Hi Guys & Girls,
If you’ve attended any of the classes I’ve taught in the past you may have heard me talking about “Trading On The Edge”. If you haven’t, I can assure you it may not be what your thinking as it has nothing to do with being a big crazy risk taker.
What I’m talking about is the way you look at your charts. If you open any chart right now the market price action is considered to be on the “Left Edge”. What will happen from now on is on the “Right Edge” of the chart and is currently unknown.
In other words, you won’t know what the “right edge” of the chart will look like until it’s happened and at the point it will be now part of the “Left Edge”.
I hope I didn’t confuse you on that one! 🙂 I almost confused myself. 🙂
Anyway, here’s the danger in all of this…
Odds are you bought a trading program and on the web-site they showed trading examples of where they got in and got out. For example, look we bought here and sold here for 85 pips. On another one we got short here and exited here for 103 pips.
After a bunch of these examples if you are like I was, I would be salivating at all the easy money to made.
You see, when you look at chart setups from the “Left Edge” perspective it looks easy as you have the benefit of 20/20 hindsight.
The problem is that if you looked at any of those trades at the point that they initially setup from the “Left Edge” perspective it would be a very different thing as you would have no idea that this trade would work out so well.
This is why traders get their ass kicked when they start trading for real money as they no longer have the training wheels that studying from the “Left Edge” provided. This quickly leads to doubt, fear and lack of confidence.
So what can you do to conquer this? SIMPLE…
When you learn any new strategy make sure that you don’t do this… What traders do is they learn the rules for the setup and then start scrolling back through a chart until they find one. At this point they say wow it worked or it didn’t work.
But they are viewing the end result from the 20/20 hindsight perspective of the good ole “Left Edge”.
So all you need to do is drag your chart to the right to go back to the exact bar of entry. This way you can’t see what will happen and it gives your eyes and brain the chance to see what things will
look like in real-time.
It’s the only way to get a realistic feel for things. Another thing you can do is… Some programs have the ability to go back in time on a chart and then you can replay it bar by bar at a sped up pace. This gives you a realistic way to learn.
A tip for this would be is bring up charts you don’t typically look at and pick a random start date so that you have no idea what’s coming up.
I know this my sound like common sense but even after 20+ years I still fall into this trap from time to time. I can promise you that making this one small change can reap huge benefits over your trading career.
Good look and stay safe… Jeff