Congratulations! You Made It!
You made it!
You’ve read all six gazillion pages of the School of Pipsology and now you have everything you need to conquer the forex world, retire in a year or two, and then go travel the world in your Gulfstream jet, right?
Think again noob!
Sorry to burst your bubble, but you have just barely scratched the surface.
We’re not going to sugarcoat things. We told you early on that it was going to be difficult.
If you’re a noob and just finished the School, you’re most likely going to be horrendously bad at trading.
But that’s okay. Unlike noodles, there’s no such thing as an instant expert currency trader. Anything that’s worth learning well takes time. That’s why instant noodles taste disgusting.
Going straight into the markets and trading a live account would be like trying out for the NBA just right after reading “Basketball for Dummies“.
You’d probably get out-smarted, out-hustled, out-muscled, and out-maneuvered. You just haven’t developed the skills or mental/physical conditioning enough to hang with the pros yet.
It’s the same thing with the forex markets.
The currency world is dynamic and complex. It’s ruled by brainiacs with PhDs and MBAs from Ivy League Schools, who have huge amounts of capital, and all the technological toys money can buy.
When you enter the forex trading world, you have be ready to dive in and wrestle with the biggest sharks. And they love feasting on noobs.
Are you scared now?
We just did that to make sure you understand that even though you’ve got to have fun in everything you do, forex trading is serious business and you have to approach it that way.
With all that said, anyone with the passion and commitment to learn this business has the chance to get their small piece of a very, very big pie and then some.
Yes, you can make it, but before beginning your forex trading adventure, here are a few lessons we’ve learned that we’d like to share to help you get started on the right path.
Focus on the Process. Not on the Profits.
We’ve made the School of Pipsology as easy and fun as we could to help you learn and understand the basic tools and good practices used by forex traders all over the world, but remember that a tool and technique is only as good as its handler.
A painting does not become a beautiful masterpiece by the brush alone. It’s the vision and skillful hand of a painter that creates a work of art.
A football doesn’t find its way to the end zone by itself. It is the quarterback’s ability to read a defense, position his players accordingly, and send the football to the right spot at the right time.
It’s your ability to read the market, execute the correct strategy for that particular situation, and consistently apply proper risk management techniques that hopefully gets you more profitable wins than losses in the long run.
Like in art, sports, or any performance endeavor, forex trading is a multi-faceted skill. The tools alone won’t make you successful.
A dedicated effort towards education and application of what you learn, as well as the constant review of your performance is the only path to success.
In the beginning, that process of learning and deliberate practice should be your main focus, NOT the profits.
Continuing with the basketball analogy, if your goal was to reach the NBA, would you get to the level of performance you desired by playing games only?
Or would you develop faster by focusing on physical conditioning, developing different skills (a jumpshot, dribbling, footwork, passing, etc.) in practice, as well as playing games?
Probably the latter right?
If you went straight to the NBA without any training, do you think you’ll score many points or win games?
Nope. We didn’t think so.
Learn the market. Learn forex trading techniques and high probability setups/systems.
Learn how to manage risk with proper position sizing and stop losses to limit risk and maximize reward.
Learn how to put it all together in DEMO.
Over time, this process will lead you to a forex trading method or system that works for YOU and that’s when your winning trades begin to outweigh your losing trades.
There’s No Holy Grail!
Ask any quant on Wall Street (the super geeky math and physics PhDs who create complex algorithmic trading strategies) why there is no “holy grail” indicator, method, or system to pull profits 100% of the time. He or she will give you these two reasons:
1. You can’t predict the future.
Is there anyway to know what a central bank president will say during a speech? Or maybe what a super famous investor or hedge fund manager says during a random TV interview?
Do you know when the next terrorist attack will hit and cause risk aversion?
How about a natural disaster like an earthquake or tsunami?
The list of unforeseen market moving catalysts is infinite and when they happen, they can rock the markets and your forex trading system.
Understand that this is part of trading and the best you can do is be prepared to limit your losses if they occur.
Be ready to have your world rocked. And we don’t mean that in the way you think it means.
2. Data doesn’t move the market. Humans do.
There will be times when data or market themes do not mesh with price action.
Why is that?
Maybe the outcome was priced in ahead of time? Maybe forex traders weren’t focused on the data that was released? Maybe there was an institution covering a huge position that was on the wrong side of the market?
Would all players in the market react to an unforeseen catalyst the same way?
Whatever the price behavior may be, the decisions that lead an forex trader to take action aren’t always logical or congruent to the information out there.
When you multiply this by the millions of players with different goals/strategies and different sized trading accounts, it becomes impossible to tell where the overall market will go every single time.
You can’t quantify or calculate human behavior and unknown future events into an elegant mathematical equation to completely get rid of risk.
There will always be some level of uncertainty and there will be times when you will be on the wrong side of a currency market move.
Actually….there will be MANY times when you will be on the wrong side of a currency market move.
Perfectionists should probably stay away.
For those of you who always feel the need to be correct, we must warn you now…
Nobody can perfectly predict the market every single time.
All hope is not lost though if you decide to stubbornly not listen and continue your search for the Holy Grail.
Rumor has it that if you can find a pink unicorn standing under a rainbow, you will come across an invisible leprechaun who will give you the Holy Grail. And the iPhone 6! Good luck.
Be Patient. Stay Disciplined.
It’s a virtue…Especially with forex trading.
Arnold H. Glasgow, an American humorist, once said, “The key to everything is patience. You get the chicken by hatching the egg, not by smashing it.”
Developing your currency trading plan will take time. Developing skills will take time.
Waiting for the right trade opportunities requires patience. Entering and exiting a trade at the right moment requires patience.
Discipline is also a virtue, and it means doing the things you need to do to progress and get better….even if you don’t want do it.
This means preparing for each forex trading day or week with research and chart study.
If you’re a mechanical or automated trader, this means back testing systems and constantly trying different settings and strategies as the environment changes.
And of course, don’t forget about keeping a trade journal and reviewing every single day you trade.
Journaling is the one trading task that separates the wannabe traders from the real deal traders. Unfortunately, most newbies won’t do it.
Forex trading concepts and techniques are simple and easy to learn. What’s hard to learn is how to be patient and disciplined to do the right things and make good trading decisions. Truthfully, it will be one of the most difficult endeavors you will ever take on.
To a newbie, sitting on the sidelines and watching the markets move while you wait for your best setups means you’re missing out on profits.
This way of thinking leads to a failure of patience and discipline and causes some of the most notorious trading mistakes in the book:
- Impulse trades
- Letting losers run too long
- Cutting winners too quickly
- Revenge trades
These actions will kill your account!
Remember that your job as a newbie is to learn how to make good trading decisions and SURVIVE!
The best thing you can do to stay patient and disciplined is to look at your career as a trader as a marathon and NOT a sprint.
This is not an overnight, get-rich-quick scheme.
This is a commitment to build skills that will allow you to profitably trade in any environment the market will throw at you at any time.
And essentially, free you from the chains of the “Man.” Fight the Power!!
If you stay patient, maintain discipline, and commit to constant improvement, then your results today as a forex noob will probably be nothing compared to the results of the trader you will become after years grinding it out in the markets.
Always remember that opportunities for good trades occur ALMOST EVERY SINGLE DAY!
No need to rush into bad currency trades. They will only set you back from reaching your goals.
Stick to your best ideas and setups, and if they don’t come that session, just wait for the next.
Unless the world stops trading currencies (knock on wood) then there will always be opportunities around the corner.
Love The Forex Game
Tiger Woods wins golf tournaments for a living. He has won 14 major golf tournaments and 79 PGA tour events – more than any active golfer. He practiced religiously every day for 15 years before winning his first pro event at the tender age of 18.
The obvious commonality between these champions is that not only do they work their butts off, but they also love with they do. They love the challenge and the competition.
Their passion for the game is so strong that it gets them through the hours upon countless hours of tedious tasks that others may not enjoy like tape watching, suicide drills, weight training, putting drills, etc.
To them, these things are fun!
Again, we’re not gonna sugar coat things. You’re all big boys and big girls.
There will be days when trading SUCKS!
It will get to the point where you think “Gosh darnit! &#$(*&!! I wanna quit now.”
There will be days when you will be totally clueless. You won’t understand why the market is not moving with the news or why your mechanical system is getting chopped up.
There will be days when you will feel extremely lazy. You won’t feel like journaling. You won’t feel like reviewing your trades.
Trust us, you will experience a lot of these days. Especially in the beginning.
On days like these, it’s the “love of the game” that will keep you doing the things you need to do to become a good trader.
To become a good forex trader, it doesn’t take a genius IQ, an Ivy League pedigree, or the need to have three arms and three eyes.
It will take hours, LOTS of hours of market study, chart time, and deliberate practice to trade well. If you embrace the challenges of trading the currency market and have fun picking it apart, your chances of surviving and thriving will be improved immensely!
Okay, that’s it. Thanks for listening and completing the School of Pipsology.
We really appreciate that you decided to begin your forex trading journey with us.
Once you’re all set up and ready to trade, it’s up to you from then on out.
Grind it out.
Never quit improving every day and you could change your life for the better.
Good luck and good trading!