Delusions Every Trader Faces

Usually when we think of delusions we imagine mental disorders: someone struggling with schizophrenia or hypochondria. We may even imagine somebody we know–somebody who is high-strung with anxiety and convinced the world is out to get them. There are some pretty bizarre delusions out there:

  • Ever feel like you’re life is a movie? For people suffering from the Truman Show Delusion, they’re literally convinced that their life is a reality show they can’t escape from. This article on Buzzfeed reports that a man actually sued HBO for putting him on a secret reality show.
  • As if living your life in a reality tv show wasn’t bad enough, imagine your life was a video game! Want to score points to win? Steal cars, avoid police, and receive your instructions through your gaming headphones. Even if you’re arrested, it’s just another level to the game. (Source)
  • Do you know someone who lives their life in denial–to the point that they don’t even think they exist? A rare condition known as ‘Walking Corpse Syndrome’ is a delusion where the individual is convinced that they’re already dead or don’t exist. Some even claim to be able to smell their own rotting flesh.

I think most of us suffer from multiple delusions (hopefully not that serious, though). A delusion is a belief or impression that is firmly maintained despite being contradicted by what is generally accepted as reality or rational. I’d like to think that I’m connected with reality and don’t belong in an asylum (my family might tell you differently, especially when I’m even remotely lacking sleep), but as I’ve grown older I’ve been able to look back and recognize the delusions I used to live by. Most traders experience delusions as well.

Traders, both new and old, often experience delusions in the currency market. Some common ones we might face:

  • “If I just keep trading, I can make a little more money.” That’s a scary delusion. You can be following the charts all day making trades, but it’s not about how many it’s about how well. The quality of your trades is much more important than the quantity.
  • “I can make some quick, easy cash in Forex.” The economy is not a magic box where you put a little money in and get a lot of money out. Trading requires discipline and strategy–not luck.
  • “It’s going to come back soon…”  This delusion can bring you down. Fast. When you hit your stop loss, it’s time to get out. Trying to hang on to a losing trade is like trying to hang onto a hangnail–it’s a lot less painful to just cut it off.

We’re all at least a little guilty of these delusions, but a diagnostic is the first step to a cure. Review some of your past trades, and identify any delusions that affected the outcome. Then, find a way to overcome them; you can share it with a friend or mentor, keep a reminder next to your computer, or even watch a cheesy motivational trading video. Whatever you need to do, don’t let yourself be the reason you don’t succeed.
Happy Trading!

Comments { 0 }

Why The Little Guys Can Still Win In The Currency Market

Bigger is better, right? Well, traditionally, yes. However, sometimes a new way or an original idea is just downright better than conventional methods. Take, for example, a fight between the big guy and the little guy. What advantages does each one have, and who will win?

Big Guy Little Guy
Muscle Mass Not muscle bound
Powerful hits Fast, successive strikes
More damage per connection Better angle for body striking
Better long range Better short range


Take a look at this epic fight from Sherlock Holmes 2:

Even though he’s up against a larger opponent, Sherlock effectively uses his speed and strategy to make quick work of that guy! I wouldn’t want to be on the wrong side of team Sherlock. Ever.

Now parallel this to The Apiary Fund. We’re definitely a smaller company made up of the little guys. Most of our traders don’t have years of schooling and finance degrees under our belts; however, we aren’t hung up in corporations, worried about whether or not the new kid in the next cubicle is out trading us, or whether or not we’ll still have our jobs at the end of the month. We don’t have to move massive amount of money bulk: our smaller individual portfolio’s can quickly jump into the perfect set up for a quick jab at the market. You’re free from corporate stress while still enjoying the benefits of having a company back you up! You guys bring us the ‘Little Guy’ advantages, and together we create the ‘Big Guy’ perks (for example, everyone coming together and shorting the euro at the Manhattan Beach Summit).

Also, please note Sherlock’s line, “This mustn’t register on an emotional level,” and then how he mapped out his strategy and followed throuh. Remind you of something you’ve been told a hundred times?? 😉

Happy Trading!

Comments { 0 }

Apiary Manhattan Beach Summit

On October 26th, 9:00 pm West Pacific Time, a crowd gathered on the Manhattan Beach pier.


A passerby stopped to see what the excitement was about, and imagine their surprise when they found Nate, Todd, and myself sitting comfortable on our UCLA camp chairs and using a Verizon hotspot to trade the Asian session, which was making its own waves—3 ticks up 2 ticks down.



It’s not that we expected to make much money during the doldrums of the Asian session, but we wanted the experience of trading on the beach!  And we had a blast!  We were 30 bees on a beach–with a whole lot of curious bystanders!  It wasn’t the fastest trading of the day, but it was profitable with some 54 pips of combined profit by sessions end.

That was just one highlight from the Manhattan Beach summit, some others were:

On Monday morning, Melinda predicted the close of the Wednesday 10:59am candle would be 1.1064  – The actual close:  1.1065.  She came within 1 pip of calling the actual close!  Impressive analysis, Melinda!

We split the summit attendees into 6 teams, and each team created their own trading strategy–presenting the strategy to a shark tank of Nate, Todd and Shawn. Our jobs were to choose a strategy, and trade it in a competition on Wednesday morning. The winning system: Bollinger bands made 2 winning trades for a total of 11 pips!

4 of the 6 trading of the participants’ strategies were profitable!

Todd pulled out 233 pips of profit in the Tuesday morning trading session.  He was kind of quiet most of the morning…  When confronted, he admitted he was trading.  We told him there was a program for that!

In the spirit of crowd intelligence, we set up an experiment and polled the room to see how the USD would respond to Wednesday’s Fed Announcement.  37 of the participants said the USD would strengthen, while only 12 said it would weaken. We shorted the EURO, and made some quick money on Wednesday!

But the best part was watching our outstanding Apiary traders develop confidence in their own trading strategies! We’d like to send a HUGE shout out to all the traders who attended the LA Summit; we learn just as much from spending time with you, and it was a real privilege to trade with everyone who attended.

Thanks again, and Happy Trading!


Comments { 0 }

How Running Has Helped Me Become a Better Trader

Ever been stuck in the slumps? Yeah, me too.


For the past couple of months I’ve felt like the man in this picture. When I ran, I was just going through the motions-just trying to finish my work out. Sure, there were some good days here and there, but I knew that I wasn’t reaching my potential as a runner. I also wasn’t feeling the happiness and energy I usually felt after a good run. I approached my coach, and he gave me some steps to help me out of this rut I’d gotten myself into. However, I realized that these steps wouldn’t just help me in my running; they could help me with my profession, my social life, and (of course) my trading.

  1. Set my sights higher than just the next race

I know you’ve all probably heard more than your fair share of motivational speeches centered on goal setting, but honestly there is something about a goal that just helps you focus on improvement. When I stopped and focused on what I was going to accomplish the racing season, I saw each race as a step to reaching my personal record. When trading, you have to look further down the road than your next trade.   What do you want to accomplish today?  This week?  This month? You have to set your sights higher than a single trade and discover what you can do to accomplish your personal best.

  1. Stop running so much

What? To improve running you need to stop running? To a degree, yes. Running daily is very important, but I always reserve one day of the week to resting and recovery. Without this break, I would end up running less during the week because my legs would become overworked. Sometimes, you need a little break from trading. Don’t spend all day with your eyes glued to the candles on your screen-go for a run or something 😉

  1. Track your mileage

I always track my mileage – along with how much sleep I get, and the food I eat. This not only helps me feel good throughout the season, but I can look back and see when I was struggling or doing good. By tracking my progress this way I can see what made me sick or tired and what made me feel good and energized. Track your trades. Notice what setups work for you, and what triggers an unwanted emotional response. Besides, whether your profitable or not, it always feels good to look back and see the progress you’re making.

  1. Mix it up

Contrary to what some may imagine of a typical cross country runner, I actually lift a lot weights. My core and upper body strength is just as important as having strong legs when I run. Sometimes, at the end of a race, if your legs feel like they don’t have the energy you can pump your arms, and ,crazily enough, your legs will follow! When you’re trading you need to be prepared for different market events. Learn to trade in long summer doldrums, as well as high votility markets.

  1. Change your attitude

One of my pet peeves is when I go to a race, and hear runners complain that they have to run. Don’t you run because you like it? If you don’t like it, then why are you here running?! I like feeling strong, the runner’s high, and swelling accomplishment that fills you up and makes you feel like floating. What do you like about trading? If you can’t answer this question, then you need to find out why you’re trading. Identifying why you’re trading will help get you through the slumps.

I hope if you’re feeling a little bit stuck in a rut in your trading, that you can try these out. Make trading enjoyable again, and go make some pips.

Happy Trading!

Comments { 0 }

Demo Accounts Hold You Responsible

“Genius is one percent inspiration and ninety-nine percent perspiration.” -Thomas Edison

Hello Traders,

Take a look at this equity curve from one of Apiary’s demo accounts:

Screen Shot 2015-09-23 at 9.52.03 AM

What do you see?

I see someone with a mental block. However, I also see that they kept trying. Go back and take a look at that quote I’m sure most of you just skimmed over. Perspiration (i.e. hard work) is the key to becoming “genius.” This definitely applies to trading. Apiary Fund’s demo accounts offer a chance to become a genius at trading.  It gives you real life trading scenarios and demands without any of the pressure of trading real money. This teaches you to think and develop strategy instead of relying on luck. Luck will run out eventually, and it will be necessary to develop a strategy.

If you haven’t guessed by now, this is one of my demo accounts. Personally, I like to use a consolidation breakout strategy, and when I use it right it produces a nice equity curve. Using this, or any strategy, requires discipline and hard work. A friend gave me 7 steps to consider before placing any trade.

  1. Proper preparation
  2. Hard Work
  3. Patience
  4. A detailed plan before every trade
  5. Discipline
  6. Communication
  7. Replaying important trades

While each of these steps may mean something different to each of you, everyone could benefit by considering them before entering a trade.  With each of my big losing trades, I missed applying at least one of these seven steps.  My rebounding wins happened because I chose to follow these steps. I’ve learned that I can’t control what happens with a trade after I’ve placed it, but I can control what I do before placing it. My 6 biggest losing trades in this account are responsible for over half of the total equity lost. That’s out of 50 losing trades! Whether I wasn’t patient enough to wait for the right setup, or I didn’t have an exit plan, some step was overlooked. That is something I CAN fix. There is nothing wrong with losing a trade, that’s just part of the game. What’s important is that I follow my trade plan and stick to it-no matter the temptation to jump into a trade without proper preparation. I can handle the other 44 losses. They wouldn’t amount to much because I followed an exit strategy in each of them.

I’ll end with one of my favorite quotes, and hopefully you can all apply it to your trading:

Let me tell you something you already know. The world ain’t all sunshine and rainbows. It’s a very mean and nasty place, and I don’t care how tough you are, it will beat you to your knees and keep you there permanently if you let it. You, me, or nobody is gonna hit as hard as life. But it ain’t about how hard you hit. It’s about how hard you can get hit and keep moving forward; how much you can take and keep moving forward. That’s how winning is done! Now, if you know what you’re worth, then go out and get what you’re worth. But you gotta be willing to take the hits, and not pointing fingers saying you ain’t where you wanna be because of him, or her, or anybody. Cowards do that and that ain’t you. You’re better than that!” -Rocky Balboa

Happy Trading!

Jacob Johnson

Trader Support

Comments { 0 }

What Makes a Trader Successful?

How would you answer this question?  What is it that makes a trader successful? Is there one special quality they need, one bit of knowledge they need to learn, one tool that they could use to make them successful?  Or maybe, it’s just luck.  They are lucky, and now they are successful!

Well, the truth is, there is no one simple thing that can be given to immediately make a trader successful.  Luck may help sometimes, but it’s not a reliable process that we can count on.  The only consistent and proven way that makes a trader successful is by the process of hard work.  Nothing will be given to you without you putting the time and effort into your trading, and even then it may still take a while.  Time and hard work will eventually place you in a position where you can be successful.  The question is – are you willing to put in the time and effort needed to become a successful trader?

Successful traders have spent the time to learn how to trade, and then used that knowledge to create a trading plan.  Most have written their rules down, so they know exactly what to do to enter a trade and to exit a trade.  If I asked everyone to send me their written trading plan (please don’t, I don’t have enough time to read them), most traders couldn’t because they either don’t have one or haven’t taken the time to make it real by putting it down on paper.  If you don’t have a well-defined and written trading plan, then you are not ready to become a successful trader.  This is something that takes time and hard work.  Again, I ask – are you willing to put the time and effort to become successful?

The development of a trading plan does not need to be complicated. In fact, it should be as simple as possible.  Let me suggest a few things that you should begin to develop your trading plan.

  1. Define the “why” for your trading.  I know you want to make money but the “why” is more than just money, it is the reason behind your need for money.
  2. Define your risk rules.  You need to identify your “sweet spot” for how much you are willing to risk.  If you risk too much you will become fearful and if you don’t risk enough you will feel unsatisfied.  This should include how much risk you want to take in each trade, as well as how to calculate your position size.
  3. Define your entry and exit rules.  I will put this into two categories.  Setups and triggers.  The setup is what you see on the chart to know a trade is about to happen while a trigger is what you see on the chart that tells you it’s time to buy or sell.
  4. Define your analysis process. This is what you are going to do to analyze your trades after they are done.  Do this on a daily, weekly, and monthly basis to make sure your trading plan is working the way you want.

Ok, so that’s it! (Well, at least some of it) If you want to be successful then create a well-defined and written trading plan.  Do not leave your success to luck or chance or anything else.  It’s up to you – now go and put the time and effort into your success!  Be that successful trader you want to be!

Happy Trading!

Comments { 0 }

Breaking the Trading Psychology Barrier: Fight or Flight

The Apiary Fund is helping people break the trading psychology barriers that are holding them back from success in the financial markets.  Each week we’re focusing on a different psychological barrier to help you better see it and beat it!

Today’s obstacle is the psychological phenomenon called fight or flight!

When faced with adversity, we all have an instinctive response:  some confront the challenge head-on while others run for hills. In psychology, it’s called fight or flight, and sometimes our instinctive response comes at odds with rational decision making in the financial markets.

Emotional traders will often allow their pre-programmed response to make the tough decisions.  Do you close the position?  Do you keep it open?  Do you double down?  Do you quit trading altogether?

The problem with emotional triggers is timing – the emotion does not always manifest itself at the right time.  So the instinctual response to the emotion of adversity is often ill-timed.

It would be nice if the emotional trigger and the right time to make a decision always correlated…  But they don’t, so the trick is to make buy and sell decisions when it’s a rational time to make the decision – not when the emotion is tugging you into a response.

One approach traders use to overcome the instinctive response of fight or flight is to identify when the emotions start tugging on the instincts.  You must learn to recognize it by documenting or making note of every situation where the emotion starts to express itself.

Once you recognize the emotion, then you can start looking for patterns.  At first you may only recognize the pattern as a losing trade, but you need to dig deeper if you can.  Is it a pattern to the size of the loss?  Or the duration of the loss?  Is it the opinion of another trader?  Is it CNBC?  Understanding the patterns that trigger the emotion will allow you to plan your trade better.

The final step is to make pre-defined decision points before you enter a trade.  In this way, you’ll know when to make a decision and when not to, irrespective of how you feel.  You’ll begin to develop confidence that these points work within boundaries of your natural instincts. It will save you from making a decision based on emotions and it will help you be more rational in your trading.

Stay tuned for the next trading psychology barrier:  Pleasure or Pain.

Comments { 0 }

Apiary Fund – Breaking the Trading Psychology Barriers

There are three obstacles Apiary Fund traders must overcome in order to get funded: trading knowledge, trading skill, and trading psychology. The toughest of these is trading psychology.

The next few Apiary Fund blog posts will focus on a different barrier we have in our trading psychology and present ways to break the barrier!

Trading Psychology Barrier:  Getting Something for Nothing

Most people like the idea of trading currencies because of the vast fortunes you can make with very little effort. Sadly, it’s not that easy. Trading currencies requires work – a lot it.  You must spend time learning and developing your skill. Like anything that requires skill, such as sports, music, or professional occupation, you should not expect to just walk in and experience instant success. The desire to make something from nothing leads to speculative behavior.  Speculative behavior leads to financial ruin.

Breaking the Trading Psychology Barrier:  Commitment.

Breaking the trading psychology barrier of getting something for nothing is as simple as making a commitment.

The usual excuse for the uncommitted is that:

–       “There’s something ‘better’ around the corner” – or –

–       “There’s no clear evidence of a win with what I’m doing.”

Modern psychology will tell you that ‘WHAT’ you commit to is secondary to ‘HOW’ you commit to it.  It is ‘how’ you commit to trading that will make you successful. Only the smallest part of committing is a passive process that evaluates whether or not something will work.  The #1 factor that will make the choice to trade currencies successful or not is what work you put into it.

Stay tuned for tips on the next trading psychology barrier:  Fight or Flight.

Happy Trading!

Comments { 0 }

Apiary Fund Traders Manage Risk on the Markets Darkest Day

August 24th will go down as a dark day in market history as the Dow Jones Industrials dropped over 1000 points in early trading.  Days like this bring an ominous air to the hive.

The first profit and loss report was run early Monday morning.  The Dow was just recovering from a 1000-point opening plunge and tensions were tighter than the e-string on a violin.   The seconds seemed like hours while the server churned out the calculation that would give the bottom line for the fund – how many losses, how many gains, and is the fund up or down…

The first number to show up was profits: $33,638.

Next, the losses:  $5,196.

Winners were beating losers by a 5:1 ratio; the early read on profits was nearly 3%.   Tension turned to pure exhilaration as we started going through the detailed report.

The traders here at Apiary Fund are amazing.

I always tell people that the risk management system is for safety and learning.  Yes, it’s true, Apiary Funds money is kept safe by the program that constantly monitors accounts and makes the call many of us are too timid to make – cut the losing trade.   But performance on days like this cannot be attributed to the fail stop of the risk management system, but to the skill our traders have developed as they work toward funding.

The Apiary Fund risk management system keeps the fund safe, but it’s more than that. It’s teaching traders how to manage risk in the tsunami of market disasters.

As good as the numbers were in that first report of the day, what was an even greater accomplishment was the fact that not a single funded trader had been stopped out by the risk management system.

Again, I repeat.  The Apiary Fund Traders are amazing!

Keep up the good work, and happy trading!

Comments { 0 }

20 Pips Equals Your Success

Ever dream of being that one investor? The one who predicts market events before anybody else knows they’re coming, and gets away with millions of dollars fitting nicely in your pocket? Well, it might be hard to stuff that much money your pockets… but I’m sure you would have no trouble finding a nice safe place to store your millions. Wouldn’t it feel great to make it on the list of legendary traders known for their cunning and incredible returns?

1929: Jesse Livermore shorted the stock market (predicting the crash) and made $100 million.

1987: Paul Tudor Jones shorted the stock market (predicting Black Monday), making an estimated $100 million.

The 1980s (after Black Monday): Andy Krieger shorted the Kiwi (predicting it was highly overvalued) and made $300 million.

1992: George Soros shorted the British pound, making $1 billion dollars (meanwhile Stanley Druckenmiller invested in the german mark and made an additional $1 billion for Soro’s Quantum fund)

2000: John Templeton made $80 million in a week shorting the Dot-Com bubble.

2003: Andrew Hall went long (like, 5 years long) on oil and made enough to land a $100 million dollar bonus.

2007: John Paulson and Kyle Bass both made $3-4 billion shorting subprime mortgages and mortgage-backed securities.

2009: David Tepper went long on banks (predicting they would recover from the financial crisis) and made $7 billion.

Of course, while some take opportunities in the market to make millions, you have to realize the enormous risk behind these trades. As investor Spidey-man would say, ‘With great returns comes risk of great losses.’ For example: Yasuo Hamanaka lost $2.5 billion shorting copper, Brian Hunter lost $6.5 billion in natural gas futures, and Jerome Kerviel lost an incredible $7.1 billion in European futures. Just this last May, China’s richest man lost $15 billion when his company shares plummeted. Ouch – somebody didn’t have their stops on!

The difference between us and them is as simple as a couple of zero’s. Say you make 20 pips with one lot, while somebody else makes 20 pips with 100 lots. You both made 20 pips, but the one with 100 lots made a lot more money. Honestly, it all depends on how much money you put into the trade. The more you practice hitting your 20 pips a day, the more comfortable you’ll become trading in the market. The more comfortable you become in the market, the more money you’ll invest in it. The more money you invest, the more money you’ll make (as long as you’re smart about it). Then, you’ll be hitting your daily 20 pips with 100 lots and making a lot more zeros.

Happy Trading!

Comments { 0 }