Tuesday, July 20, 2010
A - MUST INDICATOR TO FOLLOW IN THE CURRENCY MARKET CHART
A lot of people have this question in mind, what exactly is Price Action.And why is Price Action King in Forex?
To answer the above question, i start off with talking about indicators.
There are tons of indicators out there, be it forex or others. They work mostly the same way.
And there are new indicators coming out every other day.
And there are new indicators coming out every other day.
Alot of traders when they first started trading forex, they have tons on indicators on their charts. Trying different combination of which works best for them. And at the end of the day, they get confused all over as one indicator may be telling you to go long, but the other is telling you to go short.
Which will result in you making bad decisions and end up blowing your account with a frustrated mind.
Which will result in you making bad decisions and end up blowing your account with a frustrated mind.
Why does it happen this way? Indicators are derived from the chart movements. Some indicators react faster, some slower.
However, as they are derived from the chart movements. They are 1 step slower than the chart. Which is in fact Price Action!
However, as they are derived from the chart movements. They are 1 step slower than the chart. Which is in fact Price Action!
Price Action leads the indicators, and when price reverses it movement from short to long (example). The indicator which you are watching is one step too late. And by the time the indicator confirms it is going short, Price Action has taken the market to go Long.
This happens most of time, if not all of the time.
Therefore = ALL INDICATORS ARE LAGGING INDICATORS!
PRICE ACTION IS WHAT LEADS THE INDICATORS, IT IS KING IN FOREX!
By understanding Price action in forex trading, we are able to understand the ENTIRE PICTURE of the market.
WHY is the market moving up,
WHAT causes it to stop moving,
WHY is the market reversing
WHY is the market in consolidation
WHY is the market moving up,
WHAT causes it to stop moving,
WHY is the market reversing
WHY is the market in consolidation
IT is like reading a book once you have mastered price action in forex. And the best thing is, It is not difficult!
It is even easier than you reading an indicator.
It is even easier than you reading an indicator.
And when you mastered price action, with combination of our system. You will almost be able to pick absolutely MARVELLOUS TRADES all the time. CONFLUENCE is the King of the game. This is what equates to our high probablity trades with a high winning ratio.
PSYCHOLOGY NEEDED IN FOREX TRADING [ A-MUST HAVE]
Guys.. this is something important which i want you guys to think about.
Most of us spend most of our time looking in charts, looking for good entries to
enter. And we spend all our time in that.
But are we doing the right thing all these while?
let us step out of our charts and look at the entire forex picture.
Let us reflect on how we can improve our forex game.
what are the things that we are doing wrong and should remove.
what are the things that we should be doing, but did not do?
what are the things that we are doing correctly and should keep doing
Let us look deeper..
What is our general risk reward ratio, – is it good enough for our account size
to grow and cover our loss we take in the mean while
what is our risk % size – is it too much or too little?
Did you enter the same position size on EVERY trade? are you discipline enough
to do that.
Price Action – Remember this is king in forex, did you enter with price action or
without it?
Emotions – (Entry) do we let emotions affect us as to when we enter the trade
(afraid of missing a trade)
is it because of missing a trade, we fail to enter on the break of the price
action bar + 10 pips. Instead we entered on the close of the bar and made a lot
of losses.
Emotions – (Exits) do we exit our trade base on emotions. How ofter does it
happen. did we stick to our initial plan?
Stop loss – did we shift our stop loss accordingly. Did we ever shift back our
stop loss because we hope it will go back to our direction we wanted?
Picky – are we losing money because we are not picky enough on our trades. Do we
enter base on 3 to 5 reasons or only 1 reason?
Overtrading – do we tend to over trade because we do not want to waste our time
looking at charts but not entering. did we enter more trades to grow our account
but instead make more losses.
Above are some reasons.
i want you guys to step back and think of the reasons that is affecting you. I
want all of us to improve our game further. and not just trade blindly.
Remember – CONFLUENCE is the key. Confluence means many reasons and not only 1
reason to enter.
Confluence makes you picky, confluence removes overtrading.
Postion sizing and money management is VERY IMPORTANT. If you are still not
implementing it. PLEASE CLOSE YOUR ACCOUNT. i do not want you to lose any more
money. PERIOD.
Remember to COMPOUND. this is what makes us FULL time forex traders and not
wannabes.
Most of us spend most of our time looking in charts, looking for good entries to
enter. And we spend all our time in that.
But are we doing the right thing all these while?
let us step out of our charts and look at the entire forex picture.
Let us reflect on how we can improve our forex game.
what are the things that we are doing wrong and should remove.
what are the things that we should be doing, but did not do?
what are the things that we are doing correctly and should keep doing
Let us look deeper..
What is our general risk reward ratio, – is it good enough for our account size
to grow and cover our loss we take in the mean while
what is our risk % size – is it too much or too little?
Did you enter the same position size on EVERY trade? are you discipline enough
to do that.
Price Action – Remember this is king in forex, did you enter with price action or
without it?
Emotions – (Entry) do we let emotions affect us as to when we enter the trade
(afraid of missing a trade)
is it because of missing a trade, we fail to enter on the break of the price
action bar + 10 pips. Instead we entered on the close of the bar and made a lot
of losses.
Emotions – (Exits) do we exit our trade base on emotions. How ofter does it
happen. did we stick to our initial plan?
Stop loss – did we shift our stop loss accordingly. Did we ever shift back our
stop loss because we hope it will go back to our direction we wanted?
Picky – are we losing money because we are not picky enough on our trades. Do we
enter base on 3 to 5 reasons or only 1 reason?
Overtrading – do we tend to over trade because we do not want to waste our time
looking at charts but not entering. did we enter more trades to grow our account
but instead make more losses.
Above are some reasons.
i want you guys to step back and think of the reasons that is affecting you. I
want all of us to improve our game further. and not just trade blindly.
Remember – CONFLUENCE is the key. Confluence means many reasons and not only 1
reason to enter.
Confluence makes you picky, confluence removes overtrading.
Postion sizing and money management is VERY IMPORTANT. If you are still not
implementing it. PLEASE CLOSE YOUR ACCOUNT. i do not want you to lose any more
money. PERIOD.
Remember to COMPOUND. this is what makes us FULL time forex traders and not
wannabes.
Friday, July 16, 2010
MY PERSONAL EXPERIENCE TO BEGINNERS IN FOREX
Trading is difficult, in my opinion, but you can be successful at it.
So don't give up and don't pressure yourself. I started trading forex
live in 2009. I only became profitable consistently from FEBUARY 2010. That
is ONE good year of torture.
But this is what I discovered, patience to wait for your market setup.
Discipline to follow the rules of your trade is the only thing you need
to be successful. Anyone can come up with a trading system of
strategy that will win 80% of the time.
The question is the implementation of the trading strategy. How do
you deal with this, practice practice practice.
I traded my $250account to $5,466 within 2 months, when I decided
to stick to my rules no matter what. I always place my initial stop loss
and then move my stops as the markets move in my favor. If they don't
move in my favor, I am stopped out.
There is not easy way. You must bring yourself to consistently take this
decision. It works. In your case, what I would suggest is to get a good
mentor. Someone who can evaluate your trades to help you identify what
you are doing wrong. Don't be afraid to show your mentor your past trading
record. Once I look at my losses, I was able to pin-point the mistakes I was
making and I decided to make some changes. Once I did the gains began
to flow.
So don't give up and don't pressure yourself. I started trading forex
live in 2009. I only became profitable consistently from FEBUARY 2010. That
is ONE good year of torture.
But this is what I discovered, patience to wait for your market setup.
Discipline to follow the rules of your trade is the only thing you need
to be successful. Anyone can come up with a trading system of
strategy that will win 80% of the time.
The question is the implementation of the trading strategy. How do
you deal with this, practice practice practice.
I traded my $250account to $5,466 within 2 months, when I decided
to stick to my rules no matter what. I always place my initial stop loss
and then move my stops as the markets move in my favor. If they don't
move in my favor, I am stopped out.
There is not easy way. You must bring yourself to consistently take this
decision. It works. In your case, what I would suggest is to get a good
mentor. Someone who can evaluate your trades to help you identify what
you are doing wrong. Don't be afraid to show your mentor your past trading
record. Once I look at my losses, I was able to pin-point the mistakes I was
making and I decided to make some changes. Once I did the gains began
to flow.
Monday, July 12, 2010
WHY IS IT HARD FOR SOME PEOPLE TO MAKE MONEY IN FOREX TRADING
The answer to this question is not necessarily forex trading alone. Any highly leveraged trading vehicle is going to exacerbate any problems, but the problems are with trading technique. If you're tired, give it up. Just because it seems ideal for your situation or because it seems a great way to make money does not mean you personally are cut out to be a trader. You have to love trading to be a good trader, and you have to love to learn like in any profession. Just because you had the tools and access to an operating room, doesn't mean you would perform brain surgery or engineering. You might as well ask "Why is engineering hard?"
Most technical traders spend their whole lives looking for the holy grail of indicators; there are literally thousands of combinations. There is no best indicator or holy grail. Just find the ones that work for you and a time frame that fits your trading style. And yes, when two or three indicators confirm each other (not conform), there are better odds of success.
But most people never address the psychological side of trading, never address what makes them trade emotionally. Many people never develop a written trading plan, or test the plan or test the plan according to the plan exactly, or trade the plan exactly. Most people never accurately define risk. It comes back to the psychological aspects of trading. Why can't you trade according to a written plan? There's more to it than just hitting the button when a couple of indicators confirm. People fail technical analysis, not the other way around. But people being people, they need an excuse for their failure, and it's much easier to blame an object or method than deep introspection and honesty with oneself.
You'll know what I mean when price comes crashing down against the trend to your previous support or fibonacci retracement and you fail to hit the button according to plan, simply because price movement is in the wrong direction to your emotions. The market is structured in such a way to compel you to act contrary to your own best interest! That is the reason why most continue to buy at highs and sell at lows. But lazy people would rather blame technical analysis and quit before they learn good trading techniques, like buying on dips instead of chasing price or where two indicators confirm.
IF you believe that success/failure is due to luck or external forces like the PPT, TPTB, GS or Ben Bernanke, you will continue to repeat your errors, and your trading career will be short lived and end in disaster. Take the responsibility upon yourself. Own it! This is difficult for many to do. Many people actually believe the future can be known and/or predicted. These are many of the irrational thinkers that blame technical analysis for their failures.
IF you need to be right and have a need to seek to control the market, you are an inefficient decision maker. It won't matter much what method you use because it will be inefficient. But you will do better by keeping it simple so you can control it and not think too much or make complex decisions.
Like fast food, people just want it simple, in one little package, real fast, like right now. Just give me the secret to success and riches; don't make me work or think or decide or learn or, heaven forbid, know myself and be honest with myself and responsible, etc.
It certainly takes bravery to remain skeptical, it takes inordinate courage to introspect, to confront oneself, to accept ones limitations. Scientists are seeing more and more evidence that we are specifically designed by mother nature to fool ourselves.
How else could there be so many fools and idiots, that are actually pretty intelligent?
Blaming technical analysis that is used successfully by so many, that is prevalent throughout the industry, that allows so much more than you've taken the time to comprehend, is like blaming your pencil.
Most technical traders spend their whole lives looking for the holy grail of indicators; there are literally thousands of combinations. There is no best indicator or holy grail. Just find the ones that work for you and a time frame that fits your trading style. And yes, when two or three indicators confirm each other (not conform), there are better odds of success.
But most people never address the psychological side of trading, never address what makes them trade emotionally. Many people never develop a written trading plan, or test the plan or test the plan according to the plan exactly, or trade the plan exactly. Most people never accurately define risk. It comes back to the psychological aspects of trading. Why can't you trade according to a written plan? There's more to it than just hitting the button when a couple of indicators confirm. People fail technical analysis, not the other way around. But people being people, they need an excuse for their failure, and it's much easier to blame an object or method than deep introspection and honesty with oneself.
You'll know what I mean when price comes crashing down against the trend to your previous support or fibonacci retracement and you fail to hit the button according to plan, simply because price movement is in the wrong direction to your emotions. The market is structured in such a way to compel you to act contrary to your own best interest! That is the reason why most continue to buy at highs and sell at lows. But lazy people would rather blame technical analysis and quit before they learn good trading techniques, like buying on dips instead of chasing price or where two indicators confirm.
IF you believe that success/failure is due to luck or external forces like the PPT, TPTB, GS or Ben Bernanke, you will continue to repeat your errors, and your trading career will be short lived and end in disaster. Take the responsibility upon yourself. Own it! This is difficult for many to do. Many people actually believe the future can be known and/or predicted. These are many of the irrational thinkers that blame technical analysis for their failures.
IF you need to be right and have a need to seek to control the market, you are an inefficient decision maker. It won't matter much what method you use because it will be inefficient. But you will do better by keeping it simple so you can control it and not think too much or make complex decisions.
Like fast food, people just want it simple, in one little package, real fast, like right now. Just give me the secret to success and riches; don't make me work or think or decide or learn or, heaven forbid, know myself and be honest with myself and responsible, etc.
It certainly takes bravery to remain skeptical, it takes inordinate courage to introspect, to confront oneself, to accept ones limitations. Scientists are seeing more and more evidence that we are specifically designed by mother nature to fool ourselves.
How else could there be so many fools and idiots, that are actually pretty intelligent?
Blaming technical analysis that is used successfully by so many, that is prevalent throughout the industry, that allows so much more than you've taken the time to comprehend, is like blaming your pencil.
WHAT A GOOD TRADER NEEDS TO KNOW BEFORE THE DAY IN THE FOREX MARKET
QUESTION: HOW DO YOU THINK TRADERS ACCESS THE MARKET AS THEY START THE TRADING DAY?
The best approach is first to have a mind-set that realizes that there is a lot of volatility in forex and therefore it is important to get a top-down viewpoint of what is happening. So one of the first things to do is to use multiple time frames.
When you are looking at a currency pair, look at three time frames at once. I suggest a 4 hour, 15 minute, and 5 minute time frame. The example below shows this for the EURUSD.
(click chart to enlarge)
Now follow that and the 15 minute chart offers a lot more granularity. Of course we have swings down, but the prevailing sentiment from the 4 hour was up and this means that the trader should only look for buy situations.
QUESTION: WHAT IS THE ROLE OF THE 5 MINUTE CHART ?
The 5 minute chart acts like the local traffic guard. If you want to go long, then you need confirmation on the 5 minute chart.
QUESTION: THE ONLY TIME FRAMES ONE SHOULD USE?
The concept is 3 time frames. One can use a 2 hour, a 15 minute, and a 3 minute chart. The essential feature is to never only look at one time frame.
QUESTION: WHY AND WHEN DO YOU GO COUNTER-TREND?
Counter-trend moves can make you money, but a starting trader should not go against the trend. It’s a numbers game and the trend is your friend because it can provide you with more winning trades if you go with it.
Having said that, if the 4 hour breaks down support- or, I will be flexible - the 2 hour breaks support, you can look to the 15 and 5 to confirm it. The 2 hour chart below shows support at 1.255. So if the EURUSD broke through this- even though the 4 hour chart is still not broken looking for a sell is legitimate.
QUESTION: A GOOD THING TO LOOK AT
Definitely look at the Dollar Index (DXY). It provides a quick look at global sentiment. So make sure you’re trading WITH the sentiment
Monday, July 5, 2010
WHAT TO DISCOVER IN FOREX
For many traders today, making and keeping profits is a big issue that must be addressed before the bubble bursts. Due to improvements in some of the training programs today, a few profitable traders are really coming up. Are you one of them?
But there is one major challenge many still face, aiming for 100 pips daily without adequate experience and they end up being in deficit of over 200 pips which later results in margin call for many.
I don't know if this has happened to you lately.That is why you need a forex monster that will take away all fears, greed and struggles for you.
Let me tell you a brief story: Peter has been curious about setting the records straight, and having a fulfilling and profitable forex trading career. He invested so much in education but still finds himself returning all his monthly profits in one or two trades.
He just discovers he still repeats the same mistakes over and again. He bought several ebooks and trading systems without seeing any meaningful results. Until he came across "The Forex Monster". The Forex Monster now does all the job for him: enter and quit the markets with profits.
No stress again on his part. All he does now is to relax and watch while the Monster trades for him.
This same system has been working for me for the past 3 years without doing anything. I just pluck my profits monthly and smile to my bank.
To be a successful trader you need the following guide:
1. Determine to focus only on just one or two currency pairs.
2. Determine the weekly and daily trend of these pairs ahead of time which this 'Forex Monster' will do for you.
3. Make up your mind to stay with the trend.
4. Keep to the system buy/sell signals at all time.
5. Draw a trading plan and discipline yourself to keep to it.
6. Never be GREEDY. Stay FOCUSED!
7. When you miss an opportunity never regret it. Just move on to the next level.
8. Have time for your family and friends.
But there is one major challenge many still face, aiming for 100 pips daily without adequate experience and they end up being in deficit of over 200 pips which later results in margin call for many.
I don't know if this has happened to you lately.That is why you need a forex monster that will take away all fears, greed and struggles for you.
Let me tell you a brief story: Peter has been curious about setting the records straight, and having a fulfilling and profitable forex trading career. He invested so much in education but still finds himself returning all his monthly profits in one or two trades.
He just discovers he still repeats the same mistakes over and again. He bought several ebooks and trading systems without seeing any meaningful results. Until he came across "The Forex Monster". The Forex Monster now does all the job for him: enter and quit the markets with profits.
No stress again on his part. All he does now is to relax and watch while the Monster trades for him.
This same system has been working for me for the past 3 years without doing anything. I just pluck my profits monthly and smile to my bank.
To be a successful trader you need the following guide:
1. Determine to focus only on just one or two currency pairs.
2. Determine the weekly and daily trend of these pairs ahead of time which this 'Forex Monster' will do for you.
3. Make up your mind to stay with the trend.
4. Keep to the system buy/sell signals at all time.
5. Draw a trading plan and discipline yourself to keep to it.
6. Never be GREEDY. Stay FOCUSED!
7. When you miss an opportunity never regret it. Just move on to the next level.
8. Have time for your family and friends.
THE MOST NEEDED REQUIREMENT IN FOREX
Ask any successful Forex trader what are the secrets of their success in surviving and prospering in the tough world of foreign currency trading. They will almost always tell you that one of the principal factors is having a strong discipline.
There is no escaping the fact that around 95% of the people who put their toe into swirling and potentially dangerous world of Forex get it bitten off. And sooner rather than later.
There are those who are so anxious to get started and fore go the almost obligatory two months "run-in" period. Known as demo trading in Forex jargon, this is always the first test for a trader to gauge if they have sufficient discipline and the steely character to make it.
Any expert will tell you that practice makes perfect. Why make the mistakes that inexperienced dealers will inevitably make, when you can practice and get the feel for trading while playing with virtual money.
Disciplined and successful dealers will tell you that whatever time it took them to learn the business, generate statistics and learn from them was the best investment that they could have made; to be fully prepared to enter and succeed in the world of Forex trading.
Once that step has been made the Forex trader will discover that the traits of discipline discovered and strengthened during their demo period, will be the ones that will lead them to move forward in the day to day world of Forex trading.
To be consistently profitable as a Forex trader requires the blend of experience, consistency and discipline. The first two traits are gained through time. The third one, discipline as a trader, is the glue that binds them together and makes them a winning combination.
The first major yardstick that a successful Forex trader needs to establish for themselves is realistic financial goals. Over a period of one year, the experienced and successful Forex trader will be pleased to turn his stake around two times. That's all. In other words if the Forex dealer starts with a stake of $5,000, they should aim for an annual trading profit of $10,000.
Disciplined traders will have realized that looking for unrealistic gains, leads to pressure. Pressure will almost inevitably lead to failure and losses. Profit goals should be specific, based over months and even years and not days and even weeks.
Disciplined Forex traders will always be working around a consistent trading system. This is what separates them from traders who have no discipline and are apt to lose their direction. Inconsistent and undisciplined traders, when they begin to make losses tend to panic and forget any rules that they set for themselves.
However the disciplined Forex trader although they will have, maybe two or three systems running simultaneously, their strategy will have been mapped out well in advance. They will know when to buy, sell or simply wait till things take a turn for the better.
Disciplined traders are there for the long term, and they will consistently earn profit for themselves. Discipline pays in all aspects of life, in any form of business and probably more so as a freelance foreign exchange dealer.
There is no escaping the fact that around 95% of the people who put their toe into swirling and potentially dangerous world of Forex get it bitten off. And sooner rather than later.
There are those who are so anxious to get started and fore go the almost obligatory two months "run-in" period. Known as demo trading in Forex jargon, this is always the first test for a trader to gauge if they have sufficient discipline and the steely character to make it.
Any expert will tell you that practice makes perfect. Why make the mistakes that inexperienced dealers will inevitably make, when you can practice and get the feel for trading while playing with virtual money.
Disciplined and successful dealers will tell you that whatever time it took them to learn the business, generate statistics and learn from them was the best investment that they could have made; to be fully prepared to enter and succeed in the world of Forex trading.
Once that step has been made the Forex trader will discover that the traits of discipline discovered and strengthened during their demo period, will be the ones that will lead them to move forward in the day to day world of Forex trading.
To be consistently profitable as a Forex trader requires the blend of experience, consistency and discipline. The first two traits are gained through time. The third one, discipline as a trader, is the glue that binds them together and makes them a winning combination.
The first major yardstick that a successful Forex trader needs to establish for themselves is realistic financial goals. Over a period of one year, the experienced and successful Forex trader will be pleased to turn his stake around two times. That's all. In other words if the Forex dealer starts with a stake of $5,000, they should aim for an annual trading profit of $10,000.
Disciplined traders will have realized that looking for unrealistic gains, leads to pressure. Pressure will almost inevitably lead to failure and losses. Profit goals should be specific, based over months and even years and not days and even weeks.
Disciplined Forex traders will always be working around a consistent trading system. This is what separates them from traders who have no discipline and are apt to lose their direction. Inconsistent and undisciplined traders, when they begin to make losses tend to panic and forget any rules that they set for themselves.
However the disciplined Forex trader although they will have, maybe two or three systems running simultaneously, their strategy will have been mapped out well in advance. They will know when to buy, sell or simply wait till things take a turn for the better.
Disciplined traders are there for the long term, and they will consistently earn profit for themselves. Discipline pays in all aspects of life, in any form of business and probably more so as a freelance foreign exchange dealer.
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