Calling day traders: I have something very interesting for you today. It’s a very interesting tool developed by one of my favourite traders: Jason Alexander. You probably already know Jason as the creator of Money Line, Renko Trader, Forex Fightback and AutoFX amongst many others. He’s been developing software and tools that help days traders to make serious returns for years. And Jason says he has developed a piece of software that he is calling the culmination of a life’s work. It offers a fascinating window onto the forex market. And from what I can see it looks a very sound method for making regular pips by following the trades of market makers. More on that story in a moment. But first, a question…

What’s the number one danger to traders?

Can you think of the one thing that can cause grown men (and women) to throw child-like tantrums and destroy entire trading accounts in a flash? It’s nothing technical. And it’s nothing to do with Donald Trump’s Tweets, or shock news of Chinese viral pandemics rocking the markets. It’s something much closer to home… The number one danger to trades is not keeping a tight rein on your own emotions. Trading, especially active short term trading, can create psychological pressure. The heat of the moment can get the better of you and the risk is you’re only ever one click away from firing-off a trade. Great if this trade is part of your plan. But a potential disaster if you’re in the process of losing your discipline by taking ‘revenge trades’ on the market. But, we’re only human. And so long as you live to fight another day, all is not lost. The important thing to do with any mistakes, or lapses in discipline caused by emotional overload is to take the lesson the market gives you with gratitude. The lessons that make you suffer a bit are usually the ones you needed to learn the most anyway. And trust me, when you experience them first hand you don’t tend to forget them in a hurry! But what can you learn from my experience – are there certain lessons I might be able to save you from experiencing first-hand?

Here are five common mistakes traders make that can snatch defeat from the jaws of victory

1. Not calculating the numbers. Have you ever jumped into a trade just because the chart pattern looked like a dead-cert, or because you’d just noticed an indicator go over-sold? Do you always take time to calculate the potential reward against the risk you’d be taking before jumping in?

Always calculate the reward:risk ratio on any trade to make sure you see a definite positive edge. It might mean standing aside on some trades that looked good at first glance. Also, make sure you’re accurately calculating your position size.  Even out your unit size, when you take a trade with a 50-pip stop loss you should be trading at half the stake you normally would with a 25-pip stop. Make sure you’re adjusting your trading size accordingly!

2. Gambling instead of trading. Are you trading by a set of proven rules? Do you know exactly when to enter a trade, when to move the stop loss, when to get out of the trade? Do you ever takes trades just because you want to feel busy?

Until you reach the point where you are perfectly in tune with the markets, where your subconscious mind is feeding you intuitive instructions based on years of study and time spent in the trenches, make sure you stick to the plan. Gambler’s luck tends to be short-lived in the markets.

3. Getting emotional. Don’t take it all personally. Easier said than done when money’s at stake, I know. But the market doesn’t care whether you win or lose. It is what it is.

Instead of fighting the flow learn to read price-action. It can tip you off to what might be ahead but trust me; no one has a crystal ball. If your trade takes a loss, move onto the next with a clear mind and a clean slate. Your biggest battle is with your own emotions and feelings not the market. And remember you are in total control here, you can CHOOSE whether to feel angry about losses. But you’re making it harder on yourself if you allow those emotions to affect your decisions.

4. Impatience. I think traders coming from a more traditional working environment (where you get rewarded for getting stuff done, by being proactive) can have a hard time adjusting to the right mindset for trading. It needs to be almost like fishing… where you throw a line out and wait. You can’t make the fish bite just like you can’t force a trade to come along. But it doesn’t stop certain people trying!

Learn to sit on your hands and take the trades when they come. There’s no punishment for standing aside until the time is right. In fact, the opposite applies: you’ll almost certainly suffer badly if you trade just for the sake of it. Or even worse… by trying to prove the market wrong.

5. Not taking profits properly. Take profits too early and you’re leaving good money on the table. If you’ve been going through a lean spell it’s common to start snatching at small profits as soon as they’re available. Try to maximise your returns from opportunities where the market breaks-out and offers you a free run. On the other hand, this doesn’t mean trying to wring huge returns from every single trade. Being greedy will always come to a sticky end.

Get good at scoping-out technical price levels you can use as profit targets. Fibonacci extensions, support and resistance levels, trendlines… they can all help you time you exits well. But I don’t think anything beats Volume Profile analysis for this

Now I’m sure that’s all stuff you’ve heard before in one form or another, but it certainly doesn’t do any harm to check up on yourself from time to time. Bad habits can have a way of sneaking in undetected. Do everything in your power to keep them at bay!

This “NexusFX” software helps you to grab 20-30 pips profit from these everyday moves

Which brings me back to Jason Alexander and his NexusFX software. As I said, Jason has developed this software over the last 12 years. And it’s based on a very simple idea… If you can spot when how market makers are trading, then you have a serious advantage over most traders. This is the ultimate way to recognise price action in the forex market. Spot what the insiders are doing, and follow the action. Jason has developed a piece of software that allows you do that: automatically alerting you to profit opportunity as market makers lay out their positions from day to day. If you are a forex trader, and you want to avoid the same mistakes as 90% of your peers, then its worth seeing how this tool works. Click here to read it now