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In this video, I break down all of our trades from February 2017. Any members of DTFL, you are welcome to go through the daily market previews if you would like current month results. For all those on the free side of the site. I should be getting caught up with the month end reviews by the end of the year. I’m in the process of re-designing the course to make it more user-friendly and that is taking all of my free time.

1 Simple Forex Trading Strategy: +369% Percent Compounded Gain - YouTube

-Sterling

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I was recently asked by the 52 Traders Podcast to come on their show. I have embedded the podcast below and its over an hour of content. In this podcast I share more information about my start in trading, but more importantly I give a ton of actionable tips I wish I would have known when I first started trading. Additionally, I break down the core ideas behind our bank trading strategy, and how you can start putting those tips to use in your own trading today.

Happy Trading,

Sterling

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It is an undeniable fact that the vast majority of traders reading this are not consistently profitable. Some last a few months in the market, while others last a few years or more before finally throwing in the towel. In fact, just last week I had a trader email me saying that she had been trading forex unsuccessfully for over 8 years before joining our service! While I admire that type of determination, the fact is it shouldn’t take that long to become a successful trader! If you have been learning to trade for months or years, if you have tried all the trading strategies, indicators, and EA’s then this article is for you. Over the past 7 years of running DTFL, I have had the opportunity to interact with over 10,000 forex traders in some way, shape, or form. Having had so much interaction with retail traders gives me quite a unique position to see the most common points of failure. Over those years, and having dealt with so many aspiring traders I have seen 3 traits that are a plague, literal gangrene that eats away at the possibility of becoming a full time trader.

Cognitive Dissonance Among Traders

First, we have to understand what cognitive dissonance is to understand how it relates to trading. Wikipedia defined cognitive dissonance as, “the mental stress of discomfort experienced by an individual who holds two or more contradictory beliefs, ideas, or values at the same time, performs an action that is contradictory to one or more beliefs, ideas, or values, or is confronted by new information that conflicts with existing beliefs, ideas, or values.“

What is a good example of cognitive dissonance you might ask? Think about someone you know who smokes. In their mind they know for sure that continuing to smoke cigarettes can shorten their life span, but on the other hand they love to smoke. There is a constant rationalization in their mind which allows them to continue the action that conflicts with the information they know to be true about the effects of smoking on their health.

How does the theory of cognitive dissonance affect retail traders? As it relates to trading we are going to focus on the part of the definition that I have underlined above. This part points to an individual being “confronted by new information that conflicts with existing beliefs, ideas, of values“. To some extent or another, what do the vast majority of forex traders believe or hold to as core ideas? After dealing with close to 10,000 traders, what I say next is not opinion, but rather a very common observation. The vast majority have spent months or years searching for the magic indicator, the simple system that “even your grama can learn in 1 hour or less”, or the EA that “makes money while you sleep guaranteed”. After getting burned enough times people eventually come to realize there is no 1 minute fix to becoming a profitable trader. Even still the vast majority will continue to buy the same get rich quick junk over and over. This is a great example of a belief being opposite to the action. 

Why would someone continuing doing something that they know on some level won’t work? If someone in that situation stops the hunt to make an easy buck then they have to come to the realization that they had been wasting both their time and money. There is a lot of “hope” and “dreaming” that comes with searching for the holy grail. Giving up the idea of overnight Ferrari’s and private jets isn’t something people tend to do without a struggle. 

Solution: The key point to this topic is quit system jumping in search of a holy grail or magic bullet! You must come to the realization that trading success can only be found in the same manner you find gold….at the end of a shovel and ton of hard work. Find something that you believe in and trust, and then stick to it. Maybe you take bits a pieces of different strategies to make your own, or maybe you follow a mentor’s strategy 100%. Regardless of what you do, if you invest less than 3 months learning something creditable before quitting on it, then you are doing yourself a disservice.

What Fat People And Forex Traders Have In Common

I already told you I was going to offend some people, so if you’re still reading and you’re offended then you have no one else to blame but yourself. I had an epiphany a few days ago and it started when I noticed a commercial for “P90X”. Have you heard of it? I’ve read it is the greatest selling weight loss/workout program in history, having sold over 4.5 million copies through 2013. There is literally NO DOUBT, that if someone follows through on the entire program they will certainly be in much better shape by the end of the 90 days. Hell, even if they did 50% of the recommended work and diet they would see tremendous results! Let me ask you this though, how many people actually follow through with the entire program? In researching the answer to that question I found out that at BEST only 10% of people will follow through with a workout or weight loss plan. Sound familiar to the forex market? Here comes the unpleasant truth many will not want to hear. 

You see, like those who are looking to lose weight, most forex traders want the results but don’t want to put in the effort. If you sit around all day and eat donuts you’ll get fat, and if you go after the same hype driven get rich quick schemes you will keep losing money. There is no magic bullet, there is no easy fix to trading! That is worth repeating! There is no easy solution to, or magic bullet to becoming a profitable forex trader. It took me close to 4 years before I was profitable! I’m not saying its going to take you that long to be profitable but I can speak from experience having been actively trading for close to 13 years. In my 13+ years of experience I have never met a profitable trader that was consistently successful before 6 months of hard work with most taking longer. I’m absolutely certain that statements like this turn many people away from DTFL and to be honest that is just a side benefit to me saying that. The fact is if someone isn’t willing to make the commitment then they aren’t going to make a very good student and therefore probably shouldn’t become a member.

Solution: We all know its human nature to want the easy solution to life’s problems. You wouldn’t have things called “get rich quick schemes” if the desire to get rich quick didn’t exist. In fact the reason I think it took me so long to be profitable is because I spent two years trying to find the easy fix to trading. Its human nature, but in trading its also the thing that will bury you! A few months back I wrote an article about 3 keys to becoming a profitable trader. In that article I list 3 specific points that can really help any struggling trader get on the right track and I would encourage you to read that after finishing this post. All the points I list in that article share one core belief which is that trading is a long term process, and success only comes after months or years of hard work and dedication. The bottom line is if you’re not committing days rather than months to learn a strategy, you should wonder why “none of them are working”.

The Dreaded Drawdown!

Have you ever had a drawdown? If you have been trading for more than a few weeks then the answer to that question is a resounding yes! This is one major reason that trading is such a difficult game to master or become successful at. Why? What happens to you when you are in the middle of a series of losses? Emotion begins to take over and mistake begin to happen. Below is a list of 3 very common mistakes new traders begin to make as they start to experience multiple losing trades in a row. Obviously this list could be much longer but here are 3 of the most common and often most detrimental.

1.) You start to question your entire strategy, even if you have seen it work for months or years.

2.) The urge to use higher leverage to ‘make back’ your losses even faster becomes incredibly strong.

3.) Looking for random setups that have nothing to do with the strategy you are trading is common place.

The trouble with these 3 points is that it only compounds the original problem, as it will often lead to more losses of even greater size due to the increase in leverage. This downward spiral will many times result in the trader blowing up his or her trading account. “Obviously” once the account is blown up they “have to” look for a new strategy as the blame couldn’t possibly be their fault (sarcasm included). Dealing with drawdowns is tough, but they are often NOT the main reason someone blows up their account. If you reflect back on any time you have blown up your account it often starts with a few losses. After a couple losses human emotion begins to push you into 1 of, if not all of the 3 common mistakes addressed above.

Solution: Understand that losses are part of the business! The greatest traders in the world have losses, and the greatest traders in the world have drawdowns. The only difference is the great traders learn to handle drawdowns. That is not my opinion, it is a fact. There is no way around this, and the only true solution is accepting it as part of the business. Many times in trading, the solution to one problem will help solve another. In the article I linked to above, I address the importance of having a long term plan for growing your account. I would encourage everyone to write out a month by month account growth chart using a reasonable monthly growth percentage. Did you know that a $5,000 account compounded at 10% per month would be worth over $1,000,000 in less than 5 years? Having an account growth chart written out that you can refer back to will help you avoid the mental pitfalls discussed above, as it will allow you to focus on your long term goals. Focusing on long term goals helps to put a series of losing trades in perspective, thus giving you a better chance to weather the storm of learning to trade forex.

-Sterling

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Total Compounded Gain Through January 2017: +340%

January 2017 Trading Results - Becoming A Patient Trader - YouTube

Mastering the discipline of patience is key to becoming a successful forex trader. In trading there is never an even distribution of losing or profitable trades. For example, a strategy with a high win/loss ratio of 80% is still capable of having 5, 6, 7 or more losing trades in a row. Because an even distribution of winning or losing trades is never certain, you must have the patience to continue waiting for the correct setup. If a trader lacks patience they will often find themselves making common mental errors such as over-trading, revenge trading, “doubling down”, or many of the other common errors often made. The month of January illustrates this principal very clearly. What can you do to start developing the trait of patience in your trading? Below is 3 points that will help any struggling trader.

1.) Have A Clear Goal In Mind: Depending on the statistic that you want to use, those that have physically written down their goals are at least 5 times more likely to achieve them. Additionally, it has been proven that in addition to writing down you goals, having specific dates for completion as well as telling others your goals will help you actually achieve them. If I were to ask the average retail trader who is still in the learning phase what their trading goals are I would get very generic answer. It has been proven that specificity in goal setting is essential to actually achieving it. This point also ties into point #2.

2.) Chart Your Account Growth: Did you know that a $5,000 account compounded at 10% per month over a 5 year period of time comes out to over 1.5 million dollars? Most will look at that number and think 5 years is way to long to become a millionaire but that is seriously flawed thinking. How many people go to school for 4 years only to come out with 50-100K in debt!?!? The fact is trading success will not come over night. This is an unfortunate fact most in the retail word fail to realize. They think there is some easy path to huge trading profits. The truth is there is only one path which comes from reasonable and consistent profit month after month. Having a long term goal as well as month growth figures will help you put together your goals from point #1.

3.) Have A Specific Trading Strategy: If you are anything like I was when I first started trading, then you have taken your fair share of random trades that “looked good” at the time. If you do not have a clear well defined trading strategy with specific rules for entry, exit, and trade management then you will not produce consistent profits. One of most important aspects to the DTFL Bank Trading Strategy is the mechanical nature of the entry. Having an exact rule set for entry helps provide a solid structure from which you can judge each trade setup. By sticking to that rule set, you will not only develop patience but also the discipline to wait for the correct setup. If you are still looking for a trading strategy with specific rules for entry then I would recommend checking out our forex day trading course on tracking market manipulation and smart money.

-Sterling

Want to learn the bank trading strategy, join our live training room, access live member chat, as well as lifetime support? Click Here

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One of the most difficult obstacles all traders must learn to overcome is the dreaded drawdown. More often than not one or two losses spiral into revenge trading, over trading, “doubling down”, and many other mental errors struggling traders make. I’m a firm believer that a forex trading strategies profit potential is far outweighed by the likely max drawdown a strategy may have. Have you every known someone who makes a lot of money but they are constantly broke? Its really no different in trading. Just like in life, in trading its not about what you make, but rather, what you don’t lose/spend. Having a strategy that has relatively small drawdowns, as well as the ability to quickly recover from those drawdowns, is critical to becoming a successful forex trader! During the months of November and December 2016 we had a -8% draw down. This was the worst draw down we have had since December of 2014. 

I started these month end reviews in May of 2015 and including November and December we now have 20 month end reviews. Out of those 20 months, we have had 16 profitable months, 1 break even month, and 3 losing months. Even with a consistently profitable track record we still see draw downs from time to time. I’m a firm believer that reward to risk ratios are the way to deal with the drawdowns all traders will have from time to time. By having a proper R/R ratio you are able to recover much more quickly. This also is a huge benefit to the psychological aspects of learning forex. Often traders make mental errors when the hole seems to deep to dig themselves out of. Knowing that 1 winning trade can erase two losses makes any drawdown look less daunting and helps reduce the urge to try to ‘make back’ a series of losses with over leverage revenge trading. In the video I discuss this point further, along with what you can do to analyze your own trading. 

Total Compounded Gain: +320% Through December 2016

Live Trade Results For November & December 2016 - Day Trading Forex Live - YouTube

-Sterling

Want to learn the bank trading strategy, join our live training room, access live member chat, as well as lifetime support? Click Here

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First of all I have to apologize for getting behind on these videos. I have started producing them in 1080p and wanted to wait to get my new setup before getting these videos current. October 2016 is the 18th video in the month end series and it finished with a +8.5% gain bringing our total compounded gain to +356% on all EUR/USD and GBP/USD trades. This is also based on 2% risk per trade. Its important to note that the DTFL bank trading strategy can be used on any pair and most DTFL members do trade additional pairs in an effort to have more trading opportunities.

One of the most important aspects of becoming a full time forex trader is a positive reward to risk. I’m not saying that you cannot be profitable without a positive reward to risk ratio. What I’m saying is that in my opinion there is nothing more important than reward to risk. We start all of our trades with an initial R/R of 2 to 1. For every dollar we are risking we have the potential to make $2. While initial reward to risk is important, as you all know not all trades hit a full stop loss or take profit. As such it is critical to know what your actual reward to risk is on your closed trades. As an average our closed positions come to 1.6 to 1 which means we could win 40% of our trades and still be profitable. If we win 50% of our trades we make a decent profit and at 60% you have a very nice strategy.

Tony Robbins wrote a book titled Money: Master The Game – 7 Simple Steps to Financial Freedom. I did a post on that book and it was titled Learning From Billionaires – 7 Secrets From Investment Superstars. In that book he interviews some of the greatest financial minds in the world from people like Carl Icahn to Warren Buffet. While they all have different investment strategies, they did all share one thing in common. What was that one thing? Every single one them mentioned the phrase asymmetrical reward to risk. Essentially, for every $1 they risk they want to have the potential to make $3 or $4. If the greatest financial minds in the world, and the most successful investors in the world all share this common belief, then why wouldn’t an average trader like you or I?

If you’re using a in the process of learning to day trade and losing money then I would highly recommend looking at the actual reward to risk of your closed trades. If that number is less than 1 to 1 you have a good starting point from which to turn your trading around. Its also critical to keep in mind that not all day trading strategies are designed or setup to capitalize on reward to risk ratios. This is especially true of the shorter term trading strategies. The DTFL day trading strategy is specifically designed to only get setups where higher reward to risk is likely if the direction is right.

Market Manipulation Day Trading Strategy - October 2016 Trades - YouTube

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-Sterling

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September 2016 was a Break Even month of trading for the EUR/USD and GBP/USD. Going into August 2016 we were on a run of 19 consecutively profitable months of trading. Its important to keep in mind that these videos only cover the Euro and Pound and most members trade other pairs after learning the strategy. Therefore, trading more pairs can produce much higher results and you can also have proportionally larger draw downs obviously. Anyway, August broke our profitable streak with a small loss of -2%. The following month of September was a break even month which kept us at a +328% compounded gain over the last 17 months of trading. August got back on track with a +8.5% gain but we will get into that in the next video which will be released shortly. 

August and September bring the aspect of trading psychology into focus as the mental aspect of trading is never tested more than when you are break even or having a losing month. The strongest aspect of this day trading strategy is that we don’t have large draw downs. Its important to remember that our worst month in the last 22 months was only -2%, and we never had a running draw down of over -6% if someone started at the worst possible time. This is SO IMPORTANT for long term trading success. For those who are learning to trade forex, having a trading strategy that doesn’t have large draw downs is critical! Nothing holds traders back more than the small space between their ears. In last months video I write about 3 tips you can use to handle the down side of trading. You can chek that out in the post titled, ‘How To Handle The Ups And Downs Of Trading For A Living‘. I would recommend checking that out after watching this month review video.

Forex Bank Trading Strategy Results - September 2016 - YouTube

-Sterling

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One of the most difficult aspects of becoming a full time forex trader is dealing with the ups and downs that come along with it. The fact is no full time trader will go month after month without at least having some break even or losing months. This was out 16th month end review and it is our first month that was not positive. For the month of August 2016 we ended the month at break even. Being break even for a month can cause as much psychological stress as a losing month. The fact is, it’s only natural to feel like the month was wasted when you end it break even. This is where mistakes can begin to wreak all the progress you might have made prior to that month. The logical question is thus, how do you deal with it? Here are 3 tips to help deal with negative or break even months as well as the video covering all valid trades for the month of August 2016. 

1.) Have Your Long Term Goal In Mind: Its been said that, ‘if you fail to plan, you plan to fail’. This statement has never been so true as it is in trading. Let me ask you this question. What is your long term goal as a trader? The vast majority of people will have a generic response like, “I want to replace my income and trade full time” or something along those lines. While that is a start, it is not specific enough. If you look back through history you will see that anyone who was truly successful in their chosen field was very specific. They often talk about envisioning their end goal as if it was already achieved. This starts with knowing EXACTLY what you want to achieve and how you plan to get there. 

When you are making your long term goal you should have exact numbers in mind. What do you want to make per month EXACTLY? With this point in mind you can move on to point number 2 which is very similar.

2.) Have An Exact Plan To Reach Your Goal: Once you have a goal you can start making plans to reach that goal. Again, this is a topic that most people approach with ‘broad strokes’. My personal recommendation is to sit down and write out by hand what your starting account balance is and compound that balance by your expected monthly growth percentage. If you want to make +10% per month then sit down and write out the ending balance if you were to take your account and compounded it by 10% per month. Again this is just an example figure and you can input your own number based on your personal risk tolerance and forex trading strategy

3.) Be Realistic: Most people come into the world of forex with dreams of grandeur. They see brokers that allow 200 to 1, 300 to 1, 400 to 1 or larger leverage and they think they can turn a few hundred dollars into a few hundred thousand dollars in a few short month. The fact is trading doesn’t work like that and if you have been trading for a few months you have already started to come to terms with that hopefully. With that being said you can become a successful trader, but you cannot follow in the footsteps of the masses and expect to achieve different results. By giving yourself a realistic long term goal you set your sights on a what your account will be a few years down the road, not what it will be next week. This has a massive psychological impact that can help you overcome a losing or break even month. 

As an example. Lets say you start out with a $5,000 account. If you were to gain 10% on a $5,000 account you would have roughly $155,000 by the end of 3 years and well over $1,500,000 by the end of your fifth year of trading. Most people look at that and think that growth is too slow and there in lies the problem with their perception. Only you can determine whether the work and time is worth the effort. To me the greatest risk and/or loss is working away the best years of your life until you are 60-70 only to retire when you are too old to enjoy it. In my opinion, whatever effort is required to enjoy life now is well worth the effort. With that being said only you can make the decision. Enjoy this months video!

Low Drawdown Forex Strategy - August 2016 Live Results - YouTube

-Sterling

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One of the most common areas that tends to plague retail forex traders is over-trading. With that being said a lot of trades is NOT a bad thing if they are all correctly executed trades that follow a proven trading strategy. The trouble comes in when traders start placing random trades, things such as the classic “double down revenge trade”. Regardless of the trading education that someone seeks out, only you can curve that addiction to over-trading. For those who struggle with the addiction of having to be in a trade, all hope is not lost. One of the strongest cures for over trading is having a detailed trading plan with strict entry and trade management rules. Having a solid rule structure gives you something to judge every setup against. While it will not physically restrain that pesky pointer finger automatically, it can give you a mental backstop from which you judge a setup before clicking the button to buy or sell. Because the DTFL forex bank trading strategy has a mechanical entry, it can reduce someone’s lack of restraint, but only if they focus on the rules. Again, nothing is a can stop someone from over-trading other than themselves, but a mechanical rule based entry can be the first step towards overcoming this common problem

Moving on to the July month end review video, we had the fewest number of trades in a one month period I ever remember in the history of DTFL. Granted these videos only cover trades on the EUR/USD and GBP/USD. Those two pairs alone are not a reflection of trade quantity for those members who trade many more pairs. Those who trade more pairs would obviously see more traders. July was however, a great illustration that the number of trades you might take really has nothing to do with the amount of profit you might make. During the month of July we only had 4 valid trades on those two pairs, but we had a total profit of +8% on only 2% risk per trade with zero draw down at any point during the month. This video is the 15th month end review video I have posted in a row, and it is the 15th consecutively profitable month as well. July’s +8% gain brings that 15 month compounded total to +335% on just the EUR/USD and GBP/USD. I hope you enjoy this months trade recap!

Fewer Trades Can Equal More Profit - July 2016 Results - YouTube

Want to learn the bank trading strategy, join our live training room, access live member chat, as well as lifetime support? Join Us Here

-Sterling

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