Creating the Belief System – Price Action Traders Mindset Part 5

We previous parts in this series we have now gone over how to look at evidence, how to manage the trade, how to eye off trends, how to assess psychology and now finally we are coming to crunch game. You should now have a very good idea of the process of how traders stick to there strategy and how they can be profitable as well.

Like I have mentioned before if you are still having trouble do not worry, this is a process that takes time and not everyone is going put it all together like making a cup of instant coffee.. Like all processes it takes time, in fact for most traders it takes many many many years, so do not be hard on yourself.

prayWhat a lot of traders find the hardest though goes back to the belief system. Do you actually think your strategy works or do you actually know your strategy works. Trader A maybe trading the same strategy as trader B however trader B maybe losing money. How, you may ask? Well it is because trader A knows trading is a process and has done his or her back testing. Trader A excepts loss when wrong and trader A has a good mental perspective of the market and has control of there own emotions. Trader B finds it harder because they simple find it hard to except loss, they do not follow the process properly. They take losses that they should not, they generally take profits to early or they imbalance the process by not taking profits at all and basically being too greedy.

You see, trading overall is a balance, sometimes we need to take profits, sometimes we need to hold and other times we need to just take a break even or a loss. Now that you are familiar with movements of the market and structure overall from this series though you should have an idea what to look out for in your trades in order to get the most from them with also letting them run.

Video Below – Creating the Belief System in Trading

So in order to create the belief system that trader A knows we need to step back a moment, spend some due diligence, have some patience. Spend time testing our strategy over many years. Test what strategy you use, find out for once if it really is profitable. Follow the process, that way you change from thinking a strategy works to knowing if a strategy works. There is nothing more satisfying than looking at numbers and knowing. It changes the complete process of the business, because now you have EVIDENCE.. That evidence is your belief to trade it for real.

Now in order to do this back testing there are two programs I recommend:

Simple Forex Tester simple forex tester

Affordable, easy to use program that allows you to do good back testing in MT4. The only aspect to bare in mind with this program is making sure your broker provides lots of time for history. Every broker mt4 is different in how far they allow you to look back depending on time frame so bare that in mind, however the affordability is awesome with this application.

$97 Dollars

Update – I currently do not recommend Simple Forex Tester due to it not working properly on many latest MT4 platforms. This happened recently with the many MT4 updates this year. Currently waiting on a reply from creator of application yet no response so far. Hopefully the creator gets his program fixed in future to be compliant with modern MT4.

For those looking for a solution still, Forex Tester 2 as described below is a product that has been available for many years. It works well and is still the number one recommended back testing program out there.

Forex Tester 2fs2

Forex Tester 2 is a better program than Simple Forex Tester because it has less boundaries on time in back testing, you can literally test a strategy on any time frame over 10 years with this program. While on one hand it may cost more but as an investment in yourself as a trader the value is exceptional. Also the support with this program is really good. Many professional traders use this program.

$199 Dollars – For more information or to purchase.

Overall, both programs are good and both build the belief system needed in order to be a believer rather than a thinker. This is key.

Thanks for watching, stay tuned for part 6 of Price Action Traders Mindset..

Update – To get access to the Breakeven indicator as mentioned in the video above click here.

About Timon Weller

Timon Weller is the professional Writer and Trader behind the blog Forex Reviews. Timon Weller is also a professional Teacher of Price Action Trading and creator of the popular Training Series teaching people how to trade Price Action effectively called The Engulfing Trader. For other Forex Training available here at Forex Reviews click here.

For more on Timon Weller Click Here. To Learn more about How to Trade the Market and get updates Click Here.


  1. Ian Clarke says:

    Hello Timon
    In the video for the Trader’s Mindset Part 5, you mention an earlier video relating to the daily alert system that you use for demo purposes. Can you post a link to that earlier lesson, please?
    Also, would you consider looking at filters for these daily entries, e.g.
    1 Use the weekly engulfing candle idea to identify “trend” and then only take daily trades in that direction?, or
    2 Only take trades from structure areas?, or
    3 If on the weekly, you like to see 3 or more candles in one direction, before a reversal, perhaps look for similar on the daily before taking a trade in the opposite direction, which would limit the entries, but possibly give a better probability of success?
    Of course, you might think that looking for filters is just complicating a simple system unnecessarily and it’s better to keep it simple.
    I’d welcome any comments.
    Thanks for all your articles and videos.
    Ian Clarke

    • Hey Ian,
      Yeah, keep it simple, as soon as you complicate it will be become less and less profitable.. It works the way it is.. However of course look at structure, enter after 5 to 9 pips in direction of alert candle and engulfing candles are the best alert candles. My meaning of alert candle is is say first day of weakness after many bullish days of strength, the psychology is what makes it work really.. Yes, weekly is always a good guide for trend, however if it is just a signal on the daily you can still trade it.. It has really high probability at structures.

  2. gaye whale says:

    I watch the daily alert candle strategy. It was very helpful. I have been overseas for the last month and am having to now get back in the swing of things. The video helped me remember the ideas I was reading about on your site before I left. I will be purchasing the new release in January 2014 and very much appreciate your video’s and your easy manner.


  3. thanks timon 2013 was very good full ahead for 2014.

  4. hello . tnx for the video …
    where can I find the BE indicator ?

  5. thanks timon would appreciate your offer of the break even indicator

  6. Timon, this is very profitable strategy. But one thing is confusing. What you meant when you say that on bigger candle risk is high? Do you mean you calculate your profit in terms of pips? Like do you use constant amounts of lots on volatile and less volatile pairs? No matter the candle is small or big. Or you keep it like that on every trade I am risking 2% on account, no matter the candle is big or small, you always lose 2%.

    I hope you will understand my question.

    • Hey Umar,
      Yes you are right, no matter what risk is in pips, whether 100, 200 or 300 pips, just adjust position size to keep under 2% for that signal. The reference in the video is more so for those that have small accounts. What you are doing is correct and the best form of money management.

      Have a nice day..


  7. Hi Timon,
    When you refer to a candle being larger or smaller than the previous one are you referring to the body, range or perhaps both? Also, in following your examples can I assume that you define an engulfing candle as one where the body engulfs the previous body vs. the range engulfing the previous range?

    Thank you so much!


    • Hey Roger,
      Yeah, just the body is fine, there are two main Engulfing candles one that engulfs previous candles body at least and the other that engulfs mostly previous body and high ( bullish ) and low ( bearish ). It is also important to know that a valid engulfing candles appears at highs for bearish engulfing and at lows for bullish engulfing as well.


  8. Liam fitz says:

    Very impressive series dealing with what we all need to know . Your believe system video was without doubt one of the best I have seen in trading videos for many years .

    Long may you reign and many many many thanks !

  9. Liam fitz says:

    Just occurred tome . Could this daily alert be applied to the 4 hour chart and is there a dramatic reduction in profitable trades ?

    Obviously I wouldn’t be interested in less than 4 hour as I believe that the chances of whip saws would dramatically increase.

    Your thoughts would I am sure be appreciated by all your followers !

  10. Great Vid, Have purchased the Forex tester 2, a few month ago, found it great. It feels like one is trading the market. doubled a 10000 account into 20000 in 6 months using 1 lots nothing to crazy with structure and price action, things that you have taught in your training. I just did this in 3hours of testing. Great tool in the trades arsenal. I would say too other traders if you are serious in making in this business, Back testing is the only way too test your strategy and fast forward minutes to years of data . Watch your trade hit your targets and watch your account live. you quickly see if your strategy works, this with give your the confidence and belief in your strategy.

  11. Hi Timon,

    Thank you so much for making all this training available. You’re a blessing.
    I have been on a quest for a better platform to trade on. MT4 is okay but I can not always see the charts. I have a couple different brokers and a web-based platform I like to use because I can see it better. Being in the US my choices are limited. Here are some of My silly questions lol: How do you set your alarms? Is that an EA? What session do you prefer or do you just check daily closes? What platform are you using. Thanks

  12. Hi Timon, I think all you do is just great, I like your style & following you has increased my game, I am now looking at 200 to 300 pip trades, your latest Price Action, Traders Mindset, Part 5, creating Belief is golden together with your Daily Alerts.

    I would be keen on your Break Even indicator & also a video for the Forex Tester!

    Very Best Regards

    Jerry Clark Lincoln UK

  13. the mindset’ 5 strategy looks great! Thanks very much for this Timon. A great vid which and series of vids which I’ll have to watch again to get the most from them.

  14. Thank you Timon.
    I like it, appreciate your job for us.

  15. Kim Andrews says:

    Hello Timon, In this (part 5), you mention one of your core strategies is ‘The Weekly Pullback’. Where can I find a video you have done on this please

    Kind Regards

    Kim Andrews

  16. Thank you Timon for all the hard work you do for us. Very much appreciated. Robin.

  17. Frank Nilson says:

    Thanks for a great video. It is appreciated.

  18. Ed Junis says:

    Gosh Timon,

    This has been an amazing video for me, a truly aha moment !

    When will you have part 6 ?

    Thank you,


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