How to Get a Trading Edge

To be succesful at trading, you need a trading edge. A trading edge is the advantage you have over other traders due to having a consistent trading method that gives you favourable odds.
There are 3 key things you can do to get an edge. They are:

• Think Probabilities
• Eliminate Expectations
• Be Consistent

Think Probabilities

Because each trade is unique and has an uncertain outcome, we know it's not possible to predict how any individual trade will work out.
On the other hand, if you have a trading method that gives you predictable and favourable outcome over a large number of trades - then you have an edge.
It's how gambling Casinos make so much money. They cannot predict the outcome of individual bets, but they know that over enough bets, the odds are in their favour.
Harmonic patterns are the best way I know at the moment of achieving a trading edge. Harmonic patterns are over 70% succesful. They have been proven for over 75 years - and recent systematic tests have shown success rates in excess of 80%.

You can read more on this at Trade the Probabilities. And more about harmonic pattern success rates here.

Eliminate Expectations

It is clear that there is no way to predict the outcome of any individual trade. But you can predict the outcome of a series of trades over time if you have a trading method that you know gives you an edge.
If you accept that, then trading is really a probability or numbers game, and it is futile to have expectations of any individual trade. Expectations, intuitions and beliefs just get in the way and cloud your judgement - at the very time when you want to be crystal clear and objective.
And yet many traders convince themselves somehow that they "know" which way a trade will go. Call it intuition, belief or hope - these expectations only exist in your head, and are nothing to do with the real world and whats going on in the market.
In my trading, I try to not have any expectations or pre-conceived ideas about an individual trade. I just try to observe what happens and be "in the now".
There's only one way I know how to handle that.
That is to have a few clear and objective rules about how to enter a trade, and how to manage and exit a trade. That type of objectivity contributes to your trading edge.
You can read more about Trade Entry and Trade Management here.

Be Consistent

What do you do if you have a string of losing trades? Look around for another trading system? Try another indicator?
The problem with being inconsistent is - you'll never give yourself a chance to find out if you have edge. And so your trading results will inevitably be - inconsistent.

When I lose in my trading, even many times in a row (I have lost more than 20 trades in row before now, and, probably will do so again), I stick with the same harmonic trading strategy. I don't change my trading rules or trading behaviour at all. My trading edge comes from the fact that I know probability is on my side, and the harmonic trading methods I use help me keep my trading losses low.
There are a couple of simple things you can do to help you become more consistent:

• Have a trading method that you are confident identifies "edge" opportunities
• Always determine your risk / reward is acceptable before entering a trade
• Be objective in your trading. Don't let emotion or intuition get in the way
• Have a set of rules for entering and exiting trades - and stick to them

How to change your trading habits

If you have fully accepted the reality of what is possible given your account size and effective risk management, then you can start devising a concrete plan to change your trading habits, or if you are brand new to trading, develop the proper habits. The first thing you need to do is be sure that you know exactly what your “edge” in the market is and how to trade it. If you haven’t mastered an effective trading strategy yet, you should check out my price action trading strategies, as they can provide you with high-probability entry signals by learning to analyze and trade the natural price dynamics of a market. After mastering an effective trading strategy, you need to plan out how you will trade it. You should design a comprehensive yet concise Forex trading plan on your computer and print it out. This plan will be your guide for how to interact with the market; by pre-defining all aspects of your trading you consciously eliminate the potential to turn into a greedy trader, assuming you follow your trading plan of course.

Why discipline is essential to becoming a consistently profitable trader

Forex trading obviously requires a high degree of discipline, most all traders know this, whether beginner or pro. However, knowing is different from doing, and while most all traders know they should be more disciplined, it often ends up being something they think they can put off until they make X amount of money. Trying to rationalize in your head not being disciplined is one of the biggest mistakes that almost all traders make at some point. I know how it works because I was once in your shoes. You probably have thought something like this recently, “I’ll start to become disciplined and manage my risk better once I get my account up to X amount of money…” Sound familiar? I’m willing to bet a lot of money that you thought that exact thing at some point or still think that. Almost every trader has.
The problem with thinking you can put off being a disciplined trader until XYZ happens is fairly obvious, yet most traders continue to do it. This is simply a mistake born out of greed, and greedy traders do not make money over the long-run. If there is one thing that will destroy your trading account faster than anything, it’s greed. A greedy trader trades too much and risks too much per trade, over-trading and over-leveraging are the two main reasons why most Forex traders lose money. In my opinion, trading almost naturally induces greedy behavior in traders due to the constant temptation of easily being able to make fast money by just clicking your mouse. Thus, for almost all people who trade the markets, a conscious plan to fight greed before it consumes you is necessary if you want to become a successful Forex trader.

Why do people fail as forex traders?

It's quite amazing to discover that over 90% of those who begin their trading career lose their trading account within a short period of that. When I got to discover this fact, I was afraid of trading the forex market. Of course what's the use trading a market when majority of those into it are losers. I grew sceptical of what would be my fate if I eventually trade the market. But a thought flashed into my mind as I was about giving up the idea of taking forex trading as a career. The idea that flashed into my mind was, despite the fact that 90% are losing, then there must be about 10% of traders that are making all the money in the market. Also I compared that to any conventional business. In most conventional businesses, about 90% of people who begin a business lose and end up folding up the business. After my comparison, I thought to my self that it is quite possible to join the 10% of trader that are on the winning side. Through research and practice, I got to sift out the major reasons 90% of trader loss their trading account fast.
From my findings I noticed that the losing traits exist in the 90% of traders that are perpetual losers. If you can get rid of these traits, there's no reason why you can't succeed as a forex trader.
Below are some of the traits I got to discover. Take your time to study them thoroughly and I believe that together, we shall smile.
Trait Number 1: Jumping From One Strategy To Another.
Most beginner traders are in the habit of moving from one trading strategy to another. The major reason behind this attitude is because, they hardly spend time to develop their trading system. When they encounter a string of loses, they jettison their trading system and go in search for the next best forex trading system they can find. When they encounter another string of loses as a result of implement their new system, they eventually jump ship and lot for any advertised trading strategy that promises 100% profit in return. When a trader moves from one system to another, he would eventually lose focus and that alone can kill your trading account fast. In forex trading, there's no holy grail. You need to sit down and develop a strategy until you are comfortable with it. That is why it is highly advisable to demo trade first before you start trading on a live account. Another disadvantage of jumping from one trading system to another is that you eventually lose confidence in your ability to trade well.
Trait 2: Poor Money Management:
Bad money management is a disaster that many new traders experience in their journey toward become a millionaire trader in one day. Lack of proper understanding of this subject is the reason why there are more losing traders than winners. To succeed as a trader, you must know what money management is and how to adjust it into your trading plan.
Trait 3: Not Using Stop Loss
This is a common problem with many new traders. They expect to be right all the time and so they feel that it is a crime for them to lose a trade. In their pursuit to win al their trades, they don't use stop loss and so they leave their trading account exposed. The purpose of stop loss is to protect your trading account in case there is a move that goes against you while trading. What most traders think is that the market would always reverse and move in their favour so they will keep a trade open and wait. Most often than not, the never move in their direction, instead the market continues its journey against their trade. If this happens for a long period of time, it would eventually wipe out their account. There are time some traders are lucky to win trades without stop loss. But be rest assured that if that kind of system continues, their account would soon be gone forever.
Trait Number 4:Get Quick Rich Scheme: Many beginner traders think that the forex market is an avenue to make big money in a short period of time. As a result of their belief, they enter trades with big lot size and expect to make 100% profit in a day or a week. When they are disappointed as a result of what they see, they begin to complain.