There are many posts on BabyPips about reference material covering this topic.
Three that I swear by are:
Trading in the Zone - Mark Douglas
Trade your way to Financial Freedom - Van K Tharp
My most recent read: The Naked Trader - Robbie Burns trading diary
this listings are they books or we can find them here in babypips
Yes, I should have been more clear and said books instead of “reference material”. A title and an author implies it is a book.
Try typing “Trading in the Zone - Mark Douglas” into a search engine and see what it comes up with. About 21 million results to choose from.
Traders on youtube rarely talk about what is going to happen, but show only the past. This is very convenient, as magically most of trades are profitable and almost each strategy gives positive results 
I have a feeling (opinion?) that most traders do not talk about their experience, just repeating theories and “tribal knowledge” from the internet. I love “you should risk 2% capital” being repeated by people who seem to not place live trade in their lives.
Traders often don’t talk about details of their approach (probably not intentionally). You see a trader showing his method and he has good intentions, but he may miss some of heuristics coming from experience. So it looks like trading moving average crossovers is an easy win. But behind the scenes there are discretionary elements which are automatic for more experienced craftsman. This may be in fact key differentiator which makes strategies profitable - being able to select better quality setups within the given method.
On forums I see multiple cases of not providing valuable input (putting nicely). Posts answering questions, which were not asked or RTS (random true statements). Writing just for writing seems to be a thing (not only for traders though). So we should all talk more about (around?) the topic
Traders rarely admit that profitable trading is REALLY hard and most of us are not consistently profitable.
I think I haven’t seen any trader talk about their learning process or the phase when they discovered forex trading and how they got themselves educated about the same.
I agree. When I first started, I was starting to think that forex was a scam.
I PM’d a trader on here and asked him about his emotional state during his initial stages before consistent profitability.
He said he saved as much as he could. And in the first year he lost 20%. It was a lot of money.
He said he didn’t sleep well that whole year. He endured and improved after his first year.
But he was honest with me about his process.
That was the part I needed to hear. I never heard or read about anyone’s process. People talk about losses, but often don’t go into details.
He helped me understand that what I was going thru was natural.
All it took was one example to show me that this endeavor is possible.
One more thing popped up when I was on a walk.
You will rarely hear or read, that patterns you learn in forex are in the past. This may be obvious, but when you learn chart patterns, you see them completed. When sitting in front of a chart, if you see a pattern - it is already to late to jump in. It is very rare to hear or read how someone is reacting to forming pattern.
This is also a lesson, which took me awhile to get. I could find multiple (even rare) patterns on the chart, but stating what happend does not bring money It took much effort to learn to see patterns forming. Example below:
Formed double bottom with higher second low is just ridiculous to spot:
But when you see it forming, would you think about double bottom?
As a result, instead of trading formed patterns, I am now dropping pending orders and wait (with the order in place) if pattern in fact emerge. This is something I miss in discussion on patterns - we often do not trade patterns - we trade their anticipation.
You highlight the danger of taking patterns to be predictors of what price will definitely do. What they are better at is predicting what price will probably not do.
If they must be used as entry signals, the best ones will mostly require waiting for confirmation of the price move out of the pattern before making an entry.
Each entry is just a game of chances, no matter if this is an indicator, candle pattern, price pattern etc.
Waiting for confirmation is usually a trade off - most likely it will increase the win rate at cost of lower TP or higher SL (if talking about patterns). I would say, that trading patterns alone is as good strategy as trading with confirmation, but comes with different win rate / risk:reward profile. This also relates to trade management, so longer discussion The intent of my post was to highlight, that if we look at emerged pattern - it is already late to trade it. Without dwelling into details (confirmation, tp, sl, breakeven, scaling in etc.)
I don’t think there is anything that hasn’t been discussed enough. Traders come up with anything and everything whenever they feel like.
Along the lines of what makes a good trader, am I actually making progress as a trader in the right direction? Do I need to actually have winning trades as evidence that what I’m doing is actually right or making a difference in the journey.
Basically, am I actually getting any better?
These are good points, lots of good points in here. Not that I’m a pro at this but I don’t mind sharing some of my issues and failures, part of the game and it’s what molds you into becoming a good trader.
It’s a difficult process just figuring out what style fits you the best IE. scalping, day trader, swing trader, what times frames, whether you do better just reading a naked chart or if indicators help you. And also what instruments are you going to trade. First just getting that sorted is difficult enough and some never get past that point. You just kinda have to go through and figure it out. Then let’s say you get that sorted and you know now what type of trader you want to be.
Now you got to come up with a good trading plan(strategy), backtest it and build confidence in it cause once you have 5-6 loses in a row that can really hit the emotional fear driven side of things IE. Am I really cutout for this, is my strategy any good, will I ever get over this hump and into profitability, should I close this winning trade incase the market turns on me, I got hope so I’m going to let this lost keep going hoping the market turns to my favor. And I think that’s were a large % of the 90% fail do fail at. Your mind is wired to keep you from becoming a successful trader and you really have to sit down and understand when you’re under emotional distress. Cause that causes you not to trade at your best(like 95% of the time at least I think).
This points are in response to @wilczasty post, just so you know what I’m talking about lol.
I try and show my trades live as best as I can, most youtube traders or whatever don’t show any transparence. All you ever see them post is how much profit they made. You can see my wins and loses as they happen. I even post a journal now at the end of the week.
I think they do that cause they’re not really traders to be honest, or just recycling the same old stuff to seem smart and make a dollar off someone new.
I agree as well, a lot don’t explain their method or try and put some nice sounding twist on it. I also think the simpler a system is the better. I just bought some software a few months ago to help me trade as I could leave it running while away and receive alerts. Everything looked great, great package and seemed legit. Bought it and ran it, didn’t really do well for me, then once I started sitting down to figure out how it was getting it’s signals I realized it was just a halftrend and zigzag indicator. Couldn’t believe I was so stupid, especially since I was trading well anyways, but thought hey if I could make just a few more dollars.
Yes, another good point, talk around the issue and never really get a answer. I see this a lot during my journey.
It’s all made to seem so simple, especially on the social media side of things. Seems like only the guys who have been in it a while and don’t need to have someone pay them for knowledge are telling the truth. They don’t need someone to pay them cause they are making their own money from the market.
Well if you aim is to make money then of course win rate is the best indicator of your progress. Another one is volatility of your returns, i.e. how consistent you are.
Win rate has nothing to do with if you’re making money or not. Some have strategies that win less than 50% and are very profitable, cause they get out of the market if a trade doesn’t go right their way. And some can have high win rates but lose big when they do.
Win rates only look good when you’re trying to sell a strategy. Not saying it can’t be a barometer but not the only thing you should be looking at.
I agree. Many books with charts and perfect entries show what to do when the trend is complete.
But when it’s forming, and you’re trading live, it’s a completely different story.
I watch price action, but I never watch for TA pattern like the ones you see in books.
TA patterns “from books” are good. I’m talking about classical TA with triangles, channels etc.
What is hard is to see the pattern forming before it’s over. It requires some history analysis and covering part of chart to see how actually incomplete pattern looks like in “live” setting.
Exactly. Win rate alone is worthless in the same way as risk to reward alone is worthless
I agree with this. Books and YouTube videos make it look easy. But live fire is a whole different world.
Wish traders would show their trade entry before the move. It’s easy to talk about what happened in the past. Show me someone trading live.
It’s easier to sell the dream. Reality is a hard sell.
Less people will buy the book if you tell them about 6 losses before a win, blown accounts, and the price of perseverance.
Everyone wants a shortcut. Including me.
But I’m learning that shortcuts actually take longer. Our desperation doesn’t want to let go of the idea of shortcuts. We don’t learn to let go until our losses force us to submit.
I don’t even expect live trading.
If trader share the idea behind his methodology and give some proper explanation, I take the responsibility for trying this myself and assess, if this is a real thing. With some experience you can easily differentiate who on this forum has some trades in his history and who is just posing (unfortunately I feel there are such cases) That’s what I like in your price action thread - you share your view and strategy and I already know (without going through your trades in detail) that this is solid and I can relate to it. Even, if i trade other timeframes, have maybe different trade management, less patient approach, I can understand your point of view and appreciate it, maybe even incorporate some of your ideas in my trading.
