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The_ForexX_Mindset

The Trader’s Losing CycleWhat I’ve learned is that markets don’t move in patterns but in phases. While some patterns do hit their targets, it’s often because smart money allows them to, manipulating retail traders emotionally. When a pattern works once, traders trust it, but the next time it’s rejected—this is how smart money plays a psychological game to trap traders.Take a new trader, for example. They start by looking for a strategy and may see positive results in demo trading. Why? Because demo trading uses fake money, and emotions aren’t involved. But when they switch to real money, emotions take over, leading to real losses. Confidence drops, and the trader abandons the strategy, tweaks their settings, or starts backtesting again, only to end up chasing a new strategy.This cycle—trying, failing, tweaking, and restarting—can go on for days, months, or even years. I know this because I was there. Although I’ve been serious about trading for over a year, I’ve only been truly dedicated for a few months.The RevelationThe turning point comes when traders realize the market moves in phases and not patterns. This realization feels like a revelation. These phases are explained in the Forex Master Pattern, which I’ve known about for a year but only recently understood. It’s a framework banks use to manipulate retail traders, and after much effort, I’ve finally started to recognize their moves.The Forex Master PatternThe market moves in three phases:1.Contraction Phase:•This is the phase of confusion, especially on higher timeframes.•Banks plan their next move here while keeping the market range tight.2.Expansion Phase:•Volume increases as institutions begin accumulating positions at discounted prices.•The range expands, taking out highs and lows to create volatility.3.Trend Phase:•This is where institutional traders take their profits.•The market moves to new highs or lows, using retail stop losses and FOMO-inspired liquidity to fuel their exits.•Retail traders often make temporary profits here but eventually get trapped.The 90-90-90 RuleThis rule states:90% of traders lose 90% of their account within 90 days.Brokers and institutions know this, and they design the system to take advantage of it. Most traders enter the market emotionally, making them easy prey. To succeed, we must do the opposite of what the majority of retail traders do.False NarrativesA false narrative is the widely taught but misleading idea that you can achieve success by simply buying a trading bot, course, or strategy and watching the profits roll in. These narratives promise a “leverage lifestyle,” freedom, and financial success. In reality, they exist to make brokers and affiliates (introducing brokers) rich.Here’s how it works:•Introducing Brokers (IBs):These are affiliates who refer clients to brokers in exchange for a portion of the commissions, spreads, and over-the-counter (OTC) gains.•OTC Gain:When you trade CFDs (Contracts for Difference) with most non-US brokers, your trades don’t go to the live market. Instead, you’re trading directly against the broker. If you lose, the broker keeps your money. If you win, they pay you the difference.Brokers profit when traders deposit as much money as possible, trade the largest sizes, and trade frequently. Since 90-95% of traders lose, brokers benefit significantly from this system.The Retail Trader’s AdvantageRetail traders may be at the bottom of the financial pyramid, but we have one key advantage:We can enter and exit the market freely without the liquidity constraints that institutions face.Here’s the hierarchy of the financial markets:1.Retail Traders: At the bottom, but flexible and independent.2.Retail Brokers and Institutional Brokers: Facilitate trades but profit heavily from retail losses.3.Investment Banks: Influence market movements.4.Market Makers: Provide liquidity and manipulate price movements.5.Interbank Brokers: Operate between major financial institutions.6.Central Banks: Control monetary policy and currency value.7.Private Entities (Dark Pools): Influence price with large, hidden trades.The Key to SuccessUnderstanding this hierarchy and how the market truly works can transform your approach. Instead of being part of the 90% who lose, focus on:•Learning how the Forex Master Pattern works.•Avoiding emotional decisions.•Recognizing the phases of the market.•Staying disciplined and patient.An Analogy for Traditional IndicatorsImagine drawing candlesticks on a chalkboard, then smearing mud over them. The picture becomes cloudy and hard to read. This is what happens when traders overuse traditional indicators and constantly tweak their settings—it only muddies the view. Instead, focus on understanding the market’s phases to see the bigger picture.By breaking free from the losing cycle, staying disciplined, and avoiding the traps set by brokers and institutions, retail traders can find success and leverage their flexibility to thrive in the markets.“So, what do you think about everything I’ve shared? Does any of this align with what you’ve learned or experienced? I’d love to hear your take—have you heard anything similar or different about this topic?