• Mental Approach
  • Human Mind
  • Fear and Greed
  • The need to be Right
  • Creating a Plan

Trader Psychology

  • Trading psychology and the correct mental approach are key components of successful trading
  • Trader psychology is the control of the trader’s fear
  • Trader psychology is the control of the trader’s greed
  • In general, it’s the discipline to follow your method and stick to your money management

The Human Mind

The Human Mind

  • Our subconscious mind is the part of the brain that stores the majority of our thoughts, feelings, and habits
  • “Bad” habits are formed through repetition and are printed in the subconscious mind
  • These thoughts occur on a subconscious level, where the trader does not even realize this is happening

Trading Habits

Fear & Greed – The Problem

  • Fear in trading primarily takes one of two forms
    1. the fear of loss and
    2. the fear of missing out
  • The fear of losing can make someone hesitate to trade or to hang on to losing trades on the prospects of a loss
  • The fear of missing out compels people to enter the market  before they get the right signal from their system
  • Greed is the motivation for over-confidence – Dreams of “making it big very fast” can cloud a trader’s mind
  • Fear and greed are causing traders not to follow their method and money management


Fear & Greed – The Reason

  • Fear is a chain reaction in the brain that starts with a stressful stimulus  – the fight-or-flight response
  • The process of creating fear takes place in the subconscious brain and is entirely unconscious
  • They would play a tone and at the same time apply a shock to the metal floor of the rats’ cage – classical conditioning
  • Then began the process of fear-extinction training, in which they made the sound but did not apply the shock
  • After hearing the sound very often without the shock,the rats stopped fearing the noise

Fear & Greed - The Solution


  • Learn about the thing you fear: Loss? missing out? ridicule? Uncertainty is a big component of fear


  • Practice. If there’s something you’re afraid to try because it seems scary or difficult, start small and work in steps


  • Find someone who is not afraid – find someone who is not afraid of that thing and spend time with that person


  • Talk about it – sharing your fear out loud can make it seem much less daunting – admit you are afraid or greedy


  • Stop looking at the grand scheme – think only about each successive step

Not Accepting Losses – The Problem

  • The mind is conditioned to strive to be correct in any way it can – being wrong is considered extremely bad
  • E.g. a trader holding onto a losing position hoping that the market turns around so he doesn’t realize his loss
  • If the market turns in the trader’s direction, then the trader obviously made the right decision
  • Alternatively, when a position starts running in profit, they are fast to take their profits and close the position
  • By closing the position in profit, they can feel they have made the correct decision


Not Accepting Losses – The Reason

  • From our education system, we become accustomed to the habit of being rewarded when we do things correctly
  • People become conditioned to know that they are doing something right when they get the right answer
  • This conditioning creates the need to be always right and an inability to accept loss, as loss means you are wrong
  • In trading the reward system of the market goes against this need to be always right causing traders to fail
  • Loss generates powerful emotions such as fear, uncertainty, apprehension, and self-doubt


Accepting Losses – The Solution

  • Successful trading is not dependent on being accurate – profitable trading is based on balancing risk and reward
  • It is about allowing profits to run and closing losers early, not allowing them to get bigger
  • Being right and being profitable are two different things when it comes to trading
  • The first step in handling them is identifying the psychological barriers, and then changing our habits
  • We have seen many traders go from big losses and stressful days to steady profits with consistency
  • You are in a market where you can do everything right as per your method and still you can lose
  • Take a reality check. Losing is part of the game. The possibility to lose is always there – traders do lose
  • You can learn how to accept losses by re-defining the meaning of loss.  Don’t equate it with failure but learning
  • Consider losing as positive in the sense that it will improve your next trades. Find something new
  • If you prefer consider losses as business expenses – like a restaurant throws away unsold food but is still profitable

No Trading plan – The Problem

  • Everyone needs a trading plan and is a MUST for all traders regardless of their trading experience
  • Having a trading plan before starting to trade is much like having a map before starting to travel
  • If you are not doing well, it is because there is a problem with your trading plan or worse, you don’t have one
  • If you are trading without a plan, you cannot know what you are doing wrong and how to fix it
  • A trading plan outlines instructions of how to react under different possible scenarios


No Trading plan – The Reason

  • There is only one rational reason to trade — to make money
  • Money attracts traders to the markets, but in the excitement of a new game one can lose sight of the goal
  • Trading without a plan takes the responsibility away from the trader and leaves it to chance  
  • Trading without a plan and with unlimited variables, it’s easy to take credit for trades that turn out to our liking
  • it’s also very easy to avoid taking responsibility for the trades that didn’t turn out the way we wanted


No Trading plan – The Solution

  • The solution is to have a trading plan and follow it
  • Entry Signals : These are the conditions that need to be met in order to enter into a trade
  • Exit Signals: These are the reasons for closing a trade, either because a target was reached or a stop loss hit
  • Money Management : Is the amount to risk on every trade
  • Using a trading plan is what makes all the difference as it makes enforcing discipline so much easier

The Story of Desmond Leong

Desmond is your average trader. He started off blowing up 7 (or more.. lost count) accounts amounting to more than 500k, tested over 30 Expert Advisors (EAs) to no success and spent over 10k on stupid useless courses.

Today he runs an award winning trading team and provides market analysis and webinars to some of the largest brokers such as IC Markets, XM, Axi, Tickmill, FXCM, VantageFX, easyMarkets and more.

He now has a simple goal: Creating an army of traders who trade profitably together and keep each other accountable. Guiding them with the most comprehensive no-BS free tutorials so that no one ever needs to go through the pain he went through himself to become a profitable trader.

My Trading Strategy


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Trading in foreign exchange (“Forex”) on margins entails high risk and is not suitable for all investors. Past performance is not an indication of future results. In this case, as well, the high degree of leverage can act both against you and for you. Before you decide to invest in foreign exchange, you should carefully assess your investment objectives, experience, financial possibilities and willingness to take risks. There is a possibility that you will lose your initial investment partially or completely. Therefore, you should not invest any funds that you cannot afford to completely lose in a worst-case scenario. You should also be aware of all the risks associated with foreign exchange trading and contact an independent financial advisor in case of doubt.

Trading Derivatives carries a high level of risk to your capital and you should only trade with money you can afford to lose. Trading Derivatives may not be suitable for all investors, so please ensure that you fully understand the risks involved and seek independent advice if necessary.

Leverage enables traders, using a relatively small amount of money, to take a position that is many times the initial investment. This leverage effect can work both in your favour and to your detriment. The Forex market opens up the possibility to utilize this leverage effect to a high degree; at the same time, however, it also opens up the risk of experiencing high losses. Please trade with caution when you use leverage in trading or investing. Your risk is particularly not limited to the initial investment, but can quickly fall into a negative range in the event of strong movements, meaning you may be obligated to pay far more than your initial wager.