Have you ever lost a trade and became so upset that you felt like a complete idiot afterwards?
Did that one loss affect how your future trading activity would play out?
Well, if you did you're not alone. In fact most people come across the same instinct, it is human nature to want to always be a winner. No one enjoys losing.
We were brought up always seeing the winner being rewarded and the loser being mocked or eliminated from a competition so we bring that same thought into the trading world believing that if you take one loss you may as well stop trading. A series of losses may traumatize a trader forever. 
This is where proper money and risk management come into play. 

Taking Losses

Trading is a business. Your trading account is your physical business. You are exchanging wins and losses for gains and forfeiture. 
The goal is to build your account to the largest amount overtime so you must think long term.
The problem is you're afraid of taking a loss. Most retail traders are afraid of closing out a loss because they do not understand why they took the trade in the first place, they just focused on the positive outcome of winning that they ignored their defense.
"The single most important thing in trading is becoming a master of losing. Don't focus on making money, focus on protecting what you have." - Baja Pips
You must lose and become extremely good at it. The more you lose the less afraid you'll be of taking a loss in the future. When you build the habit of taking losses on the regular, that's when you'll start to see winning opportunities more frequently.
Your mind will become configured to accepting the loss and moving on, that's when great trades will start to appear.
Holding losses also eats up your available margin which will be a restriction on you when the time comes to open a potential winner.

Money Management 

I'd like to share with you a real example of improper money management and how i had screwed up on a single trade that cost me a huge portion of my account. I will then explain the importance of trading with a large enough amount of capital as opposed to a small trading account.

As you can see in the photo above, this specific account has over -20% drawdown at the time of typing this blog. I run a few live accounts because I test out different strategies and compile what I've learned into one complete algorithm. Many of my trading accounts are actually "training accounts". I deposit a small amount into them and run them as if they were the same as my main account, this is called "forward testing". On this particular account I was winning and actually at a positive net gain a few days ago simply by closing out my losers and taking small winners over time. One day I saw a great trading opportunity and took it and forgot to assess my risk which ended up hitting my stop loss and wiping out all of my previous gains and more. Was I emotional? Nope! 

I did use proper money management, because that could have been my entire account on the line had I not used a stop loss. But I did adhere to my risk management. 

Risk management would have warned me that the trade I was taking was a more volatile pair, therefore I must reduce my lot size to be able to take a loss but only lose a smaller percentage of my trading account if a loss were to occur. Mistakes happen and this is the importance of making sure that a loss is of a substantial amount that would have little to no impact on you're total capital. I am grateful that this was just a training account and not my actual main account. I took the loss and instead of becoming emotional over it I simply took note and learned a valuable lesson that I will carry on into all of my future trades.

The Importance Of A Large Enough Trading Account

You may have heard that you can start trading with as little as a few hundred dollars. In fact, it is marketed on many offshore brokerage websites, some would even give you a deposit bonus or match! That sounds almost too good to be true! Don't you ever think it actually may be so?








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What these brokerages and even trading con-artist/con-groups are not telling you is that you have a high percentage chance of either blowing your small account or taking enough losses that you run out of margin to take another trade and must deposit more to stay in the game. 
You also cannot adhere to proper risk management neither. You may have every other rule down and completely ignore the risk management factor. Like my example above, if you are trading on a small trading account you may be forced to take a specific lot size and end up losing that trade forcing you to take a bigger overall hit. If you are trading with a few hundred like these dodgy brokerages promote for example, you may only be able to trade up to a few pennies before reaching your maximum margin, as a result you'll be forced to open trades on more volatile pairs resulting in a significant large portion of your trading capital.
When you have a large enough trading account ($50,000 USD minimum) you can avoid this outcome because you'll have enough margin to reduce your lot sizes small enough to take as many loss in pips and still only lose the same amount of overall capital as your other trades. Why do you think most DEMO accounts have the default standard at $50,000+?

Well I hope you learned something from this blog. That's all I have to write this week.
I try to write a blog a week to help the public out for free as I do believe in paying it forward for nothing in return.
I wish I could help everyone become a consistently profitable trader, unfortunately I do not have the time on my schedule to walk everyone through the process which is why I have created my FOREX Academy to help people on a more personal vantage point who are ready to take their trading to a higher level.

There is often a misconception of trading failure and success. It goes something like this; 

• If you trade with a huge stop loss, then you will eventually blow your account or lose much more equity than you profit.
• If you use a too short of a stop loss, then you will be stopped out too frequently which will make you a consistent loser over time.
• If your take-profit target is too large, then you will rarely close out winners.
• If your profit target is too close, then you will not have substantial profits to build your account and cover your losses.
• If you do not have an edge, then it is inevitable that you will eventually lose on a contingent basis.
• If your lot size is too big, then no matter how profitable you are, you will eventually blow your account in an unfortunate event.
• If your lot size is too small, then your profits will be worthless and not be worth the endeavor.
• If you are not disciplined and can't follow your trading principles, then you will eventually lose everything.
• If you do not know when to modify your trading plan and optimize your principles, then one black swan event can blow your trading account.
• If you do not notice when the market environment is changing, then your profitable system will eventually become unprofitable since you haven't made essential changes for it to adapt to the new market environment.
• ETC. ETC. ETC.

Failure Entails A Sole Feeble Point

So, with an unlimited amount of ways to lose in trading, the general end result is, failure.
Success is the deviation, not the standard.

How Does One Become Consistently Profitable?

You become consistently profitable by failing soo often that you become a sovereign of failure.
You fail soo many times that there are no other ways to fail.
As soon as you figure out all of the different ways to fail, the only routes left are the ways to win.

Trading can be a long but enjoyable journey if you get the proper start. Many traders fail and quit too soon so they never get to the point where the light bulb clicks and they start to see the way towards a life-long success. The issue is that most retail traders were attracted by a con-artist posing online as a successful trader and lured people in using fancy lifestyle pictures and rented cars and properties. Another way many get introduced into this field is if they were approached by someone similar who may have been apart of a "trading group", often a pyramid scheme, who promised guaranteed returns if they followed their easy money system. The truth is that trading is not simple, it is very complex and requires an understanding beyond conventional knowledge and you must learn from someone who has been in the field for many years and have legitimate proof of their success (live track record, transparency, etc.). Do your due-diligence and avoid these characters at all cost. If you become attracted to the wrong thing (fast cars and lifestyle, quick money, "quit your 9 to 5 in a few months" schemes etc.), then you must take a step back and ask yourself trading is really for you. I will cover this in a future post. Feel free to browse my website and see if my trading philosophy fits what you are looking for and if so then feel free to join my Forex Academy. I cut out the bull and get straight to the shit. 

It's been a while since my last blog post. I have been traveling the world and have had limited time to focus on blogging. I have took time to myself and to reflect on life and the way I react towards my environment. I am currently on my 13th month abroad. Everything in my life has changed since I first took on the challenge to live in other cultures. Even though most of my life has changed, there are still some things that have remained the same such as my daily trading routine and who I really am from an external perspective. In this blog I will highlight some of the most important lessons I have learned while traveling and trading and how I have adapted to new and unfamiliar environments and trading conditions and do a comparison between life on and off the charts.
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Same Species But Not The Same 

Before traveling abroad, I have been living in the United States for most of my life. I've lived on almost every coast of America from east to west, north to south. I've lived in Connecticut, Vermont, Massachusetts, Pennsylvania, New York, Georgia, Florida, Arizona, California, just to name a few domestic states I've lived in and country-wise, I've lived in America, Mexico, South Africa, Thailand, China, Jamaica, UAE and more, but I will keep the list short for the sake of this blog. I have observed the way numerous cultures interact with each other and with me. Depending on where I go I have noticed; the language or slang is different, the way people dress, the jobs, the local food and activities, belief systems, friendliness, etc. is just.. different. No one really has a universal default standard of living. City to city, state to state, country to country, it is all different. Human beings are all the same species, but our minds operate different. There is the crowd mentality and the universal standard of "normal", but there is no one specific example of the term "normal". Here is one thing I'd like for you to take note of before continuing to read this blog, we are all one species living on the same soil but have unlimited ways of living this life we all share. I can go in depth on more detailed examples of what I have experienced in each culture, but that would take too long and I'd like this blog to be short and straight to the point. ​

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What Has Changed

Since the beginning of mankind the human race has learned how to survive by adapting and evolving. We have learned how to; hunt, mate, build, protect and defend, communicate, punish, reward and grow together in communities. We have started from a mold and have been conditioned to our environment that we have been brought up in. So in a sense, yes we all are similar. We have eyes to see, noses to smell through, mouths to eat with, feet to walk on, arms to hold objects, brains to think with, organs to process and break essential nutrients down with. But at some point in time the paths have divided. As we became more intelligent we have begun making our own rational decisions on how we would like to do things. One group may have wanted to live up north in the cold while another wanted to migrate south towards the equator where it is warmer while another migrated east and the other migrated west. One group may have found different animals to hunt and vegetation to harvest depending on the landscape of the newly discovered areas they have migrated to. A group may have found land near water and developed the idea of building ships to get across it and lines and poles to fish with. Eventually we as a species have strayed so far away from the original "norm", that we now look at each other as unique and alienate anyone who deems a threat to the society or may seem so different that they are not accepted within the culture and therefore outcast, now we have passports and governments and ID's and soon to be digital QR and barcodes.

Where Is Civilization Headed?

Some may say we are headed towards the stars, some may believe we are doomed for extinction due to the corrupt lifestyles that certain people have been living, some may just think life will carry on like it always have. I have my own thoughts on what I believe and I will share with you ideas that are statistically backed up by facts and numbers to keep away from subjectivity. 

Lets start by eliminating the obvious. We are not all going to die or become enslaved by an alien race or "Illuminati" type cult, save those thoughts for the next sci-fi movie. There is no "global warming", the world is too large for a single species to have such a major impact on this space we all share. We still haven't even explored all the depths of the Earth yet so there is no real evidence that our planet is "dying".  Donald Trump will be elected president again whether you love him or hate him and the United States will still be around long after his presidency. The corona virus is a global pandemic but like all other mass hysteria, it will subside and people will begin living their normal lives again. The Stock Market is going to crash but will never disappear, FOREX will be around in the next 10-50 years. Stay away from the mainstream news and social media organizations. These statements can be backed up by doing a GOOGLE search and some thorough research. Stay away from emotional decisions and only operate from a rational point of view.

The Individual VS. The Crowd

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In this section I will tie my experiences from traveling and my previous sections on the general idealism. At this point I have covered how we are the same species but operate on different levels of understanding depending on the environment we have been brought up in. Here I would like to get the main point now that I have your attention. 

In order to successfully navigate in the markets and trade on a rational level to gain consistent outcomes you must separate yourself from the general population and gain a sense of self-actualization. There is no one way to trade successfully, just like the many different ways to live on this planet, there are numerous different methods to accomplish your goal in becoming a profitable trader. Unfortunately, most people fail because they follow a belief that by doing one thing a certain way that may have succeeded in the past, it will work for them the same way it had worked for the person explaining it. WRONG! Most retail traders fail because of this exact belief. It is not completely your fault for not understanding this though because you were conditioned to only know so much. In every corner of the Earth that I have traveled to I have noticed this nescience. You cannot really blame others for not knowing. Ignorance is a bliss, but this doesn't work well in trading however. The market is not mystical and the people who understand it are not magicians or wizards, we are regular people that just have a higher understanding of mass thinking and civilization. Most people read the same books about the same topics and chart patterns explained a thousand different ways that lead to the same result. Most people are irrational beings who do things in a certain manner that truly believes that the way they are doing things is the correct and only way to do it without searching for further meaning or taking a step back and observing it from a third person point of view. It is just human nature. This all results to a collective hive mentality that is easily predictable to the observer that over-stands the situation. The market is not a monster out to steal your money, the big players in the game just understand your strengths and weaknesses and how far to push your emotional buttons. If more people understood this then we would live in a world where there is one government and our species as a whole would evolve much quicker which may actually bring us closer to the stars sooner. 

To conclude this blog post, I would like to say that traveling and trading has allowed me to have a bigger understanding of the human race as a whole and where I stand as an individual. This has lead me to modify my trading systems and algorithms to an advanced level of automation with zero subjectivity. I am always looking for newer ways to optimize my systems and automate my daily activities and will continue to update those of you that wish to follow my journey. If you are ever interested in getting started on trading the right way then I can help you with that anytime, just register for my FOREX Academy here. I do not promote my academy on social media because I'd like you to determine for yourself if trading is worth getting into and you truly believe in my philosophy. I enjoy helping people who passionately want to make a change in their lives and walk an unusual path towards uncertainty. You will not find any of my course material online nor in any other promoted trading group on social media as it is my content coming from my mind through experience and wisdom, not conventional wisdom. 

I hope you were able to take some knowledge from this post and it helps you in life. 
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- Baja Pips

There are times that I make a good trade and many people believe that I possess some mysterious "skill". The reality is that it is not mere "skill", but rather "experience". There is a difference between the two. If you trip going up the stairs even though your shoelaces are tied and keep repeating the same mistake, eventually you learn to step higher and stop dragging your feet and being more attentive. I've tripped up more flights of stairs than most people. I've gotten bruises and cuts and scrapes all from tripping up the stairs. Sometimes it looks like I've picked a fight with the steps and the steps won every time. Eventually I learned from my mistakes which in relation to trading, I have gotten blown accounts, large losses, and just outright bad trades due to mistakes that I have made in the past. The reason why I am able to trade so consistently well today is the same reasons that most people don't see and that is because I have made plenty of mistakes that I've learned from over the past few years. The reason why most wont succeed as traders is that most aren't willing to endure the cuts and bruises along the journey to become a consistently successful trader. Mistakes are an unavoidable part of trading and many won't want to admit their mistakes, but the sooner you do, the closer you will get to financial freedom. Mistakes are the best teachers in real life and in the market, but you need a mentor that has made those mistakes in the past to guide you along your journey because you do not want to keep making the same mistakes over and over again expecting different results, that is the definition of "insanity". Only a solid mentor like myself will help you create a "trading journal" which will document all of your trading mistakes and make life much easier for you.

Why?

1. It is un-professional.
2. Each trade that you take, you are actually risking your entire account instead of a fixed risk.
3. Your mindset on each trade will be dependent on the remaining balance of your account.

Trading without a stop-loss puts you into the "Gamblers Mentality" in which you are telling the market that you are positive that price will go in your desired direction. This is poor judgement seeing that the market is the Casino and has your balance outnumbered 99.999... to 1. If you would like more information on risk management and stop-loss placement then register for our trading course and we will help you achieve your trading desires.

The Number One Job Of Profitable Traders

Most games are played in a controlled environment.
The rules, opportunities and threats are fixed, and known to all players.
In a poker game for example, we know in advance that there are 52 cards in the deck, divided into 4 suits with 13 cards per suit. We also know the number of opponents we’re playing against, and who they are.
So whenever a card is revealed on the table, we can calculate the probability of the next card to be revealed, and estimate the odds of having a winning hand.
But the game of trading doesn’t work like that. It’s played in a variable (i.e. non-fixed) environment.
In trading, you’re never sure of who you’re playing against, or the types of ways the market can move up, down or sideways.
Practically speaking, the possibilities are infinite.
So one of the reasons why people struggle with trading is because they approach it in the same manner as they would any other normal game.
They don’t realize that the game of trading works differently.
The Purpose Of Trading

The most practical purpose of trading is – no prizes for guessing – to make money.
But what many traders fail to recognize, is that they can only make money if they can stay in the game.
If you get taken out of the game, you can’t make money.
On the surface, this may seem too obvious to mention.
But you see… to most retail traders, “staying alive” is a mere side note, not an actual goal.
And I’d like you to consider “staying alive” to be the most important goal for traders. Not making money.
Let me explain.
What We Can Control vs. What We Can’t Control

The various aspects of trading can be split into two categories: things we know (and can control), and things we don’t know (and can’t control).
For example, we don’t know in advance where the market will move. We can’t control market prices, and there’s no way to know for sure where the market is headed.
We also don’t know who we’re effectively trading against, or when they’ll take action.
Compare this with poker, where the cards in a deck, number of opponents and their seating arrangements are fixed and known in advance. Most other games operate in a similar manner.
The only thing we know for sure as traders, is how much we’re risking on each trade we take. We can choose the amount of capital we lose when we’re wrong.
In other words, we can control how long we stay in the trading game.
This, above all else, is the number one job of profitable traders.
Why Amateur Traders Hate Risk Control
It may seem strange, but a profitable trader’s first line of business is not to make money.
This usually falls on deaf ears because new traders come to the market just wanting to make money, and overlook the more important goal of staying in the game.
After all, risk control is a boring topic… and nobody wants to entertain the idea of choosing how much to lose.
Thinking about how much to win is so much more fun and exciting.
The problem is that there’s no way to know (or control) how much we can win. That’s up to the market, not us.
We can only know (and control) how much we’d lose if we’re wrong.
In preparing and protecting against excessive losses, we can survive long enough to enjoy the coming profits.
The longer we stay in the game, the higher our chances of our trading edge working for us.