10 Top Secret Rules

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Thoughts On Forex Trading

It’s sad really. 95% of people who start trading fail. But why?

Are they stupid?.... noAre they not suited to it?.... noIs the market rigged?.... no

Do they get the wrong education and start off on the wrong foot? Yes!

Trading really isn’t that hard. If a newbie gets off on the right foot, they can easily become a pro trader.

The problem is most newbie traders don’t get off on the right foot. Most traders start so far off base they fail before they begin....

Newbies need to learn to SCREW THE RULES and break free from the standard Forex education trap. There is way too much crap out there. Newbies need to know the truth about trading...


Rule 1: Screw The Pack

“95% of traders fail, so why do what 95% of traders do? ”

- Nick Bencino, boss, forex4noobs.com

95% of traders are losers!

Don’t follow the pack, you know 95% of them will fail. If you follow failures guess what you will become.

FACT: At least 9 out of every 10 new traders you meet won’t make it.

So why do what they do?

Why sign up to a forum and look for the latest and greatest indicator based trading method?

Why trade indicators at all? 95% of traders’ trade indicator based methods.

- The truth is if somebody releases a free method on a forum and hundreds of traders start trading it..... There is a 95% chance it is useless.

- If somebody releases a new EA on Forex Factory there is a 95% chance it is useless.

- If somebody signs up to a signal service and tell you how great it is there is a 95% chance it is useless.

Because 95% of traders fail 95% of the education, e-books, systems and signal service must be USELESS.

The trick is not to trade by yourself away from the trading community. It is instead to break away from


the pack and do things differently.

Rule 2: Screw Not Thinking

“No Thinking Needed methods work amazingly well in trending markets but fail miserably in ranging markets. ”


A no-thinking-needed method is any method that requires you to follow strict unchangeable rules. These are mostly indicator based systems.....

Example: Enter long when 10 ema crosses up through 50 sma and enter short when 10 ema crosses down through 50 sma.

When a trading system lays out strict no-thinking-needed rules there is a 95% chance it’s a useless method.

This is because Forex is a dynamic market. Market conditions can change at the drop of a hat. A trending market can become a ranging market overnight. It can last for a few days or even a few months.

To succeed in Forex your method must be fluid and it must be able to adapt to changing markets. Most of the crappy methods, idiot fake traders release on forums, are no-thinking-needed methods.

Sure they may win 9 in 10 trades this week but what about next week, or next month?

If you want to have any hope of surviving long term in this market you need to learn how to trade. To do that


you need to understand price action.

Your method doesn’t have to be 100% price action based. But it needs some element of price action based analysis in it.

Price action analysis requires you to think.

What Is Price Action Analysis?Analysis that requires you to think about what’s happening with the market and how/why it moves.

- S+R Lines (the ones you place on your own)- Trend Lines - Candlestick Analysis

Rule 3: Trade Only One Pair

“If you’re a newbie you shouldn’t overburden yourself with too many pairs. ”


Don’t be an idiot.

If you wanted to become a professional juggler would you start off juggling four buzzing chainsaws? Of course not because that would be stupid and dangerous.

Juggling multiple pairs when you’re just starting is stupid.

One of the most important things you can do is to pick a single pair. This is because it helps to:

- Focus your mind on a single goal.- Focus and fine tune your trading analysis.


- Lessen the stress and confusion of juggling multiple pairs.- Reduce mistakes.

Once you can successfully trade one pair you can decide to trade more if you wish.

I used to look at 6 pairs when I first started. Not surprisingly, I blew my first 2 live accounts. On my third account (and what would have been my last if I failed) I focused only on trading GBP/USD. 5 years later, I am a professional trader with a huge account and an 80% win rate.

Rule 4: Don’t Clutter Your Charts

“If I can make 100 pips per week, with just a few horizontal lines on my chart, why should I bother adding 5 indicators to my chart? ”


Complex charts don’t make you a professional trader.

Take a look through some Forex forums. It seems like the more squiggly lines some idiot has on his chart the more respect he gets.

‘Wow he has 10 indicators and 2 pages of analysis, on EUR/USD, he MUST be good’

Bullshit!

I am sure there are successful traders with messy charts out there. However, all the successful traders I


know have nice clean charts. Their charts have 1 (max 2) indicators and then some price action analysis. My charts consist of about 10 horizontal lines, no indicators and I have been averaging 100 pips per week for 4 years.

The biggest culprit for messy charts is too many indicators. Realistically, a good trading method should use 0-2 indicators. Having a lot more than 2 indicators leads to the following problems:

1. Adds to the clutter making your charts harder to read.

2. Gives you more to think about, therefore clouding your judgment.

3. Increases the possibility of giving you conflicting signals.

4. Looks pretty damn ugly…

Clean and clutter free charts allow for more precise analysis and trading. So if your chart is a maze of squiggly lines try killing off some indicators.

Rule 5: Remove Distractions

Not everybody will be able to do this. If you can it is very important that you have a dedicated trading space.

Is there an unused room or some unused space in your home? Can it fit a desk? If you answered yes to both questions then congratulations you might have


just found your trading space.

If your space is in the lounge room, go out and buy a cheap office divider. Try to remove distractions so you can put all your concentration into your trading. If you have a whole room to yourself close the door. Tell your partner to take care of the kids or tell your room mate to turn down the music.

Whatever your situation, try and do the best you can to remove distractions. Trading on a couch in a noisy living room isn’t efficient. You don’t want anything to distract you from your charts.

Rule 6: Experts Are a Joke

“If 95% of traders fail 99% of the self proclaimed experts lead them to failure”


Most ‘experts’ are idiots who couldn’t make $10 on a $10,000 account.

The main problem in Forex is that any newbie who has had a good week considers himself an expert.

They slap a few indicators together that make a few hundred pips in a simple trending market. They give that collection of indicators a name and post it on a forum. Next thing you know, hundreds of other Newbies are trading this crappy system and making pips. Until market conditions change and the system becomes useless.

The other type of self proclaimed experts are even worse. They are the failed traders who write e-Books and sell them for $97 a copy. It’s pathetic really.


The point is that anybody can claim they are an expert trader. Don’t believe them, or take their advice, just because they have a nice website. Only believe it if they can ---prove it (link to live trade vids)-----.

Take expert advice with a grain of salt. At the end of the day, you should only trust yourself.

Rule 7: Set Targets

“If you fail to plan, you plan to fail”

- Who knows, somebody said it!

Many traders lose their accounts because they don’t have any targets.

Setting targets is absolutely essential. You should have a target for each trade, a target for each week and a target for each month. This is because as soon as you set a target you have a goal to work towards. Setting targets gives you:

- A structure to your trading and allows you to plan ahead in the short and long term.- A solid goal to aim for each week and month, as opposed to trading aimlessly.

And as if that is not reason enough to set targets it also does 2 other amazing things.

- Discipline. An undisciplined trader is a losing trader. Setting targets helps make you a disciplined trader. As I said above, it gives you goals and structure. With structure comes discipline, which is essential to your success.


- Kills Overtrading. 1 of the biggest killers of a Newbies trading account is overtrading. Newbiesalways want to be in the market because they think if they’re not they’re missing out on pips. If you settargets you should stop trading once they have been met. Setting targets helps to stop you from overtrading.

Targets should never be based on a monetary gain only a pip gain. Most Newbies concentrate too much on earning $100 per week then feel compelled to earn another $100. A pip goal helps to separate your mind from the need for money. You cannot do your shopping in pips so you’re less likely to get the urge to overtrade beyond your targets.

Rule 8: Do Your Own Analysis

“Setting targets gives you a firm goal to work towards. Once you have a goal half the battle is won”


This ones short and sweet.

Do your own damn analysis!

Your goal is to learn to trade, not to blindly follow some person who does analysis for you on their blogor via email.

Yes I do analysis on my blog but it is purely for new traders to confirm their own analysis. If you trade my method you do your analysis first then you watch mine to make sure you have it right.

If you plan to be in this business for the long run you HAVE TO learn to trade. You cannot simply rely on


others. Part of trading is getting up every Sunday and analyzing your charts for the week ahead.

If you want to be a trader you have to do your own analysis.

Rule 9: The 3 Trade Rule

“If you lose 3 trades in a row something is probably wrong. For the sake of your account, your sanity and your career, as a trader, TAKE A BREAK!”


This is by far the most important rule I have ever put to action, in my own trading. Had I not stringently stuck to this rule I truly believe I would not be a successful trader today.

If you lose 3 trades in a row STEP AWAY from your charts. Take a few days off trading and come back with a clear head. This allows you to:

1. Kill the Losing Streak – Losing streaks always start off small. You may make a little mistake in your analysis, which leads to a bad trade. Maybe out of anger you take another bad trade and from there on out the losing streak takes on a life of its own. It’s best to cut losing streaks short. If you make a decision to shut down the charts you will cut off all chances of trading out of anger, and making costly mistakes.

2. Take a Break and Clear Your Head – Most losing streaks are caused by chart overload. After a few months of constantly staring at charts you could start to lose it. So instead of making mistakes take a short break and come back to your charts with a refreshed mind.


3. Preserve Your Capital – Do I need to explain this one? It stops you from losing your hard earned money by taking dumb revenge trades and making stupid mistakes.

I cannot stress this rule enough.

If you lose 3 trades go do something you love doing and don’t look at a chart for a few days.

More Info:

Rule 10: Keep It Simple

“Any intelligent fool can make things bigger, more complex, and more violent. It takes a touch of genius --and a lot of courage -- to move in the opposite direction."

- Albert Einstein

Keep it simple!

There is no reason to complicate trading. For example, my trading method is really simple and really effective. I spend 2-5 hours per week trading and the rest of the week enjoying life.

Newbie traders think Forex is hard so they try to look for complicated solutions to trading. The few traders that make it realize that complexity does not equal success, and move in the opposite direction. Keeping trading simple and stress free is the key to success.

Your method does not have to be incredibly complex to work. Keeping it simple will allow you to:

Killing Your Losing Streaks - Blog post

http://www.forexfactory.com/forumdisplay.php?f=11


1. Work much more efficiently2. Work less3. Speed up your learning

If you remember nothing else, remember this…..

Keep it simple!

10 Top Secret Rules

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