Hello Traders!  In our trading psychology series so far we have addressed the issues of internal control and also trading state management.  As experienced traders know, an inevitable and necessary aspect of trading is dealing with losses.  Obviously, our internal control and trading state are affected by losses and how we perceive them.

Failure is a good teacher only to those who possess the positive attitude that will allow them to learn the valuable lessons from their mistakes.

Despite advances in trading systems, access to more information, more powerful and faster computers, and more indicators in charting and analysis packages, the percentage of traders who are losing money is the same as it was 15 years ago–a shocking 90%!

Why is this?  The answer lies in the fact that we human beings still respond to fear and greed the same way!  Despite this fact, YOU can decide to do what others have decided not to do.

Discipline yourself in both the creation and the execution of a solid trading plan! We already know with a very high degree of certainty what happens to those who don’t!

As the saying goes, if you continue to do what you have always done you will get what you have always gotten!

So then the real question becomes simply ‘ARE YOU HAPPY with your current trading‘?

If you answered anything other than a resounding YES, then STOP TRADING IMMEDIATELY, AND GET SOME help, advice and direction from someone that has helped others do it!

The 4x Authority offers help to those who need it in the form of “The Forex Model” software.

This impeccable, proven Forex trading software comes with TWO months of live support and a membership website complete with loads of support and tools.  Traders receive a 120+ page manual, video instruction, live technical support, and instruction in trading psychology, backtesting, forward testing, and money management.

This is a COMPLETE package for an unbeatable price, designed to get you started trading the Forex, PROFITABLY!  We have many traders in the live support room trading everyday and they are very happy with the software and the support.

FYI:  the software has been actively traded for over 4 years !  This is the mark of software that is here to stay and is not some optimized “special of the month” kind of Forex software that is all too common out there.

Visit our website http://www.4xauthority.com, check out the latest “overall” performance tables and change your trading results today by purchasing the software.
To your success!

Alexander Lamm

4xAuthority.com

What is Trading State Management and why is it important?

In the last post we talked about the importance of internal control. Having internal control will determine your success at state management, which is essential to thriving at trading.

What do we mean by Trading State Management?

As you probably know from your own experience, recent trading events can affect your trading state. Your trading state refers to your psychological and emotional framework and your physiological state.

After a losing trade do you find that you are slumped down in your chair?  Is your breathing shallow?  Is your internal dialogue defeating and negative instead of positive and supporting?

I know I have certainly been there, and from my own experience I know that the emotional impact of trading losses can make it harder to execute entries, and cause traders to break exit and stop-placement rules.

Why is this? Your internal dialogue—the self-talk that goes on in your mind—and your internal belief systems about money and trading will directly affect your outward physiology. If an outside event such as a trading loss unconsciously triggers some negative self-talk or beliefs, you will go into a state of alarm or stress. In this state your hind brain, the part of you that is focused on survival, will react with the body physiology of fight, flight, or freeze. You then lose some or all of your access to the rational decision-making abilities of your frontal lobe. Obviously, this directly affects your decisions regarding the next trade setup and thus your ability to execute your Trading Plan.

What I’ve realized through experience and research is that our bodies will give us all the signals we need to know that we are going into a state of stress—and, in order to continue to trade our plan and therefore trade successfully, we need to stop and manage our state right away. Some of the body signals could be: heart beating quickly, shallow, quick breathing, loss of energy, or feeling spaced out.

The swing of emotions can go from euphoric highs to “I’m never going to trade again” in the course of one 3-minute bar. This is just part of the business.

Knowing this puts you ahead of the game. When you are aware of something you can address it and make the appropriate and necessary changes to affect positive change. Making your negative thoughts conscious so that you can become aware of your belief systems and begin to change them will certainly be important to your trading success, so that the lows (or highs!) don’t impact your ability to follow your rules.

Jack Schwager, author of Market Wizards and New Market Wizards, concluded after interviewing some of the world’s top traders that the most important factor in their success was that they each had a trading system that was right for them.

When you have a trading system that is right for you, you will find that it is easier to follow your trading plan even when your trading state is compromised. With discretionary trading plans it is easier to be inconsistent when your physiology is showing signs of stress. However, with our forex trading software, what could be easier than “see dot, trade dot?”

If you are interested in a straightforward, mechanical trading system which makes you more consistent in your trading, no matter what your state, check out the FOREX Model software at www.4xauthority.com

To your success!

Alexander Lamm
4xAuthority.com

Almost every successful trader has realized that success in the markets comes from INTERNAL CONTROL.

This is radical news for most people.  Internal control is not necessarily that difficult to achieve.  However, the challenging part for most people is to realize just how important it is, so that they do what is necessary to achieve it.

The reason why most traders do not succeed is that they do not realize that investment success requires internal control more than any other factor. This realization is the first step toward trading success. People who dedicate themselves to developing internal control are the ones who will ultimately succeed.

Let’s explore internal control from another perspective. Basically, there are three areas, all of which are key to successfully trading the markets:

• Psychology
• Money management / Position Sizing
• Trading Strategy Development

Many newbie traders emphasize system development and de-emphasize the other two topics.  They think that the more that they know about the technical indicators the more effectively they will apply them. Most follow in this frustrating, fruitless direction for years, moving from system to system and guru to guru, only to finally realize that their lack of internal control is what keeps leading them back down the same losing path.

If they are lucky, smart, or find the right teacher, traders who eventually become successful do so because they realize that psychology is the most important aspect of trading.  Professional traders who have made BILLIONS of dollars in the markets profess that it is ‘internal control, patience and how you deal with losses’ that separate winning from losing traders.

Ed Seykota, industry-recognized trader and lecturer, once taught a college course in trading that lasted ten weeks. He spent the first week of the class teaching basic information about trading. He then spent another week teaching the class Donchian’s 10-20 moving average crossover system.  However, he needed the remaining eight weeks of the class to convince the students to use the system that he had taught – to get them to work on themselves enough to accept the losses that it (or any other good trading system) would generate.

Dr. Van Tharp, author of ‘Trade Your Way to Financial Freedom’, has argued that trading is 100% psychology, and that psychology includes position sizing and system development. The reason is simple:  we are human beings, not robots. To perform any behavior we must process information through the brain.  Psychology is involved in both the design and the execution of a trading system.

As traders, you know how difficult it can be to maintain the internal control necessary to follow your trading plan through all kinds of markets and myriad personal life events.  Even if you are an experienced trader, you know that it is sometimes difficult to keep your emotions out of trading.

How many times have you missed trading opportunities because previous losses had made you feel unsure about whether you should take the next trading setup?

How many times have you anguished over the “right time” to enter the markets even though your rules supposedly outline it clearly?

If you sometimes struggle with the internal control necessary to follow your rules to the ‘t’, having a trading system with defined rules and little opportunity for discretion will be a key component to your trading success.

A trading system that decides for you when to get into a trade and when to get out takes the guesswork out of trading and saves time, energy, and effort.  It allows you to focus on maintaining the most important factor in trading:  internal control.

If you are interested in a system that does the thinking for you, check out the FOREX Model software at www.4xauthority.com