See How It Feels To Be On The Wrong Side Of The Order Flow

Some people are scared to trade live.  You can never make the big money, and not even begin to comprehend how to make the big money or even the small money unless you get out there and trade live, even with a small size and small percent risk per trade.

Jim Rogers used to say to the interns he hired:

That was back when wheat was in a bull market in the late 70’s and early 80’s.  He was advocating a new trader go buck the trend to short some wheat and see how it feels.  The key part being seeing how it feels.  Nothing can get the human mind working and the human emotions activated than seeing a big loss on your screen.  It can really kick your butt into action to control your risk, figure out what went wrong and to trades only the best setups.

Notice that Jim Rogers did not say go short some wheat in a demo account and see how it feels.  Nor did he say to go open up metatrader and trade your demo account.  Metatrader didn’t exist back then.  Heck I don’t even know if they had demo accounts back then.  Of all the great traders and investors, many of them started with placing a few live trades.  They didn’t start off with demo accounts.

You don’t have to lose it all as long as you know how to position size, risk a small amount per trade, and avoid over trading.

Real money, live money to see how it feels.  The emotions that can only be activated when real money is one the line.  The elation of the a huge winning day.  The pain of being stuck on the wrong side of a huge market move during losing days.  Such are the types ups and downs that only traders can face.

Paul Tudor Jones was on the wrong side of the order flow during one trading day in the Trader Documentary.  He lost $5 million in one day.  He saw how it felt being on the wrong side of the order flow.  He felt the pain.  Made him stronger and more resilient.

I used to be on the wrong side of the order flow back when I was in the technical indicator and chart pattern trader cycles.  Many consecutive losing trades and days.  It feels awful.  Your trading is just cold.

It feels awful because all someone had to do was place the exact opposite trades and they would of profited immensely.  After all, there was someone on the other side of your transactions.

I didn’t know why my trades were losing.  I didn’t know why my trades were winning.  If I saw a setup with a bullish divergence, bullish engulfing pattern, bullish head and shoulders, fib support, and trendline support and I went long and the market collapses 400 pips in a week, I didn’t know what went wrong.  Did all the support just vanish and seem to fail?  I couldn’t answer those questions because I did not have an order flow and liquidity mindset.

As I started to develop the order flow mindset many of the markets movements became far clearly.  Was I able to describe every single 100 pip move and every single 10 pip movement in price?  No, but I could describe enough of them and structure the trade properly to have sufficient win rates and good reward risk ratios.

You don’t have to capture all the market movements.  In fact, you probably shouldn’t try as that could drive you paranoid.  Believe me, I tried it.  Instead just acknowledge that you will miss some of them, but still focus on capturing some explosions of volatility.

However, in order to attain the order flow mindset, it can help to see how it feels to be on the wrong side of the massive order flow.

The people who were short EUR/CHF during September 6, 2011 saw how it felt to be on the wrong side of both the order flow and liquidity.  They felt the pain, great pain.  Did they learn and make the necessary adjustments?  Most probably didn’t, which is why the order flow inefficiencies will exist for eternity.

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