How to stop struggling with your bad trading habits


One of the primal egotistical issues that every person deals with is the feeling of not being restricted by anything. There are a lot of forex traders who will mention the point where they got interested in starting their trading career, and almost all of them will say that it was because they wanted more freedom from their work frame, which was restrictive at best. When you start your trading career, it is because you value freedom to do your own thing with no one breathing down your back.

However, that comes with its own set of challenges, and the biggest one you must deal with as a trader is not having to follow any rules. When you are working with a remote proprietary trading fund, you have no one keeping an eye on you, which means that no one can give you feedback on any mistakes that you are making. This is a big challenge to overcome, because feedback is essential when it comes to managing a funded trading account.

Most of the traders at The5%ers trading fund, appreciate and recognize the enforced work frame of trading risk management. The risk policy we have enforced for all traders is meant to keep them on track, just like a good cop is assigned to keep neighborhoods clean from chaos and crime. This doesn’t mean that we restrict the traders from implementing their trading strategies, but we allow the trader to stick to and focus on their trading plan.

Keeping Your Eyes on the Prize

There is no individual, who can claim to have never broken any rule. People have cheated on their diet, driven past the speed limit, and have cut corners at work to get home quickly. It is human nature, to look for the easy way out or break the conventional rules governing everyday life. However, when you’re trading in financial markets it can be devastating to break the rules. Most forex traders struggle in their trading careers, because they try to go at it alone, but having someone watching your back and offering you with feedback can make a world of difference.

It may sound funny to most forex traders, but when you are trading, you must adopt the rules of an office, so that you can achieve your goals. One of the most important things in forex trading is to understand and measure your performance. The good news is that you can do that by trading with remote proprietary trading funds, who will employ you online, which will be your virtual office. The best thing about trading with a remote proprietary firm is that they give you the same office-commitment, without putting any emotional stress on you to deliver results.

They provide you with capital to trade, and will limit the risk you will be taking in your trading strategy. This is a match made in heaven, as it allows you to keep your eyes on the prize, without taking any risks and that is exactly what you get when join The5%ers Trading Fund. We help forex traders become more confident, profitable and consistent when trading with us.

Combating Bad Trading Habits

If you’re struggling in your forex trading career, there are a lot of different trading habits you can use to combat bad decisions. We have worked with numerous traders and have helped them overcome bad trading habits. There are three habits that will constantly allow you to overcome your bad habits, and these three habits are:

  1. Detailed record keeping
  2. Studying and acknowledging your strongest points
  3. Discuss trading strategies with skilled and better traders to understand their thought process and mentality, which brought them success in forex trading.

The best thing about these three habits is that it helps traders evaluate their trading strategy from a different perspective. This is a powerful tool that helps them iron out flaws in their own trading, and help them to overcome trading pitfalls.

Defining Success in Forex Trading

The key to breaking bad trading habits rests in the ability of the trader to recognize success or failure in their trading strategy. If you are consistently making bad trades, but are lucky enough to make money from them, you shouldn’t congratulate yourself, because it is still a bad strategy. The same goes for when you make a great trade, but have lost money on the trade. This doesn’t mean that you failed, because it was only a matter of luck that you failed to make money from this trade.

When you are losing money in forex trading it can be very difficult to give up and criticize your trading plan, which is something a lot of people do consistently. You must think with a clear mind and analyze the trades to find areas where you can improve your trading plan. However, to do this you must stop rewarding yourself for bad trades that make money.

Changing your trading habits is one of the hardest things to do in forex trading, but it isn’t impossible. You can condition yourself to make trades that aren’t part of your trading strategy, and you must find the strength to be honest with yourself. One of the worst things that can happen to a trader is making money on a ‘bad’ trade, which is where you hold a big losing position, but somehow made a profit from the trade. This can create a false impression on the trader, because traders will employ the same strategy as before, but may end up losing big, and they end up losing their entire trading account.

There are a lot of things you must look at before trading, but if your bad trading strategy helped you make money, you may not want to change it ever again. That is risking your entire trading account because you are under the impression that you are doing well, even with a bad strategy. The market can turn at any time, and if you were successful one day, it doesn’t mean you will find success another day. So, to help you stop struggling with bad trading habits, here are a few habits you must adopt:

•  Pick your trading times and walk away

The Forex market maybe open 24 hours a day, but that doesn’t mean you should be trading around the clock. It is impossible to do that, and you shouldn’t do that anyone, because the forex market is directionless and dead during most of the day. This makes trading a guessing game, and you must pick certain times of the day, where you think that you will experience trending markets like from 2 to 5 am EST and from 8 to 11 am EST. These trading hours are when the megabanks are active in the forex market, which makes them the prime hours to trade for any forex trader.

You must also limit the length of time you are trading on the market, because your brain can only function at 100% for a limited time before it needs rest. If you are planning to trade for more than 8 to 12 hours a day, you are going to burn out and make mental errors when trading. Apart from not getting exhausted when trading, and picking the right hours to trade, you must also be mindful of excessive trading, as it will mean trading outside active market hours. The best strategy is to pick your trading hours and then stick to it.

•  Learn from your mistakes!

A lot of experienced traders are too stubborn to change, because they don’t want to learn from their mistake. That is because they refuse to accept that their mistakes. The key to learning from your trading errors is to recognize patterns in your trading, which I call the ‘low hanging fruit’. It is the low hanging fruit that is filled with big errors, which when fixed will improve your chances of being a highly successful forex trader. The best way to keep track of your mistake is by keeping a log of your trades, so that you know exactly how and when you made the mistakes.

You should also examine all trades you made, so that you can clearly identify errors. I have dealt with thousands of traders over the years, and have found the 2 most common errors most traders make. These two errors are:

  1. Having an overall risk/reward of 2 to 1 or less
  2. Averaging more than 2 trades per trading day

From my experience, I know that every profitable trader keeps a risk/reward of more than 1/1, which helps you win around 50% of the time and make a good profit. Looking at it from a physiological point, you will be most positive if you know that only 1 winning trade will cover 2 trade losses. You should also track the number of trades you make, because that correlates to your take and weekly profit.

The more trades you take, the more difficult it is going to be to remain profitable, especially when you are just starting your forex trading career.

•  Don’t trade with money you can’t afford to lose

This is one of the most important tips that I can share with all aspiring forex traders. Never ever trader with money that isn’t yours or money you can’t afford to lose. If you’re trading with the rent money of next month, and you end up losing, you will not only have lost the trade, but may even get evicted or get kicked out from your home. Trading is a mental game, and if you are putting extreme levels of pressure on trading, you are bound to lose.

The best thing you can do for yourself as a beginner trader is to acquire a proper forex education, and then trade with a micro account or demo account, till you are profitable.

•  Simplify Your Forex Trading Strategy

At The5%ers we keep our beliefs simple, because we know that the banks drive the forex market. Therefore, we don’t create complex forex trading strategies, as we only follow the strategies implemented by the banks. Financial institutions, like banks are moving massive amounts of money, and all traders need to do is follow the money trail. Keeping an eye on the position the banks are taking will help you learn the direction of the market.

Trust me, the best thing you can do in your trading career is to simplify your forex trading strategy. Keeping things simple helps, and you don’t need to come up with a complex trading strategy. You can also get in touch with us to discuss about your trading strategy, and we will help you out!

Final Words

There are a lot of mistakes that you can make in forex trading, but costly trading habits are easier to identify than others. Most trading habits aren’t as damaging as the others, but you must understand and acknowledge trading strategies that aren’t working or may hurt you in the future.

The important thing you must understand is that, you will never make $100,000 a year with only a $10,000 account, and the best thing you can do is pull out some profits, because it is unsustainable. The best advice is to adopt a low-risk strategy, with plans of making profits slowly and steadily, instead of adopting the ‘all or nothing’ approach in forex trading.

The best forex traders in the world, understand that 99% of the time, there won’t be any trades making that are going to be profitable. Therefore, you must be patient and wait for the ideal opportunity to take your forex trading career to the next level. That means dropping bad trading habits at all costs. When you are trading you should keep an eye on the news, but don’t trade when there is too much volatility and uncertainty in the market. Once you make trades in the aftermath, you get a clearer perspective of whether the sellers or buyers are in control, and avoid the volatility as well.