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Monday, August 25, 2025

How US Non-Farm Employment Affects Currency Trading: A Comprehensive Guide

 

Introduction

The US Non-Farm Employment (NFP) report is one of the most influential economic indicators in forex trading. Released monthly by the Bureau of Labor Statistics (BLS), it provides critical insights into the health of the US labor market, influencing the US dollar (USD) and global currency markets.

In this article, we’ll explore:
What is the Non-Farm Payroll report?
Why is NFP important for forex traders?
How does NFP impact currency pairs?
Trading strategies around NFP releases
Common pitfalls to avoid

By the end, you’ll understand how to leverage NFP data for smarter forex trading decisions.


What is the Non-Farm Payroll (NFP) Report?

The NFP report measures the number of new jobs added in the US (excluding farm workers, government employees, and non-profit organizations). Key components include:

  • Total employment change (month-over-month)

  • Unemployment rate

  • Average hourly earnings (wage growth)

  • Labor force participation rate

The report is released on the first Friday of every month at 8:30 AM EST and often triggers high volatility in forex markets.


Why is NFP Important for Forex Traders?

The US dollar (USD) is the world’s primary reserve currency, and the NFP report directly impacts:

1. Federal Reserve (Fed) Monetary Policy

  • Strong NFP numbers (higher job growth + rising wages) → Higher inflation expectations → Fed may raise interest ratesUSD strengthens.

  • Weak NFP numbers (lower job growth + stagnant wages) → Economic slowdown fears → Fed may cut ratesUSD weakens.

2. Market Sentiment & Risk Appetite

  • A strong US labor market boosts investor confidence, supporting USD, stocks, and risk assets.

  • Weak data may lead to safe-haven flows into currencies like JPY, CHF, or gold.

3. Currency Pair Reactions

  • EUR/USD, GBP/USD, USD/JPY are highly sensitive to NFP surprises.

  • A better-than-expected NFP typically strengthens USD, causing EUR/USD to fall.

  • A worse-than-expected NFP weakens USD, leading to USD/JPY declines.


How to Trade NFP News in Forex

1. Pre-NFP Preparation

  • Check forecasts (Bloomberg, Reuters, ForexFactory).

  • Monitor ADP Employment Report (released two days before NFP) as a leading indicator.

  • Be aware of previous revisions (past NFP numbers often get adjusted).

2. Trading Strategies

A) Breakout Strategy

  • Place buy-stop and sell-stop orders above/before key support/resistance levels.

  • NFP often causes sharp spikes, allowing traders to catch momentum.

B) Fade the Initial Move

  • If the market overreacts, wait for a pullback before entering.

  • Example: If USD surges post-NFP but lacks follow-through, a reversal may occur.

C) Straddle Strategy (Options Trading)

  • Use forex options to profit from volatility without predicting direction.

3. Post-NFP Analysis

  • Watch Fed statements and bond yields (10-year Treasury).

  • Sometimes, wage growth matters more than job numbers for long-term trends.


Common Mistakes to Avoid When Trading NFP

Trading Without a Plan – NFP volatility can lead to emotional decisions.
Ignoring Revisions – Previous months’ adjustments can change market reactions.
Overleveraging – High volatility increases risk; use proper stop-loss orders.
Focusing Only on Headline Number – Wage growth and unemployment rate also matter.


Conclusion

The US Non-Farm Payroll report is a game-changer for forex traders, driving USD volatility and creating trading opportunities. By understanding how NFP impacts currency markets, preparing with the right strategies, and avoiding common mistakes, traders can capitalize on this high-impact event.

Pro Tip: Always use economic calendars (like ForexFactory) to stay updated and practice risk management when trading NFP.


FAQ

Q: When is the next NFP release date?
A: The NFP is released on the first Friday of each month (check ForexFactory for exact dates).

Q: Which currency pairs are most affected by NFP?
A: EUR/USD, GBP/USD, USD/JPY, and USD/CAD are highly reactive.

Q: Should I trade before or after NFP?
A: Trading after the release reduces slippage risk, but pre-positioning can work with tight risk controls.


By mastering NFP trading, you can enhance your forex strategy and take advantage of one of the market’s most powerful catalysts. 🚀


Sunday, August 24, 2025

Euro FX COT Report Analysis Overview as Of 19 Aug 2025

 

Here is a detailed analysis of the Euro FX Commitment of Traders (COT) report for the week ending August 19, 2025.

 

Executive Summary

The COT report reveals a market that is structurally and heavily net short the Euro, a position primarily driven by Dealer institutions. However, the weekly changes show a subtle but notable shift: Asset Managers (the primary bulls) added to their long positions, while Leveraged Funds (the primary speculative shorts) also increased their bearish bets. This suggests a tightening battle between major players, with the overall net short position remaining extreme.


1. Key Overall Metrics

  • Open Interest (OI): 825,219 contracts (an increase of +247). The near-flat OI indicates that while positions were adjusted, very few new contracts were opened. Money is repositioning, not flooding in or out.

  • Total Traders: 307. This provides context for the concentration of positions discussed below.


2. Analysis by Participant Group

Dealers (Typically Banks & Dealers)

  • Position: Extremely Net Short. This is the most significant takeaway from the report.

    • Short Positions: 501,044 contracts (60.7% of OI)

    • Long Positions: 51,466 contracts (6.2% of OI)

    • Net Position: Net Short -449,578 contracts

  • Interpretation: Dealers are the counterparties to the market. Their massive net short position means they are effectively warehousing the risk from other participants who are net long. This is a strong, structural bearish signal for the Euro from the most sophisticated and risk-averse group.

Asset Managers / Institutional (e.g., Pension Funds, Insurance Companies)

  • Position: Extremely Net Long. They are the natural counterpart to the Dealers.

    • Long Positions: 501,183 contracts (60.7% of OI)

    • Short Positions: 129,953 contracts (15.7% of OI)

    • Net Position: Net Long +371,230 contracts

  • Weekly Change: They increased their net long position (+2,802 longs vs. -1,780 shorts). This shows continued, confident buying pressure from long-term institutional investors, likely viewing the Euro as undervalued or for strategic hedging purposes.

Leveraged Funds (e.g., Hedge Funds, CTAs)

  • Position: Net Short, but less so than Dealers.

    • Long Positions: 104,037 contracts (12.6% of OI)

    • Short Positions: 70,811 contracts (8.6% of OI)

    • Net Position: Net Long +33,226 contracts

  • Wait, that's net long? A common point of confusion. In this specific report, Leveraged Funds are actually net long. However, it's crucial to look at the weekly change:

    • Weekly Change: They increased their net short exposure significantly. They added +4,888 short contracts while only adding +3,178 long contracts. This is a clear bearish bet from the speculative community.

Other Reportables & Nonreportable Positions (Smaller Traders)

  • These groups are generally net short and made smaller adjustments, but their impact on the overall market is less significant than the three main groups above.


3. Market Sentiment & Implications

  • The "Battle of the Titans": The market is defined by a colossal standoff between Dealers (massive net short) and Asset Managers (massive net long). This creates a fragile equilibrium.

  • Speculative Sentiment: The actions of Leveraged Funds are key. Their move to increase net short bets this week aligns them more closely with the Dealers' bearish outlook. This suggests speculative money is betting on Euro weakness in the near term.

  • Price Outlook:

    • Bearish Case: The enormous net short position from Dealers is a powerful underlying bearish force. If Leveraged Funds continue to build shorts and Asset Manager buying wanes, significant downward pressure on the Euro could occur.

    • Bullish Case (Squeeze Potential): The market is overwhelmingly positioned for Euro weakness. If a positive catalyst emerges (e.g., a shift in ECB policy, weak US data), these massive short positions would need to be covered (i.e., buy back Euros). This could trigger a very sharp, rapid rally—a classic short squeeze.

Conclusion

The Euro FX futures market as of August 19, 2025, is poised for potential volatility. The market structure is heavily net short, dominated by Dealers, while the fundamental long-term buying from Asset Managers continues. The key development this week is that speculative Leveraged Funds have joined the bearish side.

Traders should watch for any catalyst that could force one of these major groups to unwind their positions. A break lower would validate the speculative shorts, while an unexpected rally could force them to cover, accelerating the move upward.

Disclaimer: This analysis is for informational purposes only and should not be considered investment advice. The COT report is a lagging indicator, reflecting positions from the previous Tuesday.

 

British Pound COT report Analysis as of 19 Aug 2025

 

Here is a detailed analysis of the Commitments of Traders (COT) report for British Pound Futures as of August 19, 2025.

 

Executive Summary

The report reveals a market that is overwhelmingly net short the British Pound, driven primarily by a massive bearish position from Asset Managers. This selling pressure is being absorbed by Leveraged Funds and Dealer Intermediaries, who hold significant net long positions. The market structure suggests a strong bearish sentiment among institutional investors, with speculative players betting against it.


1. Key Market Overview

  • Open Interest: 219,831 contracts (a decrease of 13,749 from the previous week). This decline in open interest, alongside a falling price, often suggests long positions are being liquidated or closed out, reinforcing the bearish trend.

  • Total Traders: 184


2. Analysis by Trader Group

Dealer/Intermediary

  • Position: Net Long (+40,425 contracts)

    • Long: 60,669

    • Short: 20,244

  • Interpretation: Dealers are typically the "smart money" that takes the other side of client trades. Their significant net long position means they are effectively buying the Pound from others who are selling (primarily Asset Managers). This is a classic risk-off flow where institutions hedge their FX exposure by selling to dealers.

Asset Manager/Institutional

  • Position: Extremely Net Short (-67,141 contracts)

    • Long: 45,610

    • Short: 112,751

  • Interpretation: This is the most significant finding in the report. Institutional investors hold a massive net short position, representing the core bearish sentiment in the market. This group includes pension funds, insurance companies, and other entities that are likely hedging their UK asset exposure or making a outright bearish bet on the GBP.

Leveraged Funds (e.g., Hedge Funds, CTAs)

  • Position: Net Long (+22,454 contracts)

    • Long: 64,243

    • Short: 41,789

  • Interpretation: Leveraged funds are speculative "fast money." Their net long position indicates they are betting against the prevailing bearish trend set by Asset Managers. They might be anticipating a short-term bounce or a reversal. However, the large increase in their short positions (+15,954) shows that a portion of this group is also joining the sell-side, creating a mixed picture.

Other Reportables & Nonreportable Positions (Smaller Traders)

  • Position: Slightly Net Short for Other Reportables; Net Long for Nonreportables.

  • Interpretation: These groups (smaller speculators and retail traders) have a minimal aggregate impact on the market direction compared to the large players.


3. Net Position Summary & Market Sentiment

Trader GroupNet PositionSentimentRole
Dealer/Intermediary+40,425BullishSmart Money, absorbing sells
Asset Manager/Institutional-67,141Extremely BearishDriving the market trend
Leveraged Funds+22,454BullishSpeculating against the trend
Other/Nonreportable~+4,300Slightly BullishMinor influence

Overall Market Sentiment: BEARISH. The sheer size of the net short position from Asset Managers dominates the market's posture.


4. Changes from the Previous Week (The "Change" Row)

The numbers below the positions show the weekly change. This is crucial for understanding momentum.

  • Asset Managers: Increased their net short position dramatically.

    • They added +11,020 new long contracts but added a staggering +31,050 new short contracts. This is a clear and aggressive move to the bearish side.

  • Leveraged Funds: Their activity was mixed but leaned bearish.

    • They added +11,030 longs but also added a massive +15,954 shorts. This shows they were actively selling into the market decline, even while maintaining a net long book.

  • Dealers: Increased their net long position.

    • They added more longs (+1,474) than shorts (+1,225), confirming they were consistent buyers.

  • Nonreportable (Small Specs): They were forced out of long positions, closing -2,381 contracts, and were heavily shorted against, adding +41,564 new short contracts. This is a classic sign of capitulation from the retail/small speculator crowd, often a contrarian signal that a move may be nearing exhaustion.

    5. Trading Implications & Conclusion

  • Bearish Dominance: The market structure is fundamentally bearish due to institutional hedging/selling.

  • Contrarian Signals: The fact that "smart money" Dealers are net long and that small speculators (Nonreportables) were net sellers and massively increased their short exposure can be seen as a contrarian bullish signal. Historically, when the crowd is extremely positioned one way, a reversal becomes more likely.

  • Key Levels to Watch: The market is poised for a significant move.

    • If the bearish fundamental story (e.g., weak UK economic data) continues, the Asset Managers could push prices even lower. Their positioning is not yet at an extreme that suggests a reversal is imminent.

    • However, the buildup of long positions from Leveraged Funds and Dealers, combined with the capitulation of small specs, means any positive trigger for the GBP could lead to a sharp short-covering rally as these massive short positions are bought back.

In summary, the COT report paints a picture of a deeply bearish market driven by institutional flows, but one that is also showing early classic signs of being over-extended to the downside, setting the stage for a potential powerful reversal when sentiment shifts.


Disclaimer: This analysis is for informational purposes only and should not be considered investment advice. The COT report is a lagging indicator and should be used in conjunction with other technical and fundamental analysis.

  •  

Dollar Index Future COT report Analysis as of 19 Aug 2025

 

 

 Let's break down this Commitment of Traders (COT) report for the Dollar Index Futures (ICE U.S.) as of the week ending August 19, 2025.

Executive Summary

The market is dominated by Leveraged Funds, who hold a significant net short position. This is counterbalanced by Asset Managers/Institutions, who are the primary net long group. Dealer Intermediaries are also strongly net long, which is a typical hedging activity. Overall, the positioning suggests a market where speculative players (Leveraged Funds) are betting against the dollar index, while institutional and dealer players are taking the other side of that trade.


Detailed Analysis by Trader Group

Here’s a breakdown of what each group is doing and what it typically signifies:

1. Dealer Intermediaries

  • Position: Net Long.

  • Long Positions: 9,625 (33.3% of Open Interest)

  • Short Positions: 177 (0.6% of Open Interest)

  • Analysis: This group is overwhelmingly net long. Dealers are often market makers and hedgers. Their massive long position suggests they are providing liquidity to the market by taking the other side of trades from players who want to be short (like Leveraged Funds). This is a common and expected pattern.

2. Asset Manager / Institutional

  • Position: Net Short.

  • Long Positions: 2,075 (7.2% of OI)

  • Short Positions: 7,722 (26.7% of OI)

  • Analysis: This group holds a substantial net short position. Institutional investors often use the Dollar Index for macro hedging or directional bets. Their significant net short position indicates a broad institutional expectation that the U.S. Dollar will weaken against the basket of currencies in the index.

3. Leveraged Funds (e.g., Hedge Funds, CTAs)

  • Position: Net Short.

  • Long Positions: 8,676 (30.0% of OI)

  • Short Positions: 12,483 (43.2% of OI)

  • Analysis: This is the most important group for gauging speculative sentiment. They hold the largest gross short position of any group and are decisively net short. This shows that the speculative community is heavily betting on a decline in the Dollar Index. The change in their positions (the number below, e.g., +1,881 for their short positions) suggests they increased their net short exposure during the reporting week.

4. Other Reportables

  • Position: Net Short.

  • Long Positions: 1,757 (6.1% of OI)

  • Short Positions: 2,679 (9.3% of OI)

  • Analysis: This mixed group of large traders who don't fit the other categories is also net short, aligning with the overall bearish speculative sentiment.

5. Nonreportable Positions (Small Speculators)

  • Position: Net Long.

  • Long Positions: 4,046 (14.0% of OI)

  • Short Positions: 3,118 (10.8% of OI)

  • Analysis: Small retail traders are net long. Often considered a contrarian indicator, this net long positioning from the "crowd" against the net short positioning of large speculators (Leveraged Funds) can sometimes signal that the prevailing trend (down) might have further to go.


Key Takeaways and Market Implications

  1. Clear Divergence: There is a clear battle between two major forces:

    • The Speculators (Net Short): Leveraged Funds are aggressively short.

    • The Institutions & Dealers (Net Long): Asset Managers and, especially, Dealers are providing the long-side liquidity.

  2. Bearish Speculative Bias: The overwhelming net short position from Leveraged Funds is a strong bearish signal for the Dollar Index in the short term. This group tends to be trend-following, so this suggests the recent price trend has been down, and they are betting on its continuation.

  3. Contrarian Warning Sign? Extremely one-sided positions can sometimes be a contrarian indicator at major turning points. If the market stops falling and begins to rise, these large short speculators could be forced to buy back contracts to cover their losses (a "short squeeze"), which would fuel a sharp rally. For now, the pressure is to the downside.

  4. Strength of the Move: The large number of traders in the Leveraged Funds category (25 traders short vs. 23 long) indicates the bearish view is broad-based, not just concentrated in a few large funds. This can give the downtrend more sustainability.

In summary, this COT report paints a picture of a market with heavy speculative short interest betting against the U.S. Dollar Index, with institutional and dealer players on the other side. The dominant force for the immediate future is the bearish sentiment from Leveraged Funds.


What Is Drawndown in Forex Trading?


 

 

The market doesn’t move in a straight line. As you trade, you will experience gains and losses, and moments when the market rises and falls. The value of your account, too, will rise and fall according to market prices and your trading strategies. When you’re trading in Forex, it’s therefore not just about how much money you can make: it’s also about how much money you can lose. That’s where drawdown comes in.

What is a drawdown?

A drawdown is the percentage difference between the highest value of an investment, and the following lowest point before the value recovers. Drawdowns are used in Forex trading to assess the performance and risk of different trading strategies

In a drawdown, the time it takes a price to recover from the drop, if it ever does, is just as important as how far it dropped. It isn’t a loss unless the trader sells the investment at a loss.

Drawdowns are normal. Traders hold on to their investment and wait for it to recover and become profitable.

Key concepts of a drawdown

To understand what a drawdown is, it’s important to know a few key concepts.

The peak is the highest value of an asset or a trader’s investment over a specific period. If you’re looking at a chart, this would look like the peak of a mountain.

The trough is the lowest value of an asset or investment following the peak, before bouncing back and reaching a new high.

The percentage of a drawdown is the percentage by which the asset or investment has dropped from its peak to its trough.

The recovery is the period of time following the trough, during which the asset or investment recovers and returns to its previous peak.

The expansion is the new rise that follows the recovery, when the asset or investment continues to move past the old peak towards a new one.

Drawdown can be floating or fixed. Floating drawdown refers to unrealized losses from positions that are still open and haven’t been closed yet. If a trader holds on to these positions, they have the possibility of moving back up into positive territory. Fixed drawdown refers to realized losses from positions that have been closed. This money is lost forever because the assets have been sold at a loss.

 

Types of drawdown

Maximum drawdown refers to the biggest drop an account has ever experienced before bouncing back and recovering. It shows the worst that can happen. The bigger the drop is, the riskier the investment is, and the more money you can potentially lose. If you’re using leverage or trading for the long term, maximum drawdown can tell you how much pain you’d need to sit through before recovering.

Average drawdown is the average of all the dips over time and gives investors a sense of how often their account dips and how low those dips usually go. If in the last six months, a trader’s account experienced a few small drawdowns of 10%, 12%, 8%, and 14%, the average drawdown would be around 11%.

The Calmar Ratio is not a drawdown, but it uses a drawdown to check how much return you are getting per year in exchange for the amount of risk you take. It compares how much profit you made in a year to the biggest drop, or maximum drawdown, your investment experienced. For example, if your investment made 15% in one year, but at one point during the year dropped 5%, the Calmar Ratio would be 3 (15 divided by 5). A higher Calmar Ratio means you're making more money with less risk. Using this is a quick way to see how efficient your strategy is in terms of making money,and in terms of risk.

 

Example of a drawdown in Forex

Suppose a trader buys the EURUSD pair at 1.1000. The price then rises to 1.2000 before dropping to 1.0000. After hitting 1.0000, it climbs back up to 1.2000 again. The price never goes below 1.0000 during that period, so in this case, the peak was 1.2000 and the trough was 1.0000.

The drawdown is the drop from the peak, or highest point, to the trough, or lowest point. The drawdown from 1.2000 to 1.000 is 16.67%.

Even though the stock had a 16.67% drawdown, however, the trader didn’t actually lose 16.67%. They bought at 1.1000, so their unrealized loss at the bottom of 1.0000 was just 100 pips, not 200.

Drawdown is how far the price dropped from its highest point, not how much the trader personally lost. How much they lost depends on when they entered the trade.

Afterwards, if the price climbs to a new peak of 1.3000, drops to 1.2000, and then bounces back up to 1.3000 again, you have a drawdown of 7.69%. Each time the stock hits a new high and then dips, that’s a new drawdown.

Risks of drawdowns

One of the tricky things about drawdowns is that the bigger the drop, the harder it is to get back to where you were. For example, if your Forex account drops by 5%, you only need about a 5.26% gain to break even. But if it falls by 40%, you need a 67% gain just to get back to the starting point. The bigger the fall, the steeper the climb.

 

That’s why a lot of traders get worried when they see a big drop. Imagine someone’s account goes from $6000 down to $3600. That’s a 40% loss. It’s easy to feel stressed and want to pull out to avoid losing more money.

But if you don’t need the money right away, it might be better to wait. During the pandemic in 2020, the market dropped hard on some days, sometimes over 7%. Many people sold out of fear. But those who stayed in saw their accounts bounce back big time. Over the next year or two, some even grew by 50% or more.

Drawdowns can be tough and mess with your head. But if your strategy makes sense and you don’t have to sell, hanging in there and riding the wave usually pays off in the long run. Remember, it’s only a real loss if you sell when things are down.

 

Why are drawdowns important?

Drawdowns are a normal part of investing and will happen even with the most successful strategies. Keeping this in mind can help traders keep a cool head and manage their emotions when encountering losses or when the market peaks and reverses. If you look at the history of the S&P 500, you’ll see that it experienced many drawdowns. Long-term, however, it always ended up recovering and expanding.

Drawdowns can also be used to measure risk and performance related to portfolios and trading strategies. You can decide whether the amount of risk you’re taking is worth the gains you’re making, leading to better management of your money. You can compare different strategies and their respective drawdowns to find the one that works best for you.

Knowing the average drawdown of a particular strategy can help traders identify levels at which to set their stop-loss orders to limit potential losses. Just because a stop-loss gets triggered doesn’t mean the strategy doesn’t work. You just want the strategy to be profitable more times than it is unprofitable.

 

 

 

Why wait? – Analyzing the Power of Patience

 


Have you ever found yourself making statements like,

“I’ve got to make some money today.”
“I’ve got to get in this trade.”
“I’ve got to make a move.”
“I need to find some action.”

Is any of this sounding familiar?

For a lot of traders the urge to ‘get in the game’ can be overwhelming. An even more powerful urge can be watching a trade you are in go sideways and wanting to DO something about it. For minutes, hours even days you must sit and wait for the market to either move in your favor, or worse, against you. During such times a traders internal dialoged can be going crazy as he or she struggles with what to do.

You see, we must DO something right? If we’re just sitting at our computer and nothing is happening we must be doing something wrong….right? If there is no action in our trade that means we’re missing the action somewhere else doesn’t it?

Many, many traders get involved in FOREX with dreams of quitting their job, working from home and possibly making more money than they ever thought possible. We can encapsulate all of these ambitions into one simple desire, freedom. Freedom from a job that require us to keep regular hours. Freedom from a boss who tells us what to do and how to do it. Freedom from the fear of losing that job and having nothing. And most of all, freedom from financial stress.

The idea of ‘calling your own shots’ and ‘making your own rules’ is enticing to most traders. We are free thinkers, tend to be fairly risk tolerant, and tend to view money as a tool rather than a commodity. That’s why it might be strange to learn that these same traits can be extremely detrimental to your account balance.

You see, trading (when done correctly) can be quite boring. Sure working in the pits on an exchange or on a high risk trading floor can be exhilarating, but there is nothing exciting about watching your trade move sideways for minutes, hours or days. It takes a great deal of discipline to trade your system day in and day out. Trading requires you to be unemotional. Nothing kills an account quicker than an ego.

But these traits fly in direct opposition to our stated goal….freedom. When we fix ourselves to a set of rules and conditions we MUST follow, we are no longer free. Discretion (read ego) must be set aside. How many of you have purchased a trading system or EA only to second guess it at every turn? The desire to add your own bit of ‘human element’ (read ego) undoubtedly led to loss after loss. Maybe the system was junk to begin with, but how could you really know?

Another heavy contributor to our desire to trade comes from this concept of “time for dollars”. For many of you, trading is not your first carrier. It certainly wasn’t mine. Some of you have spent 10, 15 even 20 years in a carrier before moving into trading. For a large chunk of your adult life you equated ‘hours worked’ to ‘dollars paid’. The overwhelming desire to trade often comes from that unreasonable expectation that we must DO something in order to EARN our paycheck. We MUST trade. Because if we simply sit in our chair and watch the market without trading we have not EARED any money.

Traders, we are not in the ‘got to make money’ business. Our compensation is not determined by how many trades we take, or how long we spend in front of the computer screen. We are PAID (if you must use that term) for our discipline and sound decision making. This means that some weeks we’ll make nothing. On occasion we will lose money. But over time we are profitable because we have a plan we know works and we have the discipline to follow it.

People who have run businesses have an easier time understanding this than those that have not. You see, when you run a business there are days, weeks, even months when you won’t make one penny. You may spend 18 hours a day trying to build that business into something great only to see those efforts lost in the result. If we stop thinking in terms of Hours Worked = Dollars Paid we can shift our focus and our expectations from one of, “I have to trade.” To something more profitable like, “I have got to stay disciplined.”

Ask yourself a simple question today. Do I have an urge to trade because of some unreasonable expectation I have been putting on myself? If the answer is yes there are some simple things you can do to refocus your goals and change your beliefs. You have already begun to ask yourself more empowering questions, so you are one step closer to discovering more empowering answers.