One thing I often say about trading, every funded trader in the Funded Trader Program should take notes and highlight this, is to worry and to do something about the things you can control and not worry about the things out of your control.

Now as a funded trader you might be thinking: “how do I differentiate between the things I can and things can’t control?”

Well funded trader, don’t you worry, let us go through them.

A Funded Trader Can't Control Shocks Effects on Price Action

The thing you can’t control is ultimately price action. No matter what stage in your funded trader journey you reach, this is a reality you must accept. You are not looking into the future, you are working with probability. Hence why we constantly drill into you the importance of psychology, particularly mental toughness.

What I mean is, you could have your technical analysis spot on and have your fundamental analysis spot on as demonstrated by your chosen trades going well and performing as expected while you are sailing well in your funded trader path. However, the market may experience a shock that changes everything.

For example, there might be an unexpected Central Bank interest rate hike. Think that can’t happen? Think again, remember how GBP rose due to the Bank of England on the week beginning 13^th December 2021 (rates were expected to increase, but not during this month).

Alternatively, a government might make an unexpected announcement, as in the week beginning November 29^th, 2021, when oil and equities dropped due to Omicron resulting in travel restrictions in various regions that affected equities and spilt over in FX. Or, we might get geopolitical activity such as China reducing their demand for oil in June which affected oil and related assets.

As a funded trader, you are not going to see the future, you are not going to know about these shocks all the time. So do not take losses caused by the factors above, these shocks, personally.

Rather than being like most traders that revenge trade over random factors they could not control, you should focus on the things you can control. It is likely why you became a funded trader unlike most; or why you are likely to become a funded trader unlike many.

What A Funded Trader Can Control

1.When You Trade

A rookie mistake is thinking you need to trade all the time. Do not do this as a funded trader, you will blow the account as traders who do this tend to make trades without conviction.

Generally, you need a few good trades to excel. Now, for some funded trader programs. You may feel pressured to trade all the time. Especially if you are on funded trader programs that pressure you to do this, even if it is not overt with their pressure. The pressure can be in the form of their deadline, for example, if it is less than a year and they have trading rules such as prohibiting overnight positions or telling you when you should close positions.

This means you do not have the freedom to trade; CTI has no limits like this, check out the funded trader program.

2. The Stop Loss

This is a very big advantage that will cap your losses. The stop loss will ensure that you will always be in control of your MAXIMUM loss. If you find you are adjusting it to take more loss, you need to justify why; oftentimes you will find the justification is not really sound. Of course, there is nuance to this, but that is an entire subject in itself.

3. In a Similar Vein To Above, Another Edge You Have Is When You Can Exit a Trade

If you are not comfortable with a trade or feel the reasons you entered are not valid for whatever reason you are free to exit the trade to minimize your losses. You do not have to wait for the price to hit the stop loss.

Remember, you are in full control.

4. Your Trading Tools

The trading tools used in a trading plan will vary depending on the trader and as such you should tailor it to yourself.

Some traders prefer to use indicators to help guide their trading decisions while other traders have a preference for pure price action.

You also have traders that utilise a hybrid approach whereby they use a mixture of the two.

And there are many, many, many, many tools to choose from. Different indicators, and oscillators that measure hidden levels, momentum, sentiment and so on. These tools and include Moving Averages, Fibonacci, candlestick pattern analysis, support and resistance, ADX, RSI, Ichimoku, Pivot Points; these are just some of the many tools you can choose from.

I only went through technical analysis. You can even use fundamental analysis techniques which include basic tools like economic indicators, or look at actual economic data and try to understand what data is pricing is based on the current economic and political climate (we could do an entire course on this).

You can go further, some traders prefer to avoid lower time frames (1 hour and lower) while others prefer them. You can choose your trading parameters.

Overall, your trading tools can be molded and shaped to your personal taste.

5. How You Interpret Your Trading Experience; Your Psychology

Poor emotional regulation is why traders lose lots of money; hence why we wrote about why emotional intelligence could save your profits. Either due to the House Money effect or Revenge Trading. Emotions and psychology are pivotal to trading success, it can make or break you. You are in control of them, whether you believe it or not.

While it is hard to process at the time a loss is just that a loss, nothing more, nothing else. And it is bound to happen. Even Ray Dalio lost big because of the pandemic and some of the world’s largest hedge funds also lost big too(remember the things we can’t control).

With that in mind, do not get overexcited about a winning trade. While you should be happy, it is why we’re here. Do not get overexcited (remember the House Money effect), pocket the win and move on like business as usual. Treat trading like a job, your business. If you find it difficult to let go of the elevated feeling, take a break (or get in touch and we can talk about coaching if it is continually holding you back).

With the coaching in mind, we say get in touch with us if you feel your psychology is holding you back because we practice what we preach, hence we coach and educate traders of various backgrounds to excel or on how they can use their backgrounds to pass the funding, if they choose to go down this route.

If you want to learn even more ways you can tackle the financial markets then consider our Build Your Edge program. However, if you feel you need just a strategy, either to compare notes or to put you in the right direction, then consider either the STT Strategy (details) or the Corrective Strategy (details).

Please get in touch at: [email protected] or use the chatbox at the bottom right corner, should you have any questions!