There is no way to will yourself into a winning trade. No matter how many cold showers you take, no matter how many pushups you do, no matter how much sleep you get you will not make a winning trade based on your mindset.

We’ve all had days when we’ve stumbled to the screen bleary eyed and hungover and traded our brains out and other days when we’ve been perfectly tuned physically and psychologically only to see weeks worth profits disappear in the blink of an eye.

Winning in trading has nothing to do with how you feel and everything to do with having your strategy align with the market environment. On range bound days you can buy bottoms and sell tops without placing a stop, walk away from the screen for hours on end and come back to a nice fat profit even if that morning you had a knock-down-drag-out fight with your spouse, are suffering from pulmonary pneumonia or simply hate the world and everyone in it that day.  

Why? Because trading isn't about psychology, it isn’t even about making money. Trading is the art of making good decisions and psychology is actually the single biggest source of sabotaging that process.

Tell me if this sounds familiar. You are trading okay, the day is proceeding to plan and you get a new signal on your strategy. You hit the buy button and turn away for a second to check an email or a DM.  You turn back to the screen and realize that instead of being long you are short and worse than that you are short 10 times your intended size because you set the trade up incorrectly or your cat walked over your keyboard or your trade copier failed or blah blah blah blah

What happens next? 99 times out of 100 blind rage or debilitating fear takes over and you make  the situation much worse by - A. staying in the trade hoping it will turn or - B. trying to trade your way back to break even right away.

In fact almost every single account blow up can be traced to this simple sequence - something surprising happens either with the execution of the trade or with the market price action all of which is highly adversarial to your position. Your base instincts of self-preservation take over without you even being aware of it. In that moment of anger and fear all the “mindfulness” exercises offer little solace and provide zero value.

Psychology in trading is a “negative externality”. It won’t help you to make winning trades but it is excellent at making sure you make the worst decision possible to ensure the blow up of your account. 

When traders talk about “experience” - this is what they mean. Experience is simply a polite way of saying you’ve been in the market long enough to have been f- over every which way possible. An  “experienced” trader just like a war hardened veteran harbors  no illusions about human nature or the fairness of the state of play.

But even if you’ve had tons of “experience” you won’t stop blowing up accounts even as surprises begin to look more and more familiar. 

In order to short circuit the destructive A or B self preservation pattern discussed above you have to have supreme confidence that your strategy can overcome whatever adversity has been thrown your way. Only then can you stop. Regroup. And rebuild.

But confidence only comes from competence which means that you must develop a feel and create viable rules for when to trade range and when to trade trend and no amount of meditation will help you succeed until you master that one key trading skill.


Past performance is not indicative of future results. Trading forex carries a high level of risk, and may not be suitable for all investors. The high degree of leverage can work against you as well as for you. Before deciding to trade any such leveraged products, you should carefully consider your investment objectives, level of experience, and risk appetite. The possibility exists that you could sustain a loss of some or all of your initial investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with trading on margin, and seek advice from an independent financial advisor if you have any doubts.

Editors’ Picks

EUR/USD holds steady above 1.1850 as markets eye Eurozone GDP, US CPI inflation releases

EUR/USD holds steady above 1.1850 as markets eye Eurozone GDP, US CPI inflation releases

The EUR/USD pair trades on a flat note near 1.1870 during the early Asian session on Friday. The major pair steadies amid mixed signals from the latest release of US economic indicators. Traders await the preliminary reading of the Eurozone Gross Domestic Product for the fourth quarter and US inflation data, which are published later on Friday.  

GBP/USD consolidates around 1.3600 vs. USD; looks to US CPI for fresh impetus

GBP/USD consolidates around 1.3600 vs. USD; looks to US CPI for fresh impetus

The GBP/USD pair remains on the defensive through the Asian session on Friday, though it lacks bearish conviction and holds above the 1.3600 mark as traders await the release of the US consumer inflation figures before placing directional bets.

USD/JPY rebounds above 153.00 ahead of US inflation data

USD/JPY rebounds above 153.00 ahead of US inflation data

USD/JPY stages a comeback and regains 153.00 in the Asian session, snapping a four-day losing streak amid some repositioning ahead of the US CPI report. However, expectations that Japan's PM Sanae Takaichi could be more fiscally responsible, along with bets that the BoJ will stick to its policy normalization path and the risk-off mood, could support the safe-haven Japanese Yen, capping the pair's upside.


Editors’ Picks

USD/JPY rebounds above 153.00 ahead of US inflation data

USD/JPY rebounds above 153.00 ahead of US inflation data

USD/JPY stages a comeback and regains 153.00 in the Asian session, snapping a four-day losing streak amid some repositioning ahead of the US CPI report. However, expectations that Japan's PM Sanae Takaichi could be more fiscally responsible, along with bets that the BoJ will stick to its policy normalization path and the risk-off mood, could support the safe-haven Japanese Yen, capping the pair's upside.

Gold: Will US CPI data trigger a range breakout?

Gold: Will US CPI data trigger a range breakout?

Gold retakes $5,000 early Friday amid a turnaround from weekly lows as US CPI data loom. The US Dollar consolidates weekly losses as AI concerns-driven risk-off mood stalls downside. Technically, Gold appears primed for a big range breakout, with risks skewed toward a bullish break.

AUD/USD consolidates below 0.7100 as traders await US CPI report

AUD/USD consolidates below 0.7100 as traders await US CPI report

AUD/USD consolidates the previous day's retracement slide from the vicinity of mid-0.7100s, or a three-year high, holding below 0.7100 as traders move to the sidelines ahead of Friday's release of the US consumer inflation figures. In the meantime, the divergent RBA-Fed outlooks might continue to support spot prices amid subdued US Dollar demand, though the risk-off impulse could act as a headwind for the Aussie.

Bitcoin, Ethereum and Ripple stay weak as bearish momentum persists

Bitcoin, Ethereum and Ripple stay weak as bearish momentum persists

Bitcoin, Ethereum and Ripple remain under pressure, extending losses of over 5%, 6% and 4%, respectively, so far this week. BTC trades below $67,000 while ETH and XRP correct after facing rejection around key levels. With bearish momentum persisting and prices staying weak, the top three cryptocurrencies continue to show no clear signs of a sustained recovery.

A tale of two labour markets: Headline strength masks underlying weakness

A tale of two labour markets: Headline strength masks underlying weakness

Undoubtedly, yesterday’s delayed US January jobs report delivered a strong headline – one that surpassed most estimates. However, optimism quickly faded amid sobering benchmark revisions.

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