How To Improve Your Trading Success - Part #1

Updated: May 5

February is here. Most of the new year resolutions are long forgotten, plenty of new trading accounts surely blown up.

In the past, I’ve started each new year with a small account challenge. I restart my trading accounts with just £1K every January.

Why £1K? Because that’s how much I had in my account when I started trading. But it’s also because most students only have small accounts. It forces me to be a better teacher — to focus on the process. And teaching the process is important. Forex trading tips and tricks, most effective forex trading strategy is what I concentrate on.

One of the biggest lessons I can give you is this…

To Do Big Things, You Have to Start Small

When you want to do big things, you have to start small. Whether it’s in the stock market or forex, giving back through charity, or any other part of your life … start small. Then scale up. Find what works.

Start Small and Focus on the Process

If you’re just starting as a trader, it’s better to start small. You shouldn’t expect profits right away. Instead, you should focus on learning. You should focus on demo trading using successful trading strategies. Focus on the process.

This way over time, you will improve your trading success.

So, my trading with a small account helps those of you with small accounts learn the process. And I’ll keep doing it.

But there’s also…

The Next Step...

In an ideal world, you learn how to grow a small account. But what happens next?

As you grow your small account, you gain experience. You gain knowledge. You get comfortable risking more on a trade. If you focus on the process and follow the rules, eventually you start making bigger profits.

And this is where trading can get really fun.

When there’s an amazing play, with big volume and the right catalyst (and you already have a solid process) it’s possible to make pretty incredible money.

It’s exciting.

Some Are Already There

It’s pretty cool that I now have students at so many different levels of experience. Yes, there are a lot of beginners. But I also have several millionaire students. Others trade with £500K, £200K, or £100K accounts.

For those students, watching me trade the last few years hasn’t been as useful as it is to those with small accounts. And I’ve thought about this a lot. More on that in a moment.


… I have a confession to make.

Trading With a Small Account Can Be Boring

I admit it. It can be boring. You have to remember I’ve been trading now for over 25 years. So while trading with a small account helps those of you with small accounts learn the process…

… I haven’t had my heart race much lately. It’s difficult to get really excited about a trade.

So I’m making a shift in 2020. To be better. On all levels.

Trading Plan 2020: Bring Back the Greatest Fun.

It comes down to serving everybody — all my students — in the best way possible. I’ll trade the small account so you can learn the process … and then

the big account for people with big accounts. But also for my own personal entertainment.

Plus, there will be more to give to charity at the end of the year, plus all those students that getting £25k accounts from me…

It’s an Honor to Give Back

Now, I've noticed something interesting: The Amazon rating for my book I Will Teach You How To Trade In 20 Hours jumps up surprisingly before settling back down.

Amazon ratings, for those who aren't familiar, weight recent sales more heavily than past ones, so a rising rating indicates recent purchases of the book. The jump in the ratings for my book indicates that there are a number of holiday purchases of the text. Since my book neither tastes as good as cheesecake nor is as fun to open as a gift basket, I have to assume other motives are at work with these new-year resolution purchases.

My best guess is that the buyers have the same concerns as many of the traders who have been emailing me: They have had a difficult trading year and want to get January off to a better start. Attending to their psychology is one way of making improvements; it's a kind of New Year's resolution.

The problem, of course, is that such resolutions--always so earnest in January--seem to lose their urgency, as the year gets under way. That doesn't mean that we shouldn't make resolutions. It just means that there is a large difference between good intentions and viable performance plans. My goal in this short series of articles is to help you take your trading resolutions and make them stick for the New Year. It's something I'll be doing with a group of professional traders in London, and I'd be honored to also be part of your turnaround.

Ready for a later than usual new start to the New Year? Let's go.

The Sense of Control

Some traders come to me angry and frustrated; others are depressed, anxious, or confused. The common denominator is that they experience the sense of

a loss of control over their trading. Think of it this way: If someone feels in control of something in their life, there's no way they're going to feel depressed or anxious over that thing. If I'm in control of my health, an illness will neither depress nor worry me. If I have control over my family budget, an unexpected expense will not prove upsetting.

What turns stress into distress is the perception that we no longer control something that is important to our well-being. If I lack control over my marriage, my health, or my career, the first result will be anxiety: I will become mired in doubt and uncertainty. If I continue to lack control over important aspects of my life, anxiety will turn to depression. The perception, "I don't think I can handle this" becomes "I know I can't handle it."

Our first goal in your turnaround is to regain a measure of control. It won't happen all at once or in all areas of your life, but any movement in the direction of greater control will help you feel more optimistic, more energized.

Depression is grounded in learned helplessness: the sense that one is powerless. Any constructive exercise of personal power helps dispel the helpless state.

A step-by-step strategy to regain control is far better than an unfocused, shotgun effort. Many people, fired up at New Year's to make grand changes, tackle large goals--only to find themselves frustrated by their inability to reach these quickly. It is much better to define smaller, achievable goals that you can build upon than grand visions that will take months or years to realize.

Your effort to take control expresses your fighting spirit: your determination to not let events control you. Even if that effort does not lead to a complete turn-around--and it usually won't--it is an important part of the psychological turnaround that precedes larger life turnarounds.

Take the example of Lance Armstrong in his book It's Not About the Bike. He describes in detail his reactions to learning that he had testicular cancer just as his cycling career was blooming. Each piece of news seemed worse than the last one: his cancer turned out to be late-stage; it metastasized to his brain.

Even the optimistic physicians gave him no better than even odds at survival and most assumed his career would be over, due to the toll that chemotherapy would take on his lungs.

Armstrong first took control by learning everything he could about his disease. He became a partner in the treatment process, not just a passive patient accepting a doctor's advice. The knowledge he gained helped him assemble a team of professionals to assist in his care, including some world-renowned physicians he would never have known about had he not educated himself.

When he was faced with a choice of who would ultimately guide his cancer treatment, he selected a physician who understood his patient's love of cycling and took the extra step of finding chemotherapy agents that would not devastate his lungs. During the difficult chemo process, he refused to use the wheelchair offered to him, preferring to walk on his own. When a nurse brought in a lung machine to test his capacity, he angrily blew into it as strongly as possible and told her to never bring the machine into his room again. He didn't lose his fighting spirit. Staying in control of the small things helped him deal with the big ones.

Finding Your Control

If there is a "cancer" in your life or trading, removing it may be as difficult as it was for Lance, albeit in a different way. The problem isn't going to go away overnight and may require wrenching life changes. Your control, however, like Lance's, will come from your refusal to let fate have its way. You can learn everything possible about your trading difficulties the way Lance made himself an expert on cancer, so that you become an active agent in your turnaround.

A thorough review of the year's trading results will tell you a great deal about where you made money and where you lost it. Most important, it will reacquaint you with your trading strengths as well as weaknesses. Very often, I've found, such reviews reveal that a relative handful of trading days made the difference between a dismal trading year and a good one. If so, you want to focus your attention on the common denominator within that handful of losing days--that is going to be the enemy we do battle with. Can you find ways to anticipate or avoid this enemy? You also want to focus attention on your big winning days: clearly these were occasions when you defeated the enemy. What was different in your trading approach on those days? What was different about your state of mind? Can you reproduce these?

One trader I recently worked with was near despair over his tendency to give back his gains. He felt that he had so many trading problems that he would need to find a different occupation. When we carefully reviewed his trading, however, a single pattern emerged: He tended to lose money on trendless days where his mornings started out poorly. He typically raised his size into the afternoon, facing even less opportunity. The result was that he would get chopped up with his maximum size.

Our initial strategy for gaining control was very simple: We treated the morning and afternoon as separate trading sessions and set a maximum allowable loss for each. This level was large enough to allow him to trade normally, but not so large as to prevent him from recovering from a bad start to the day. Finally, we created a rule that his initial position size could never be raised to his maximum if he was down money. In other words, he could only use maximum size when he was trading well, not when he was in the mood for revenge. I helped him monitor the following of these rules and, before long, they became positive habits. As he stopped the large losing days, he saw the results in his bottom line--and in his enhanced feelings of confidence and control.

This example is not unusual among good traders in slumps. What seems like an overwhelming set of problems is actually a single pattern that recurs in different ways, at different times. If the pattern can be broken, surprising changes can result, because it's the pattern--not basic trading ability--that is the problem.

The first step of achieving control is simply figuring the pattern out: learning everything you can about the problem so that, like Lance Armstrong, you can find the right kind of help--and the right helpers. Even if your first step is nothing more than stopping what isn't working and focusing on what you're doing well, this will begin the process of putting you in the psychological driver's seat.

As one trader put it when he began to regain his sense of control, "The problem is my pattern (of overtrading); I've been telling myself that I'm the problem."

Separating you from your problem is the first step toward mastery.

In the coming articles in the series, we'll look at the next steps.

I'd love to find out what your story will be.

Good Trading,


1 comment

Dominik Stone

Disclaimer: Any Advice or information on this website is General Advice Only - It does not take into account your personal circumstances, please do not trade or invest based solely on this information. By Viewing any material or using the information within this site you agree that this is general education material and you will not hold any person or entity responsible for loss or damages resulting from the content or general advice provided here by Dominik Stone, it's employees, directors or fellow members. Futures, options, and spot currency trading have large potential rewards, but also large potential risk. You must be aware of the risks and be willing to accept them in order to invest in the futures and options markets. Don't trade with money you can't afford to lose. This website is neither a solicitation nor an offer to Buy/Sell futures, spot forex, cfd's, options or other financial products. No representation is being made that any account will or is likely to achieve profits or losses similar to those discussed in any material on this website. The past performance of any trading system or methodology is not necessarily indicative of future results.

High Risk Warning: Forex, Futures, and Options trading has large potential rewards, but also large potential risks. The high degree of leverage can work against you as well as for you. You must be aware of the risks of investing in forex, futures, and options and be willing to accept them in order to trade in these markets. Forex trading involves substantial risk of loss and is not suitable for all investors. Please do not trade with borrowed money or money you cannot afford to lose. Any opinions, news, research, analysis, prices, or other information contained on this website is provided as general market commentary and does not constitute investment advice. We will not accept liability for any loss or damage, including without limitation to, any loss of profit, which may arise directly or indirectly from the use of or reliance on such information. Please remember that the past performance of any trading system or methodology is not necessarily indicative of future results.

© 2020 Copyright Dominik Stone International. All rights reserved.