Insights for Forex Traders for December 2020 by Saul Lokier (2024)

Real talks with real forex traders

At The5ers, we get to speak to many of our traders about their strategies, systems, and emotions through our Portfolio Analyst Resource.

We hear about the traders’ challenges and successes!

From these talks, we get to learn a lot of important insights regarding trading performance that might be helpful for all of you!

Here are some key insights from last month:

“I usually trade consolidation breakouts, but I struggle letting my trade run in my favor; I find myself closing for small profits as market retraces”

Insight: After breakouts, It is very normal for the market to retrace back to the breaking level before continuing in the previous direction. These are called Swap zones, where resistance becomes support or supply becomes a demand. Be conscious of that pullback being normal market behavior, expect it so you don’t close your trades early when it happens.

“I do great on my demo accounts, but I can’t perform the same on real accounts”.

Insight: I hear you. I know this from a lot of traders, myself included years ago. Once real money is on the line we start trading differently. It is a normal and natural process we all need to go through. Expect to lose money at first, but make sure you learn from those losses. Think of that first lost money as learning fees, the same money you would commit to learning any other skill. Once trading real, start with very small positions, get used to them, and slowly increase your position size.

“I started trading supply and demand areas, but I am getting a lot of losses.”

Insight: SnD is only a way of reading and understanding the market, it isn’t a strategy itself. You need to build your own strategy around SnD concepts using parameters that suit your lifestyle and trading style. Let’s start adding some filters and better definitions of how you define tradeable areas.

“I recognize that I start revenge trading and over trading when increasing lot sizes”

Insight: First, it is impressive you recognize the fact that increasing lot size is actually the cause for bad performance such as over-trading. Now you are aware of that, let’s approach it.

Risk tolerance is like a muscle we need to build and make stronger. We can’t jump from a micro-lot on a small account to managing 10 lot positions from one day to another. Even if you are trading a larger account, keep your lot size small and increase it slowly over time. You will soon get used to the big numbers and positions and will be able to trade larger positions.

“Sometimes I face a contradiction between my strategy giving me a signal and my intuition ”

Insight: Tough one, but you need to go with your strategy. Otherwise, you will never know its real stats and performance since you manually interfere in it. If you are getting a lot of these dilemmas, you might be doubting your strategy which is not good. We need to add to your trading plan how to handle these situations, maybe with special trade management for these specific trades.

Thank you Saul for the call this morning.

I found your advice to be very helpful which I plan to implement in my trading immediately.

Thanks again

Insights for forex traders final words

Some trading challenges are very common across many traders. Some of them are more sophisticated but some have a relatively simple solution.

We are happy to see the improvement in the equity curve of the traders who have attended a Portfolio Analyst meeting.

If you are a 5ers trader, you can also schedule an appointment with one of our portfolio analysts to share your challenges and get some feedback. Just go to your dashboard and save your spot.

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