact that the price action had bounced off a 10-period and a 15-period exponential moving average several

FXstreet.com: Education: Market Psychology
FXstreet.com: Education: Market Psychology. Useful resoruces to acquire the psychological skills needed to trade successfully in the currencies market.

This article is taken from the YourTradingEdge magazine (MAR/APR 2010 issue) The author, J. Rande Howell has more than 15 years of practice as a Licensed Professional Counselor with a Masters in Counseling. He has worked for many years as a personal development coach teaching individuals how to affect positive change, peak performance, personal growth, and leadership potential. He is the author of three books and maintains both a counselling and personal development practice in Charlotte, NC.

FXstreet.com: Education: Market Psychology
FXstreet.com: Education: Market Psychology. Useful resoruces to acquire the psychological skills needed to trade successfully in the currencies market.

I know a trader, let's call him Leon. He day trades Futures. He has been actively trading for several years. His profits are erratic and undependable, often going dramatically up and down in the same session. When Leon is making money, his confidence soars and he feels like he is a power trader. On the other hand, when he loses money, which is more times than he cares to admit, he feels like a failure, a loser and stupid. For quite some time, Leon has wondered why he can't be consistently

FXstreet.com: Education: Market Psychology
FXstreet.com: Education: Market Psychology. Useful resoruces to acquire the psychological skills needed to trade successfully in the currencies market.

I just got off the phone with a delightful couple, John and Genny. I was asked if I would speak to them briefly because John, the trader of the couple, had been consistently losing money for months and as they were trading with the last of their retirement, it was imperative that they begin to do something differently to begin getting the results that they wanted. After chatting for a while, I asked John why he was trading. In other words, I was asking whether or not he had a "compelling

FXstreet.com: Education: Market Psychology
FXstreet.com: Education: Market Psychology. Useful resoruces to acquire the psychological skills needed to trade successfully in the currencies market.

Bringing your "A" game to your trading platform and ensuring that you are "in the moment, fully available, fully present and in the now" of the trade is crucial to getting the results that you want. You've got to be able to focus with intention and attention to decrease the pain associated with being out-of-control. There is great value in being aligned, centered and grounded in order to optimize all of your system's resources toward seeing reality for what it is, being on the right side of

FXstreet.com: Education: Market Psychology
FXstreet.com: Education: Market Psychology. Useful resoruces to acquire the psychological skills needed to trade successfully in the currencies market.

There was a posting some time back on Seth Godin’s blog called The Reality of Digital Content. Even though the post relates to writing, not trading it made me revisit some of the reasons I decided to trade for a living instead of going out and getting a “real job� as I was advised. One of the biggest reasons was that I recognized the changing face of business, much the same that Seth recognized the changing face of the writing industry. After the kids were old enough to be in school and I had

FXstreet.com: Education: Market Psychology
FXstreet.com: Education: Market Psychology. Useful resoruces to acquire the psychological skills needed to trade successfully in the currencies market.

I know what I need in order to trade well for the week. For my trading style I need: 1) the market to have some kind of bandwagon it is willing to jump onto; that could be in the form of a singular outlook for the upcoming economic news releases that could also be a directional momentum that building up – I don’t even care if it is trend or counter trend, but there had to be a technical setup in price action 2) to be able to plan and manage my trades/ this means I need my ‘business hours’ to

FXstreet.com: Education: Market Psychology
FXstreet.com: Education: Market Psychology. Useful resoruces to acquire the psychological skills needed to trade successfully in the currencies market.

Dr. Judith Rich wrote the article The Power of Conscious Forgetting for the Huffington Post which details the power in being able to forget certain trials or hard knocks on purpose. She talks about the long term effects of reliving painful parts of our lives or, rather, our emotional response to certain events in our lives. She shares examples of how letting go of that emotional response can help you turn the corner in the path toward achieving your goals. I think her intent is spot on. When

FXstreet.com: Education: Market Psychology
FXstreet.com: Education: Market Psychology. Useful resoruces to acquire the psychological skills needed to trade successfully in the currencies market.

We all spend our time with The Angel and The Devil on our shoulders, vacillating between what we should do and what we want to do. Those little imps travel with us everywhere we go. They invade the inner sanctum of our minds at every decision we face in the day. “I really should fix a healthy lunch.� Answered with, “…but I really want something fast today.� “I really should just get my errands done on my way home…but I’m tired and just want to get there.� How about, difficult discussions with

FXstreet.com: Education: Market Psychology
FXstreet.com: Education: Market Psychology. Useful resoruces to acquire the psychological skills needed to trade successfully in the currencies market.

The opening bell just sounded and you are putting on a trade. You've got your plan established...you'll buy the demand level on the 60-minute chart of the NQ E-mini that you analyzed yesterday. The price action on the Globex chart is confirming the plan with an overnight low that coincides with the demand level that you established. You have your entry, target, stop and exit planned. After you enter, you become gripped with anxiety and fear because the price action is inching toward your stop

FXstreet.com: Education: Market Psychology
FXstreet.com: Education: Market Psychology. Useful resoruces to acquire the psychological skills needed to trade successfully in the currencies market.

What are the results you've been getting in your trading and in your life? If they are less than what you want, if they in fact suck, then changes are in order - from the inside out; changes that involve new strategies for thinking, which in turn create emotions that drive behavior, which produce the result. Results, any results, follow a model and that model is sequential. In fact, results are effects and effects all have a cause; so we can call it "The Cause and Effect Model." Now, any

FXstreet.com: Education: Market Psychology
FXstreet.com: Education: Market Psychology. Useful resoruces to acquire the psychological skills needed to trade successfully in the currencies market.

Bringing your "A" Game to your platform and maintaining it during your entire trading session, through preparation as well as execution, is job 1 for your trading in order to get the results that you desire. And, in order to bring your "A" Game, you've got to have and use mental/emotional tools. One of the most powerful tools that you can have in your tool belt to manage emotions and greatly reduce the pain associated with "bone-headed" rule violations that ravage your trading account is

FXstreet.com: Education: Market Psychology
FXstreet.com: Education: Market Psychology. Useful resoruces to acquire the psychological skills needed to trade successfully in the currencies market.

Bringing your "A" Game to your platform and maintaining it during your entire trading session, through preparation as well as execution, is job 1 for your trading in order to get the results that you desire. And, in order to bring your "A" Game, you've got to have and use mental/emotional tools. One of the most powerful tools that you can have in your tool belt to manage emotions and greatly reduce the pain associated with "bone-headed" rule violations that ravage your trading account is

FXstreet.com: Education: Market Psychology
FXstreet.com: Education: Market Psychology. Useful resoruces to acquire the psychological skills needed to trade successfully in the currencies market.

Success in trading requires a number of crucial elements without which failure is all but guaranteed. These essentials begin with market knowledge; you must acquire an understanding of the asset class that you wish to trade. Secondly, you must develop and maintain a trading business plan that outlines firstly your purpose, goals and the strategies you intend to employ; what time frame you intend to trade whether day trading, swing or longer term; the number of trades you plan to execute in one

FXstreet.com: Education: Market Psychology
FXstreet.com: Education: Market Psychology. Useful resoruces to acquire the psychological skills needed to trade successfully in the currencies market.

Consistently successful traders are continually concerned about whether or not their analysis is correct; that is, if they are seeing things as they are. They have a healthy respect for the fact that the nature of the markets is change, and that even when cyclical data is in the charts, the markets are still subject to fluctuations and volatility. Due to the nature of the markets, it is important to discover distortions in your judgment and distractions to your thinking in order to resonate