What Is “The Profit Geyser Concept” And Why It Is Essential For Any Forex Trader Seeking Long-Term Profitability
Wouldn’t it be nice if we could find a way to make consistent and predictable profits from our Forex trading? Of course it would! And that is what a lot of at-home traders strive for when they first start trading.
They want to make a specific amount of money… month after month.
Well, in my opinion, entering into trading Forex with the goal of making consistent and predictable profits month after month is a mistake few traders recover from. More often than not, this mistake leads to them becoming an unsuccessful trader over the long term.
You see, novice traders think they can find a trading system that works equally well in ALL market conditions. They want to make the same amount of profits regardless of whether the markets are ranging or trending. They want predictable profits in both markets with high volatility and markets that are barely moving.
Here is a variation of this mistake.
Some people believe profitable traders can PREDICT what future market conditions will be… and pick the perfect trading strategy for the upcoming market conditions. Unfortunately, a Magic Crystal Ball does not exist that accurately predicts future market behavior, so this does not work either.
In either case, when the trader does not reach this unrealistic goal of consistent and predictable profits, they most likely abandon the strategy they are using and start looking for one that is “better”. They still hold on to the belief there is a perfect strategy out there that allows them to reach the exact same profit goal month in and month out.
Well sorry, trading just does not work like that.
You can only take what the markets give you. And thinking you are going to make predictable profits month after month trading one trading strategy is just not logical. Similarly, it is not logical to think you are going to be able to predict future market behavior and pick the perfect strategy for upcoming market conditions.
The truth is, the Forex trading strategy you trade will work better in some market conditions compared to others. When the markets are “in tune” with your system, it will feel like you can do no wrong and the profits are impressive. However, when the market is “out of tune” with your system, you are in for a frustrating experience that will have you questioning everything about your trading.
The best advice I can give is this… stop looking for the perfect trading system for all trading conditions, because it does not exist.
Understanding this from the beginning helps you stick to your plan even when things don’t go your way. If you don’t stick with the strategy through thick and thin, you will miss out on one of the most rewarding events for a Forex trader, both emotionally and financially.
I call this the Profit Geyser Concept.
What Is The “Profit Geyser” Concept
When you trade over the long term you WILL experience times of growth, consolidation and drawdown. No matter how good your strategy is, and how skilled you are at trading it, you are not going to see your profits go straight up.
But the good news is the times of growth can be quite explosive. When the strategy you are trading is in tune with the market, the profits come fast and furious.
It is like a geyser of profits, and experiencing a “Profit Geyser” is very exciting, and frankly, makes trading Forex satisfying and highly profitable over the long term.
When everything is going your way, you can rack up some very impressive profits, very quickly. And it is these times that are the most fulfilling for a trader. They are also the times responsible for the overall profitability of the system you are trading.
If you are trading a well thought out trading strategy over the long term, you should expect times of growth, consolidation and drawdown. That is just the reality of Forex trading, and the sooner you accept this reality the better.
During the times of growth, you should expect:
- Some MONTHS will have extraordinary gains. (These gains can overcome drawdown and even take your account to a new level of profits)
- Some YEARS will have extraordinary gains. (These gains can overcome drawdown and even take your account to a new level of profits)
Let’s take a look at the results from Forex Signals Blast Off:
Notice how neither my trading results or the results of the S&P 500 are the same each year. Some years are better than others, and some years are significantly better than others.
Now check out these results from Forex Trading Blast Off:
Again, some explosive years and some mediocre years. But the explosive years are what take the account to an entire new and higher profit level.
This kind of activity can be expected in all markets. Let’s now check out performance from Crypto Profits Blast Off:
Did you see that Profit Geyser of over 1000%? Wouldn’t it be great if every year was like that?
I think you can start to see how Profit Geysers are responsible for EXPLOSIVE GROWTH in the trading account.
That is the power of “Profit Geysers” at work.
And if you think Profit Geysers are just something that happens in Forex trading in my accounts, check this out…
There are a few things you should take away from these results from APPLE:
- Not every year is profitable
- Some profitable years are better than others
- Some years show EXTRAORDINARY PROFITS (Profit Geysers)
This is a valuable lesson because it shows the importance of taking a long term view of investing, regardless of whether we are talking about Forex or any other type of investment activity.
The necessity to take a long term view brings up another question...
Do Trading Strategies Stop Working?
I get this question a lot, so I want to address it head on.
Now, I don’t know where people got the idea that well-thought out and strategically designed trading strategies “stop working”. I guess new and inexperienced traders with a very short term mindset think a few lowing trades mean the whole strategy is broken.
The only thing a losing trade or streak of losing trades means is the strategy is “not working” at that particular, short period of time.
You see, trading strategies work better under certain conditions.
If you read my blog post on Forex Synergy, you know I like to use the analogy of Ocean, Surfboard and Surfer to correspond to Market, Strategy and Trader.
Basically, your success is due to the synergistic relationship between the Market, the Strategy and the Trader. When everything is working in unison, you should expect Profit Geysers.
However, it is often the case that you can have a good strategy in the hands of a trader who knows how to trade it… but the market does not provide good moves.
Think of it like a professional surfer with a top of the line surfboard… without any waves. They are not going to be able to impress anyone with their surfing skills… but it is not the surfboards fault.
Similarly, don’t blame the strategy when it is really the market to blame.
As we have already discussed, sometimes your trading strategy is “in tune” with the market and sometimes it is not. But over the LONG TERM, a well thought out and systematic trading strategy with an edge will remain profitable.
And part of the reason for the overall profitability of the trading strategy is Profit Geysers!
As you saw above, Apple did not show profits every year. After a losing year, did Apple stop being a good long term investment? Absolutely not!
The long term is what matters.
Novice traders are usually too focused on the short term. Therefore, after a few losing trades, a bad week or an unprofitable month they immediately think the trading strategy they are using “stopped working”. So, they go off looking for something that is “working now”.
They end up always chasing the trading strategy that is “in tune” with the market… but always end up showing up too LATE to benefit from the profits. And to make matters worse, they miss out on all the profits the first strategy accumulates when the market changes and is “in tune” with the strategy again.
Please, if you are of the belief that intelligent trading strategies “stop working” and find yourself jumping from one strategy to the next looking for the best strategy for current market conditions… stop!
If there is one thing I can get you to take away from this post, it is this:
Trading a well thought out and strategically designed trading strategy throughout ALL market conditions (up, down and sideways), is the ONLY way to see long term profits.
And it definitely is the only way to capture Profit Geysers!
This brings me to my next point...
How To Ensure You Capture The Next Profit Geyser
If you have been paying attention throughout this post, the answer to this question should be obvious.
Here is how you ensure you capture the next Profit Geyser:
Trade a well thought out and strategically designed trading strategy through ALL market conditions (up, down and sideways) over the long term!
This is exactly what I am doing, teaching my own wife and other family members to do… and sharing with my clients in the form of signals.
By sticking to a simple to learn and simple to trade strategy that only takes 1 minute a day to trade, I can accumulate wealth faster by beating other investment opportunities, create multiple streams of income and secure my financial future.
And by sticking with the trading over the long term… I’ll never miss the next Profit Geyser that comes my way!
So, the only way to make sure you get the same financial boost a Profit Geyser can produce is to take a long term view of trading and STICK WITH IT by continuing to trade throughout growth, consolidations and drawdown periods.
By my way of looking at things, there is something much worse than a losing trade, or even a string of losing trades… and that is missing a Profit Geyser.
In Conclusion
Forex trading can be frustrating. It can also be boring. This is why it is important to keep your trading simple and confined to only a few minutes a day.
Profit Geysers are what make it all worth it.
When you see your account grow quickly and hit new highs, it is very exciting. It makes everything you went through to catch that Profit Geyser seem worth it.
Unfortunately, Profit Geysers are not something that happens all the time. Heck, if it was commonplace and regular, I wouldn’t have gone through the trouble of naming it and writing about it.
But if you are not hooked on Forex trading by now, you will be after catching a Profit Geyser. And the only way to catch one is to get started trading a well thought out trading strategy with the potential of catching high risk to reward moves.
Then, when the market, strategy and trader align… enjoy the explosive account growth created by the Profit Geyser.
Edward Lomax
