Lesson One, how beliefs shape your trading. Welcome to Lesson One. My name is Sam ADA. I'm a global macro Currency Trader and the owner of FX renewed calm. And this is the advanced forex course for smart traders. You don't trade the markets you trade your beliefs about the markets.
As a forex trader, you have the freedom to make your own decisions. You are not constrained by school teachers, bosses or parents. The limitations on your decision making are internal, your knowledge, your skills, your belief system. In this course, we tackle all three areas. But we start with the foundation, your beliefs, and the markets beliefs act as a filter for your trades. For example, if you believe that forex trading is risky, you may not place trades when you should.
If you like a chart pattern, you might place a trade based on that chart pattern. If you believe in not taking losses, you might not use a stop loss. So on these statements are beliefs, they are not judgments. They are simply the way you operate rightly or wrongly. your beliefs guide you along the rocky path. your beliefs are like a Sherpa, guiding you on the decisions you're making with your money.
But the chances are your beliefs have never been optimized for trading, and many of them may be counterproductive. For example, they may cause you to hold on to a losing position to avoid taking a loss that may cause you to over trade on your account and pay away your profits to the broker. Or they may cause you to close winning positions too quickly without holding on for the big ones. counterproductive beliefs tend to be the ones that hold the most charge. Difficult to let go of these beliefs have developed out of a painful or formative experience or are perhaps ingrained in your culture as accepted wisdom. But the wonderful thing about being human is that ultimately you do have conscious choice.
Once you recognize you have belief, you can change it, you can upgrade. And if you choose to renew your beliefs, why not choose the very best ones? Where to find those? We look to the masters. We look to the very best of us in our chosen field and we model what they do. Ray Dalio said truth.
More precisely, an accurate understanding of reality is the essential foundation for producing good outcomes. Perhaps the most important point in this lesson is that not only can you choose your own beliefs, but you can choose them purely because they are the most useful belief to hold at the time. You don't even need to strongly believe the belief at first. For example, if you're skeptical about this lesson, and the impact beliefs have on your forex trading, then perhaps try this belief on for size. By having the beliefs of successful traders I'll be safer and smarter with my trading decisions. Be prepared to try and beliefs like you might try and hit keep the ones that fit and provide a benefit to your forex trading and discard the others.
You can even Put a belief aside for a while, say a week and then bring it back again. How to change your beliefs. Changing your beliefs can be easy or it can be difficult. The path we take in this course is first awareness of existing beliefs and the knowledge of new beliefs. Some beliefs can be changed simply by knowledge of a new and better belief. You learn about a new belief in this course, and you decide that you would like it and it becomes part of you.
Occasionally, there are beliefs that are difficult to change. These are often emotionally charged or stuck beliefs. You can tell this by the level of resistance you have to changing the belief. If you notice that you feel like you don't need to change a particular belief. The thought of changing it makes you angry, or the belief causes you losses in the market, then perhaps it's a stock belief. These beliefs may require more work and I suggest you read Ben Tharp's trading beyond the matrix to give you a more in depth, understanding of the techniques for dealing with stuck beliefs.
Remember that resistance Changing beliefs could be a sign that you have a belief that needs changing. Be very self aware anytime you have resistance. What are your beliefs about the market? In the next lesson, we will list the beliefs of top traders. In this lesson you need to gain awareness of your own beliefs. The first step is to list your own beliefs about the market.
Don't get too fast or over analyze, simply write down 30 or so things that you believe about forex trading. You can use the beliefs worksheet in the supporting materials section of this course. Here's a list of different beliefs to get you started. If I hold my forex trades for the long term, I will make money losses are bad losses are good. I need at least a risk reward of three to one on each trade. I don't know how to trade forex.
Following technical analysis, I will be able to make money from forex trading. The markets are impossible to predict over the long term, the markets are impossible to predict over the short term. I trust my broker, and so on. Once you have written down your beliefs you then ask The following question of each belief, what do I get from having this belief? For example, I might analyze the belief I only need to know technical analysis to trade forex, is the fundamentals are too hard to predict in this way. What do I get from this belief, I can avoid following the news.
I can keep my trading simple. I need to learn more about analysis. I can follow what my favorite guru says about forex trading, which also makes me feel comfortable. I can be very precise and disciplined in my forex trading. I can backtest on my charts easily. by listing your beliefs in asking this question, you start to become self aware, you can begin to say how the beliefs you have run your life and your forex trading.
You can also start to discern if a belief is useful to you or not. Once you have awareness of your current beliefs, the next step is to give you knowledge of a new set of beliefs, the beliefs of top traders With this knowledge you can pick and choose what beliefs you wish to keep, and what new beliefs might serve you better This is the subject of lesson two. Until then, use the worksheet to list as many places you can. Some people are able to do this exercise with ease. Others struggle to find beliefs to list either way is okay simply do your best. I'll see you in the next lesson.