In this episode of Truth About FX, Walter dives into having the right mindset and a clear trading game plan. He talks about how to use key indicators for those who identify themselves as price action traders.
And did you also know that getting yourself bored can help you make better trading decisions? Find out more on this in this episode…
Download (Duration: 03:57 / 4.52 MB)
In This Episode:
00:35 – clear game plan
01:24 – wrong thinking
02:09 – bloody boring
03:05 – light bulb
Announcer: Sometimes, forex trading is a wild and wooly place to be. That’s why Hugh is here, to post your questions to Walter, the naked forex guy. Hugh’s got questions and Walter’s got the answers. Here at the Truth About FX Podcast.
Hugh: Hi, Walter. This person asks, they aren’t having enough clarity when they open the market. They have acquired a fair amount of knowledge in terms of trading but it seems like they do not have a clear game plan.
I know that sounds familiar to a lot of people. They are price action trader who uses some key indicators. What advice would you have for them?
Walter: What this means is you haven’t fallen in love with approach. It sounds like this trader is interested in trading price action but does not necessarily have… Basically, here’s the difference between — and I hate to make it so simple but this is really the difference — someone who is a professional and approaches it as a job and somebody who is in a different mindset, maybe in the get-rich-quick or whatever mindset.
So, if you sit down on the chart — here is the test — if you sit down on the charts and you look at the charts and you think to yourself, “Self, I need to figure out which way the market is going so I can trade it.” That’s the wrong thing to think.
What you needed to do is when you sit down at your charts, you need to say, “Self, is the market offering me an opportunity to trade given the parameters of my system?” And, in most cases, that’s going to be no.
Sometimes, it is going to be yes for a different system or whatever. If you are trading 5 different systems, maybe 1, 2, 3 don’t offer a trade but 4 and 5 do, or something like that. The point is when people sit down at the charts and they think, “Okay, I need to figure out if the GBP/JPY is going up or down today because I need to take a trade”. That is not the way you need to approach it.
What you need to do is sit down on your charts and say, “Okay, what is my system saying? Does it say buy, sell or no trade?” That is really the goal. To get to that point where it’s so bloody boring that when you sit down in front of your charts, all you’re really thinking of is what is my system is saying? What does it say? Does it say buy or sell? Or, it says stay out.
That is the key thing here so I would suggest to this person that you probably want to take a look at the systems that you are using, if you are, and really fine tune your focus. What you focus on, you get more of.
If you can really focus on the system and get good at it, you’re going to get more of that. That is one of the keys in life, really is. Focusing on something equals more of that, that one thing whatever that is. Just focus on that and when I say that, I mean not focusing on something that you don’t want.
Focus on what you want. If you really want to be good at this trading thing, focus on a system and do everything that you can to become an expert at that system. That way, when you sit down with your charts and you are thinking, “Alright, what is my system saying right now?”
That is really going to be the… That’s when the light bulb goes on for most traders. Does that help?
Hugh: Yeah, definitely. I struggled with that for years. Just jumping from system to system and not, like you said, trying to invent stuff that really isn’t there. Thanks a lot, Walter. I really appreciate it.
Walter: No problem. That’s something I think we all go through, Hugh. It’s one of those things. In the beginning, it’s like, “I’m a trader, I’ve got to trade. I’ve got to do something.” And then, later on, it’ll only becomes like you’re executor of a system.
In the beginning, you’re a trader, you’ve got to trade, you’ve got to make money. You’ve got to make up for the losses from yesterday or whatever. But, in the end, it sort of gets to the point where you’re really just, “I do not want to say a robot.” But in some ways, you are like that robot that is executing the system over and over again.
Hugh: Okay, cool. Thanks.
Walter: Thanks, Hugh.