In this post I want to talk about an element of Forex Education that is missed by nearly every Forex Trading School out there today.

This will be the first, of a series of articles to come.

Let’s get started.

What Is Situational Awareness

Situational Awareness is the perception of current market events, comprehension of Price Action, and the projection of the markets movement during changing market variables.

In layman’s terms, it means you are aware of potential market outcomes in the immediate future as well as the broader picture. It’s the mindset and ability to be able to react and engage the market as trading conditions develop.

Simply put, you have 3 options:

  1. Do Nothing (No statistically favorable setup is present)
  2. Go Long (The market is likely to rise)
  3. Go Short (The market is likely going down)


Situational Awareness & Trading

Trading is much like Professional Athletics, Tactical Training, or any other dynamic, performance-based activity.

It requires a skill that I rarely ever hear about in the Forex Trading Industry. Yet this skill is a core training exercise in other performance-based disciplines, the skill that I am talking about is called Situational Awareness.

The primary skill that I am speaking of is how to see  “market flow” in real-time as the market is happening, this is the gateway that every trader needs to become a successful trader with “Situational Awareness”.

Unfortunately, most foreign currency  traders develop skills to only explain market events after they happen, and this is a result of being stuck in what we call the lowest level of learning the “Content Memorization”.

Often times, traders who follow traditional Forex Education with chart patterns, candlestick patterns, and lagging indicators, never truly make it out of content memorization.

In this phase, traders may make profitable trades but often their long-term results are break even at best.

Here is the learning dilemma many traders face when looking to learn breakthrough performance.

If Forex trading can be broken down into simple parts, and reduced to simple actions, why do so many traders struggle and fail to achieve long-term successful profits?

The answer lies in today’s Forex education.

The reality is that it is not only what you  learn, but how you learn that determines your ability to achieve long-term profit and success.

5 Levels Of Learning For Every Successful Trader

The FxPM Forex Software Strategy is premised upon a learning strategy that identifies “experience” and “action learning” as the best and fastest way to performance breakthrough.

FxST identifies 5 levels of learning in the progression of  certifying new professional traders:

  • Level 1 Learning – Content Memorization
  • Level 2 Learning – Gaining  Understanding
  • Level 3 Learning – Building Understanding
  • Level 4 Learning – Build Capacity For New Understanding
  • Level 5 Learning – Building Capacity For Shared Understanding

Unlike traditional learning models that most of us have experienced in  primary and post-secondary education systems, the Best Forex education requires students to go beyond the “mechanics” of skill and craft of trading.

Specifically, traditional Fx education often views students as empty vessels into which knowledge and content  is poured into the “empty” minds.

In this way students are seen as passively absorbing information and the assumption is that students will easily move from theory to practice with relative ease.

“Memorizing” content, language/terms and processes is necessary, but insufficient for traders who seek long term  consistent profits.

Memorizing Is Not Understanding

With the FxPM Software, we call this “Level 1” learning.

Yes, Level 1 learning is important, but a huge mistake for many new traders since it is an over focus on memorizing content. Some traders spend up to 3 years memorizing every single charting technique and term thinking that the more they “memorize” the better chance for success.

We call this kind of trader a “Forex Mechanic” because they depend on the static element of Forex and develop an impressive ability to describe the events of a trading day after they happen.

What they fail to do is develop the trading skill of being able to make decisions when to enter and exit the market in real time.

The 3 biggest problems with Level 1 Learning for all  Forex Traders are the effects of:

  • Knowledge Obsolescence
  • Forgetting
  • Contradiction

The most dangerous problem is when what you learn is no longer true. In today’s market,  trader knowledge becomes obsolete faster and faster due to new market dynamics and volatility.

Old trading rules simply do not apply.

Forgetting is common and expensive for new traders learning Forex. Many traders use demo accounts to practice and to eliminate the effects of “forgetting” the so-called “right way”. Unfortunately, by the time a trader “gets it right”, often the knowledge is obsolete.

This is why you never see an “Automatic Forex Trading Robot” that actually works for the long term.

If you want to make consistent money trading Forex it can not be treated like a game or side hobby as so many gurus, signal providers, and robot creators pitch it to be.

Some of the brightest minds in the world flock to the Forex market in search of building an extra source of income, and in some cases building tremendous wealth.

Developing the necessary skills to become a consistently profitable trader will take more than a couple of weeks of practice and some free forex education videos.

If you’re not willing to invest time and money into your Tools, Training, and Education, I  recommend skipping the emotional trading rollercoaster and head to the nearest Casino. (At least they’ll Serve you free drinks)

In the short term any system can get lucky and produce amazing short-term results.

It take a Proven Rule-Based Trading System to sustain long term profits trading Forex.


Over the next month I will expand upon each level of learning and explain the exact steps each trader can take to develop ‘Situational Awareness’ skills necessary for Consistent Profits and Emotion-Free Trading.

If you want to start taking the guess work out of your trading, I suggest attending one of our Free Forex Strategy Training Events that we do on a weekly basis –>> Click here


Matt Miller

Matt Miller

Sr. Trader

For over 9 years I have been trading Forex and working closely with Armando Martinez, the Founder and creator of The FxPM Software to develop FxPM. It is our goal to develop a Forex Software that not only simplifies trading decisions but also delivers institutional performance to the retail trader.

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