Hi There

I have said in one of the previous blog posts that people are not successful with trading because they don’t understand what it is all about.

I think there is for most people a huge disconnect between what they hope they can achieve in short order with forex trading versus the reality.

To overcome this you need an approach and attitude that is supported by the structure of the Slow Grow to Pro program.

I want to illustrate this for you with a real life example from the fascinating world of sports training, particularly golf.

Little kid golf

My eldest daughter, at 11, is one of South Africa’s top age group girl golf players. She has been playing competition golf since age 9 and some of her achievements are qualification to play in some US kids tournaments, SA o12 Provincial Team Championships and provincial primary schools team championships.

I am not a golfer. I can count the number of 18 hole rounds I have hacked through on one hand.

Recently I realized the only way forward would be for me to become a golfer in order to create many more opportunities for her to play in a friendly competitive environment – at least once a week.

That meant I had to take up golf.
I needed coaching.
In fact I needed new clubs.
I was a scratch golfer. Starting from scratch!

So I signed up for a series of lessons with her coach, I bought beginners clubs and I joined a training facility with a driving range and pitching and putting areas where you can hit as many balls as you like or can per day, every day.

From the above you might imagine that I had very strong motivation. Its for my kid, what more motivation do you need?

I was determined to make this work. And I was in quite a hurry. Let me also just add that I had a modicum of ability. I am generally OK with any ball sports and I have good “ball sense” from playing everything since I was a kid (rugby, cricket, tennis, squash, table tennis (university level)).

So I set goals which basically were to get up to Danielle’s level by February 2011. Come the new year we must play regularly and it must be competitive.

I started in August. By early October I became quite adept at hitting the ball on the driving range and by mid November we had a 9 hole Parent-Kid tournament, playing alternate shots. Due to rain I couldn’t get a practice round in so I pretty much teed up on the first hole of a competition very much like a new forex trader sits in front of his computer with his brand new trading account, funded, opened and ready to go!

By this time I had about 80 hours of range practice during a 8 week period. If I am dedicated I am dedicated. No shortage of motivation or ability to make it work.

I have visualized and seen on the range many a great shot I have played. Hitting my first drive to the best of my ability down the middle of the fairway was a matter of “swinging the club”.

So I thought.

As I stepped on to the tee box and teed my ball up I literally felt the most ridiculous (I thought) stress. Well, this is new. You better shake it or you are going to shank (hit it 45 degrees from the target line) it went through my mind. I made three or four practice swings, following my procedure, including visualizing my shot sailing through the air to the middle of the fairway just like a pro.

But I could feel the nervous tension.

Boet, if your backswing is not right this is going to be a disaster.

Time to play.

As I pulled the club back I knew … well, at least I didn’t shank it, but duffed it 70 meters to the left rough under the trees …

Not part of the plan.

Danielle tried hard not to roll around on the ground laughing. I had to remind her I am on her team!

Bottom line is, my five tee shots went like this:

In between I hit a few OK shots but generally I was very disappointed with my first real competition round of golf.

The idea to write about this in the forex space came on that day.

This was a real life experience that so many of you go through or still have to go through. Idea. Goals. Determination. Preparation. Activation. Execution. Oooops. Try again. And again. Its much harder than it sounds. Its so easy on the practice range.

Let’s consider a comparison between golf and forex trading as far as goals and the realism of it all is concerned.

Levels of golf ability

1. Beginners, up and coming young players.
2. Regular weekend players
3. Serious amateurs, league & provincial players
4. Teaching and club professionals:

This group makes a living with their golf. They are also very good players. Danielle’s (and my) coach is a 20-something professional player, who can at any time walk the talk.

5. Top Professional players:

Generally these are the players who are financially free due to their golf prowess. Tiger Woods, Lee Westwood, Ernie Els, Bernard Langer and Y.E. Yang, Graham McDowell.

Let’s turn to forex and typical retail forex traders’ goals

According to my research most people are involved in forex trading to add a non-work related revenue stream, even to escape the “rat race” or to save for their retirement (when they can also continue to trade).

In other words compared to golf they pitch their expectations at least on the 4th level of golf ability. And many thousands aspire to “financial freedom”, that what only a few hundred golf players really achieve.

Yet, apparently, if you compare what they (the aspirant forex professionals) do in preparation to achieve this level of competency they aspire to, a golfer would probably do the following:

The time frame for all of the above? Three months? Six months? Twelve months?

Again, it isn’t a perfect comparison but there is undoubtedly a serious disconnect between the lofty goals retail forex traders set and the road they apparently believe will get them there.

It borders on the absurd.

People are not born traders, just as they are not born golfers.

You can become a good trader, just like you can become a good golfer.

But you need more than motivation. Essentially you need on your level the determination and the preparation and the willingness to do the hard slog. And that in most cases include lots of time.

Trading has certain peculiarities which actually make it possible in many cases to fast track success.

I don’t suggest that 100% of people will have to walk a long and arduous road to trading success like professional golfers have to, but you will agree with me that generally a few weeks or a few months from “hearing about forex trading” to “consistently successful trading”, i..e making some decent return on your investment like a club or teaching professional in golf is far from realistic.

The most unrealistic is that people want to do this without the frustration and pain, without the hard slog.

They want the Big Easy*** but not the hard slog.

Luck plays an important part in trading.

One of the greatest golfers of all time, Gary Player, said “the more I practice the luckier I get.”

Remember that for your trading.

Kind regards

Dirk

***The “Big Easy” is the nickname of the top professional golfer Ernie Els. He is a big person with an easy going demeanour on the course and absolutely effortless, “poetry in motion” golf swing. He is also financially free with golf prize money winnings in the region of $50 million, excluding sponsorships and endorsements. When he won the US Open and became world number one in 1997 it was after years and years of the hard slog to eventually lead to the “big easy”, being financial free.

Be on the lookout for my announcement of the Slo Gro to Pro mentor programme details. The most realistic and cost effective route you can take to “the big easy” according to your goals.

Hi There

I have already given you some snippets of how relational analysis contribute to the success of the 4×1 (+1) trading strategy with my analysis of the EURUSD and the real time call of the mid-year low.

I got a question a day or so ago which basically said, “yah-yah but what did you do the last few weeks with the euro topping out above 1.4200 and bottoming at 1.3000.” In anybody’s book that is a big move, but not uncommon these days amongst major currencies.

Good question and I am happy to answer as follows:

I am going to give you a slightly edited version of my Monday Briefing of Monday November 8th. This ‘Monday Briefing’ will now become a Weekly Briefing in the Slow Gro to Pro programme. Its purpose is to show you more of the power of proper relational analysis (as done in real-time by the proprietary owner of the concept “relational analysis”). Read the rest of this entry

Hello

In the area of online business development and marketing I have done this numerous times and I will probably do it a few more times because I am here to stay.

But the question is if it is beneficial and is it optimal to work like this? The answer is clearly “NO”.

Even though you can successfully argue that you do move forward, jumping from one product or strategy or method to build your business to another and making complete U-turns in some cases, grab here, leave there, eventually you are in a one-step-forward-and-two-steps-back loop.

A while ago I have unsubscribed from almost all the online business email lists I was on, I have chucked all the programmes (you know how it works, you bought something so you stay on the list even though all you get is more affiliate product offers), canceled subscriptions – even serious guru’s – and decided to stick to ONE!

One I could identify with, I feel we share some values and I feel he has more than his own interest at heart. Another thing is I can recognize value. And what he offered was really valuable and dirt cheap. I knew (and know) if I contribute what I can the monthly subscription I pay would be the bargain of a lifetime.

In the blink of an eye the results were there: clarity, purpose.

Where I was in a perpetual state of uncertainty about what to do next, where to focus everything was just like so obvious. I am not talking specific instruction. To tell you the truth I haven’t even read half of the stuff I have received since then. The decision to go from the many to the one was the crucial point.

Trading history

I ask my personal mentoring clients since many years ago about their “trading history” including their training efforts or what they did to build expertise. There is a wealth of information once you begin to analyse and compare these histories.

At this stage I want to consider one of the most crucial results. Read the rest of this entry

Hi There

In April 2010 the annual FX Street Trader of the Year 2010 contest was launched.
The 2007 winner and runner up, and the 2009 winner were my clients, BWILC owners & people I had mentored.

This year I decided to see if this was just luck.

So I put out a challenge.

“My guys” can dominate this competition and I can prove it.

I put my trading philosophy and for all practical purposes my business on the line.

I didn’t intend to send a seasoned A team of mentoring clients to this challenge.

No. I would send newbies.

The FX Challenge Preparation Programme

In order to prepare participants for the “FX Challenge” I took important sections of my personal mentoring programme and reworked them into a new non-personal programme.

We had about three months to prepare for the FX Challenge and the FX Challenge was a live account trading competition that lasted for 8 weeks.

I said at the time that it is important to know that there can only be one first prize winner but there can be many winners if you use the competition correctly.

When I pondered the content of my first attempt at non-personal training I decided to skip the very important first phases of the mentoring programme and go straight to the 4×1(+1) strategy and the median trading methodology.

Group wisdom with guru sauce.

Like in my personal mentoring programme I gave the participants tasks to complete and then I made compilations of their responses, I responded in the compilation document to some of their questions and added some corrections and made some additions and general remarks and then I provided the compilations to the participants.

While this was happening I also provided them with a Weekly (Monday) Briefing and some of my other Daily Briefings and market summaries. Obviously one of the main issues for newbies is “what to use” and what not to use. What to ignore and what to incorporate? I helped with that.

There was a discussion forum where I encouraged discussions of the issues and made my own contributions. Here I posted several relevant articles I thought would be useful, always keeping in mind the problems of information overload.

This is the only way you can teach relational analysis. Real-time.

I also added a “trade reporting” function. Everybody could report their trades on a daily or weekly basis and add maybe a few notes about the rationale of what they did. This was really a hit. And it contributed a lot of value to see what others were doing and how they went about implementing their 4×1(+1) strategy.

The FX Street 2010 Trader of the Year Contest

The following numbers are approximations. I have not tried to verify the details.

There were around 240 registrants in the live trading competition. I have no idea how many eventually did trades. Of these about 60 (25%) were my clients (FX Challenge Preparation Programme & Class of 2010 mostly).

As far as I could see of these 60 about 20 eventually did some trading in terms of the competition. (I was completely hands-off during the competition.)

The results of the competition after 8 weeks of trading were: Read the rest of this entry

Hi There

A few years ago two Harvard psychologists studying perception and observation did a famous experiment.

They set up a basketball court with two teams of people passing basket balls around. The one team had white T shirts, the other black. They made a video of this.

The video had a twist.

At some point a student in a full gorilla suit entered the court, stopped, faced the camera, beat its breast and left after spending nine seconds on the court.

The researchers then showed this video to Harvard students and asked them to silently count the number of passes made by players in white T shirts only.

After the video was shown to students they asked them if they saw anything extraordinary?

Half of the students didn’t see the gorilla. Read the rest of this entry

Hi There

In this short series of blog posts I am looking at important changes in the forex trading space.

I made the point that most beginners can’t do pure technical analysis. Their charts must be named. Why? Because of the need to put it in the context of fundamentals and market dynamics. Experienced (professional) technical analysts generally do this ‘subconsciously’ – automatically. They have a contextual understanding in which they embed their analysis to interpret it and make sense of it. As a result they can see, hear and feel the charts imparting sensible messages.

It goes without saying that beginner traders don’t have this. Yet, instead of doing pure analysis, just with the data, they want the names, they want to embed it but they don’t have the fundamental knowledge and understanding of market dynamics to really see, hear and feel the charts. And this is why the majority of traders fail.

They have, due to this impenetrable convention that technical analysis in ultra-short timeframes works, things upside down. Marketing wizards needs trades. They have designed, shaped and formed this forex space to efficiently get Mom and Pop traders to trade in the most efficient way for them (the marketing wizards). So everything from the point of view of the new Mom and Pop trader is upside down, wrong side first, inside out.

Thus you are bombarded with the idea that your entry ticket to successful trading is technical analysis of intra day charts.

In reality your entry ticket should be a thorough understanding of the driving forces behind currency prices and the market dynamics these forces unleash. Both in a macro and micro context.

My objective in these blog posts is to show you that in order to make serious progress in your forex trading you need to enter into an elevated and continuous discussion with me regarding these driving forces behind currency prices and the market dynamics they unleash.

Once you understand it your charts (if you still need them) will be speaking volumes in clear, crisp language to you.

You will see things that have always been there but that you just missed.

Today I am going to give you a taste of what this means.

Click here for more on forex hurricanes and typhoons

Hi There

If you go to 100 websites promoting the trading of currencies (forex; foreign exchange) you will have a hard time finding any (excluding my websites) that don’t promote technical analysis as the key to your conquest of the forex market. In fact, if you dig a bit deeper you will find that almost all of them promote the application of very, very short term technical analysis as the key to success. Or, let me say it like this: the shorter term your approach the more you will struggle to find any service that doesn’t rely on technical analysis.

This notion that technical analysis is the be all and end all, the alpha and the omega, the beginning and the end of the approach a new / beginner trader should follow to become a professional trader is like a mega vault no one can penetrate.

If you, like me, believe it is wrong and you want to change it, you want to get in that vault and in those minds that have been brainwashed with this hogwash, it feels like trying to cut a diamond with a wooden letter opener.

It feels like you waste your time. I have despaired about this. At times I wanted to give up. Close down and just trade my account and ignore this whole farce.

BUT this morning I made a breakthrough in this regard. I think it is huge. Read the rest of this entry

Marketing wizards, as opposed to, market wizards, dominate the retail forex trading industry primarily because it is so synonymous with the growth of the Internet as a communications tool and space. Understanding these developments is very important for anyone who would like to make a business of trading currencies.

The majority of people who investigate forex trading want to make money by trading their own funds. That is the business they want to enter: Making money by buying and selling foreign exchange.

Like anyone considering a new part-time / full-time business venture there are a series of questions one asks at the beginning. What can I make? What must I invest? How much time? How do you do it? Read the rest of this entry

During the last few months the much talked about new US retail forex regulations regarding leverage were promulgated into law and while the margin requirements were hiked with 100 – 500% despite the protestations of the beneficiaries of high leverage there were some other hurricane like regulations slipped in that really affect everyone from US citizens to everyone else who were over the last 10 years lured to trading with US companies.

In January 2010 the US regulator of retail forex trading, the CFTC, threatened to raise margin requirements 1000% and consequently drop the attainable leverage from 100:1 to 10:1. At that time I have posted on my blog that it is a done deal, the regulator will increase margin requirements substantially, irrespective any protests and people should rather focus on trading within the lower leverage environment.

Fast forward to 21 July 2010 and the announcement of the Dodd-Frank Bill which is supposed to regulate “Wall Street” and what do we see?

Retail forex trading in the United States, and for United States residents, experienced a paradigm shift with the lumping of retail forex regulation together with regulation aimed at the “too big to fail” banks after the financial catastrophe and bailouts of 2008.

The general gist of the Dodd-Frank law is that Read the rest of this entry

Hi There

My book Bird Watching in Lion Country (First Edition) and my mentoring programme produced three out of three top places in one of the most prestigious real money trading competitions around, the FX Street Forex Trader of the Year international trading competition.

In 2007, towards the the end of the trading competition, I was made aware of the fact that the leading two participants were actually readers of BWILC and one of them was on my mentor programme. Obviously I was delighted. They ended first and second. As a consequence I was invited to speak at the next (2008) FX Street Barcelona Traders’ conference. It was a privilege and a pleasure.

In 2009 FX Street asked me if I would offer some prizes for the competition and I offered two mentorships valued at $1,990 to the worst performers. Both those prize winners are now on my Class of 2010.

About two thirds through the 2009 competition one of my mentoring clients informed me that he was in the competition and doing well and he told me he thought he could win it. Five weeks later he was declared the winner.

I have ambivalent thoughts about trading competitions. Read the rest of this entry