Goal Based Trading

In life if you really want to achieve something you need to set a goal. Most people start out the New Year by resolving to lose weight or do more exercise. And most people fail miserably at those tasks. If on the other hand, everyone resolved to lose 5 pounds or walk briskly for 20 minutes twice each week, many of those resolutions would be kept.
In order to make goals viable and achievable they have to concrete and realistic. As human beings we are very bad at abstract targets, but set a hard number in front of us and we will go after it like bloodhound on a hunt.
Yet when it comes to trading, many gurus will tell you NOT to set goals. The markets are utterly unpredictable, they’ll say. You can’t set hard targets on a daily basis, like a car salesman or donut store owner. Financial speculation just does not lend itself to consistency, so its not advisable to set targets.
It is true that trading is not like any other business. Unless you are a dealer and have a reliable customer flow against which you can trade, financial speculation is as consistent as a bowl of unset jello. Some days every trade turns to gold and other days you do nothing but bleed money. In that environment expecting to make a steady daily paycheck is woefully unrealistic.
Yet that does not mean that as traders we should not set hard target goals. It simply means that those goals should be measured on a longer time frame than 24 hours. If you are trading a high frequency system, one of the best ways to measure your performance is to compare the actual results with the baktested results on a monthly, quarterly and annual basis.
By having at least 100 trades in your records, you will be able to avoid most of the outliers and the let the law of large numbers tell you if the system is performing within its risk parameters or not. Looking at your trading from a longer term perspective eliminates most of the day to day angst of our profession and allows the trader to examine his performance in a rational, quantifiable way. It also creates the single most important aspect of goal setting -- realistic expectations.
Just as no normal person would resolve to lose 200 pounds in a month, so too no real trader would expect to earn 100% in a year. Setting realistic against the backdrop of backtested results is the much more professional way of approaching the trading business. I recommend you give it a try

The Most Underrated Part of Trading Well

Yes yes, of course the key to long term successful trading is to be able to pick winning ideas -- a task by the way that is much harder to achieve then it seems. But I think many traders miss the other key aspect to long term positive performance -- not losing. Not losing is not the same thing as winning. Not losing is the art of avoiding bad ideas -- which is a skill wholly separate yet no less important than the ability to find winning trades.
    
Warren Buffett when asked what was his number one rule for investing said, “Don’t lose money.” When asked for number 2 he replied, “See rule number 1.” That philosophy served him well over the past twenty years as he was able to navigate financial crises much better than most investors. In 2000 and 2001 when the S&P was down by -20% each year, Buffett was only down by -3%. When equities rebounded, other investors needed to see a 40% jump before just getting to break even, Buffett on the other hand was profitable the very same year stocks turned positive. Therein lies the power of not losing.
Not losing should not be confused with not trading. After all of us can simply sit in cash all the time, but that means we will never see any returns. Risk assumption is the essence of trading and if you get involved with the financial markets you WILL lose money. The key however is to constantly evaluate and assess the quality of your risk.
To do that well, it helps to think like an insurance company. Insurance is the very definition of a risk business, but insurance companies go out of their way to minimize their risk as much as possible. How do they do that? A few ways.
First and foremost insurance companies rely on the law of large numbers and spread their bets as wide as possible. No life insurance company will write a life policy of 1 Billion dollars for one man, but they would all be happy to write 1 Billion dollars worth of policy for a million men.
Secondly, insurance companies do a lot of research before they underwrite you. They want to know if you smoke, if you ride motorcycle, if you bungee jump, if you ever had cancer -- so on and so on. In short insurance companies are looking for a thousand reasons to say no so that they avoid an unnecessary loss. As traders we should follow the same formula. When looking at trades we are always focused on all the reasons to make them -- all the reasons to say yes. By thinking like insurance underwriters we could become a lot more disciplined and selective in our approach and hopefully learn how to lose less -- the most underrated part of trading well.
                                          got this from Boris Schlossberg of bkforex

Mandela Lessons for Traders

The last few hours have seen an unprecedented outpouring of support and mourning over the death of Nelson Mandela. There is no doubt that he will go down as one of the seminal figures in history, a man who -- as one analyst said -- embodied the idea that you must become the change that you seek. However since our weekly focus is the filthy lucre of the markets I would like to leave the soaring rhetoric to others and concentrate instead on the more pragmatic aspects of Mandela’s nature.
Almost every story about Mandela talks about his amazing ability to forgive the white minority of South Africa for the horrors of apartheid rule. And that indeed is one of the greatest historical examples of human graciousness that all of us should admire and appreciate. However, beneath the supremely moral nature of Mandela’s actions I believe there lurks a pragmatic impulse that is even more impressive.
Mandela understood very well that the white minority of South Africa was absolutely essential to the future success of the country. He understood with crystal clear precision that there could be no freedom without prosperity, no freedom without peace and no freedom without collaboration. In short Mandela, more than any other late twentieth century leader kept his eye on the prize and never allowed personal grievances to get in the way of the greater goal.
Think about that as he endured the brutal incarceration on a bone chilling speck of an island, cut off from society for 26 years, performing the mindless back breaking work of splintering rocks into two.
It is not only that our day to day grievances of missed trades, crooked dealers, and capricious markets all pale in comparison to the hardships endured by the man. It is perhaps the much greater lesson that despite all the obstacles, despite all the challenges, despite all the years of struggle and humiliation Mandela never lost sight of how to win.
Not only did he never give up, but he never allowed to corrosive, corruptive maddeningly frustrating environment around him, to influence his actions or to lose his discipline. He stayed true to his goals and that is perhaps his greatest legacy of all.
                                  by Boris Schlossberg of bkforex

i find this article applicable to many forex trader......... including my self.. LOL

Trade Forex Like a Sniper…Not a Machine Gunner

A sniper in the military has an edge over his or her enemy; their edge is unwavering patience, mastery of their weapon, and the ability to remain consciously in control of their mind and body for long periods of time in high-stress situations. We can apply these same concepts to Forex trading…
Forex trading is very similar…you need a trading edge (weapon), you have to master this edge, you need to develop and maintain rigid self-discipline and control, and you have to execute your edge flawlessly in the face of constant temptation to over-trade and over-leverage. Now, trading is nowhere near as stressful as war, but it still requires conscious control of mind and body.
Those traders who learn to pick and choose their trades wisely, trading like a Forex “sniper”, are typically the ones who succeed long-term, whereas those traders who act like machine-gun traders by shooting at everything they see (trading too much), tend to run out of ammo (money) very quickly and fail to accomplish their goals in the market. Let’s discuss how you can learn to trade like a sniper instead of shooting at everything (taking every trade) that comes your way…
• Accept that less is more in Forex trading
One of the things that we traders can learn from a sniper in the military is that in certain situations less is indeed more. Forex trading is definitely a “situation” where less is more. However, it is very common for beginning traders to feel that more is better; more Forex indicators, more trades, more analyzing, more money on useless trading robots, etc.
What is the result of such misinformed beliefs? The result is almost always over-trading; indeed, most beginning Forex traders are like machine-gunners; spraying bullets (money) at everything they deem to be a trade and likely causing more damage to their trading accounts than good. The first step that you need to make if you want to trade more like a sniper and less like a machine-gunner, is to truly accept that less is more in Forex trading.
Just like a sniper waits patiently for his or her pre-determined target to come into view; you need to learn how to wait patiently for your pre-defined trading edge to show itself in the market. As price action traders we have a very effective trading edge that allows us great opportunity to trade the market with sniper-like precision, and the daily charts provide the best “battleground” for us to execute our edge on.

• Higher time frames
As I mentioned previously, the daily chart should be your “battleground” for developing your ability to become a Forex sniper. Why, you ask? Because it is the daily chart that gives us the “highest value” or highest-probability targets when compared to any time frame below it. Weekly charts are also accurate, but they don’t give us enough targets each month and they are less practical to trade than the daily chart.
These targets are price action setups, and you should think of them as higher-value on the higher time frames, because in reality the higher the time frame the higher-probability the setup becomes. This is the primary reason that trading higher time frames drastically increases trading success. Think about it this way; a sniper is on a pre-planned mission to take out high-value targets that can change the course of a war, and in Forex trading you should be looking for the highest-probability trade setups that can have the greatest positive impact on your track record.
Machine-gun trading the lower time frames is not going to do anything but cause you to lose all your ammo or money a lot faster than you think. There is really no sense in ever trading any time frame below the 1hr chart since the value or probability of the targets or setups decreases dramatically as you move lower in time frame. You want to stick to the high-value or high-probability setups of the daily chart as much as possible, and especially while you are still learning to trade.

• Patience
If there is one thing that a sniper in the military definitely IS, it’s patient. Patience is like the “magic” ingredient that makes everything work for a sniper in the military, and it is also the “magic” ingredient that you will need to use if you want to become a Forex sniper. Most beginning traders lose money in the markets, and most beginning traders are also anything BUT patient. See the connection here?
There is a tendency for traders to want to “force” the issue of trading by manifesting signals that aren’t really there or by jumping into a signal that has not closed out yet. When it comes to money it is human nature to be impatient, this is otherwise known as greed, but if you don’t learn to become a patient Forex trader, you will never forge the type of overall self-control that it takes to succeed as a Forex trader and become a Forex sniper.

• Mastery of strategy
A sniper will train for years to sharpen and perfect his or her shooting skills, and a sniper knows exactly what their target looks like and pulls the trigger without hesitation. Similarly, you will need to “train” with the particular Forex trading strategy you choose to employ in the markets so that you know EXACTLY what you are looking for every time you open your charts. However, you will need to do more than that; you will need to truly MASTER the Forex trading strategy that you choose, because if you don’t master it, you will never achieve your full potential as a Forex sniper.
• Developing a sniper-like Forex trading mindset
Sniper-like Forex trading breeds confidence and discipline. The more you strive to trade like a sniper and less like a machine-gunner, the more your Forex trading confidence and discipline will improve. This is because you will be rewarded for patience, and as you start to see your patience pay off over time, you will want to maintain it.
It is the initial stages of developing a sniper-like Forex trading mindset that most traders fail at, usually because they do not understand the power of patience and discipline. It tends to feel better to be a machine-gun trader because you feel powerful and “in control”. The problem with this mindset is that you can never control the market, in fact, the more you try to control the Forex market the more it will actually control you. The only thing you CAN control is yourself by learning to trade like a sniper, and if you do this you will significantly increase your chances of success as a Forex trader.
                                                         by  Nial Fuller

 

Daily Affirmations Will Improve Your Trading

Don’t believe me? Well I am living proof that the concepts in this article work. I am not just talking about trading here, I am talking about life, happiness, success and freedom. Everything I have achieved in my life or in business can be attributed to the concepts in this article in some way. So do yourself a favor and read this article twice.
Anything  you want to achieve in this world can be attracted to you by following the core principles in this article. For those reading this who have the goal to become a better trader – please take this knowledge, practice it and harness it’s power to improve your trading and your life.
An affirmation is defined as: “The assertion that something exists or is true”. Daily affirmations are a widely practiced method for attaining success and accelerating your ability to achieve goals.
Napoleon Hill is one of my favorite authors, and in my opinion he was the best motivational coach of all-time. He became famous by interviewing many of the most successful people of his time like Andrew Carnegie, Thomas Edison, Henry Ford and others, and the one thing that they all seemed to have in common was that they “acted as if” what they desired most already existed before they had it. Indeed, this is the core philosophy of Hill’s work and is the main reason why daily affirmations are so important to long-term success in any field, including trading. Here’s my favorite quote from his work:
“What the mind of man can conceive and believe, it can achieve” –Napoleon Hill
This is perhaps the most famous motivational quote of all time, I have it on the wall in my trading office and I read it out loud to myself every day

 Here is a list of 17 daily trading affirmations that you can incorporate into your trading plan and that you should read out loud to yourself every day. Doing this will work to keep you motivated to practice proper trading habits and generally stay on the path to Forex trading success:

1. “What the mind of man can conceive and believe, it can achieve” – Napoleon Hill

This is the most important motivational quote of all time, which is why I have it listed again. If you haven’t read Napoleon Hill’s Think and Grow Rich Book, I suggest you do so in the near future, it’s the single best piece of motivational literature ever written in my opinion, and it will likely have transformative effects on your trading and your personal life.

2. “I am a successful trader”

If you repeat to yourself everyday that you are a successful trader, it will make you a lot more likely to do the things that are necessary to become one. If you do not believe you are a successful trader, you will never become one, as with anything else in life, you have to believe in your cause or goal before you can make it a reality.

3. “I am consistently following my trading plan”

You need to approach Forex trading as a business and be strategic and logical in following your trading plan; don’t deviate. If you’ve taken the time to formulate a comprehensive trading plan based on your trading strategy, your trading will be the most effective when you follow your plan, since you were objective and clear-minded when creating it.

4. “I have a Forex trading journal and I use it”

If you have a Forex trading journal and you actually use it, you will be far ahead of most traders. It’s critical to keep a running track record of your trading performance so that you have a tangible piece of evidence that reflects your trading ability or lack thereof. A trading journal will also give you something to stay accountable too and help you remain disciplined and organized.

5. “I practice proper risk management”

It’s important to remember that trading success is defined over a large series of trades, not over one or two. This means that you should not give too much significance to any one trade, and the way to do this is by never risking more than you are comfortable with losing per trade. By that I mean, never risk an amount that keeps you up at night thinking about or watching your trades. Remember to take small losses and that you are going to have losing trades; it’s just part of doing business in the Forex market.

6. “I trade according to what the market IS doing, not what I think it ‘should’ be doing”

We want to trade what we actually see on our Forex price charts, not what we “think” should happen or what we “want” to happen. At the end of the day, it doesn’t matter what you want the market to do; it’s going to do what it wants, so your job is to learn how to read its price action and take advantage of it, not fight against it.

7. “I will only take trades that give me a reward which clearly outweighs my risk”

The goal of any trader or investor is to make sure that the prospective reward of a trade clearly outweighs the risk involved. You need to gauge the market structure prior to entering a trade and make sure there is a logical reason for expecting that the risk reward on the trade is at least 1:1.5 or 1:2 or better.

8. “I will find other things to do besides watching my trades after they are live”

There’s nothing wrong with checking in on the market every 4 or 8 hours, but if you are sitting there addicted to your charts like a junkie, you are going to self-sabotage your own trades and probably end up losing a lot of money in the process. We have to learn to let the market “do the work” and just forget about our trades for a while after they are live. The set and forget forex trading strategy is something that I stand by and that I implement in my own personal trading, because meddling in your trades after they are live is an emotional decision and thus it’s usually the wrong thing to do. Find anything to do except watch your charts after you enter a trade.

9. “I am not emotionally affected by my profits or losses”

Both losses and profits have the ability to induce emotional reactions in us. A loss can cause us to want to take ‘revenge’ on the market and try and ‘make back’ the money we just lost. A profit can cause us to become overly-confident or even euphoric, which can cause us to deviate from our trading plan and take a trade that is lower probability than what we normally would take. Either way, you have to always be on guard against making an emotional trade immediately after a trade closes out, whether it was a winner or a loser. The best thing to do is to simply remove yourself from the markets for 12 to 24 hours after any trade.

10. “I try to trade with the dominant daily trend as much as possible”

I know you’ve heard this before, and I know it’s very cliché, but it’s also very true; the trend is your friend. I am often amazed at how many emails I get from traders telling me they are losing money in the markets and simultaneously asking me to comment on the chart they’ve attached to the email that shows a counter-trend trade on the intra-day charts. The easiest way to make money in any financial market is and has always been trading with the dominant trend. There are times when trading counter-trend is warranted, but until you’ve mastered trend-trading you should forget about counter-trend trading. Remember, don’t fight the dominant daily chart trend, instead, capitalize on it and ride the momentum until it ends.

11. “Instead of over-trading, I will be patient and let trading opportunities present themselves to me”

Don’t trade just because you feel like you have to or you want to…make sure there’s a real reason to do so and never trade when your pre-defined trading edge is not present. The downfall of most traders is over-trading, because most traders simply don’t have enough patience to trade forex like a sniper and not a machine gunner.

12. “I’m a professional trader and thus I will not engage in gambling my money in the markets”

Gamblers make random bets in casinos or elsewhere, and traders who don’t have trading plans or who don’t follow their trading edge are also gamblers. It’s really easy to click your mouse and put a trade on and hope to get lucky, kind of like pulling the arm of the slot machine at a casino. The difference is that you can actually develop and implement a high-probability trading edge like price action strategies when trading the markets. So, it’s up to you if you want to be a gambler or a trader.

13. “I will not interfere with my trades without just cause”

This one is similar to number 8, but it’s so important I wanted to touch on it again. Interfering with trades is usually an emotional reaction born out of risking too much or over-trading, both of which cause you to become overly attached to any one trade, which in turn causes you to over-analyze your trades and meddle with them once they are live. There are times when there’s just cause to interfere with your trades, such as a giant pin bar reversal that forms counter to your position, or some other opposing price action. However these instances are rare and it takes time and effort to develop your discretionary trading sense to the point where you can “effectively interfere” in your trades.

14. “News and fundamentals will not influence my trading decisions”

Traders who fall into the temptation to over-analyze the thousands of Forex news variables that occur each day, usually end up losing their trading accounts pretty quickly. All market variables are reflected via the natural price movement of the market, so by analyzing and trying to “figure out” what’s going to happen by reading economic news or watching CNBC you’re simply adding unnecessary and confusing variables to your trading approach.

15. “I am happy to take a profit and I will not be greedy”

Take your profits when your targets get hit, don’t change targets in an effort to try and get “just a little bit more” profit…These attempts to get a “little more profit” are usually in vain, and they usually lead to you letting a winning trade turn into a losing trade. Traders with smaller accounts especially need to take logical profits as they come, in order to build their accounts up and their confidence. If you get a 1 to 1.5 or 1 to 2 risk reward, there’s nothing wrong with taking the money off the table. Don’t fall into the trap of hoping that every trade you take goes on a parabolic run in your favor, the markets ebb and flow, meaning they don’t go in straight lines for very long.

16. “I invest in my trading education & myself”

Investing in your own education is paramount to success in any field. Forex trading is no different; whether it’s a book on trading psychology or the knowledge of an experienced Forex trading coach, learning something each day to make yourself a better trader will only improve your edge in the markets.

17. “I believe in my trading strategy completely and whole heartedly”

It’s critical to your trading success that you learn and trade with a strategy that’s proven and that you personally enjoy trading with. You have to follow it without deviation by remembering the fact that one loss does not negate the whole trading strategy. Don’t jump from one strategy or system to the next just because you stumble upon a few losing trades; losing trades are a natural part of any trading method. The key lies in losing trades properly and making sure you are trading with a strategy that is both simple and effective, like price action.
I trust that you’ve learned something from today’s article and I hope you write down or print out the above daily affirmations and read them out loud to yourself every day before analyzing the markets. Eventually, they will become cemented into your thinking and will thus turn into a habitual part of your trading routine. At that point, you will have transformed yourself from a losing trader to a successful and confident one.
                                                               from my mentor By Nial Fuller

GBP/USD TRADE UPDATE 23/05/2013

I POSTED THIS TRADE THIS MORNING ON MY FACEBOOK PAGE THIS MORNING........... IT JUST BROKE OUT..... BACK TO ENTRY, (BREAK EVEN)

EUR/USD TRADE UPDATE 23/05/2013

back to break even, i posted this entry on my face book page this morning

GBP/USD CLOSED POSITION. entered 1.30 AM WAT

we exited this position we saw a fib support  at the low made........ diversification and re-organizing of our office  has limited our online presence and posting of our trade entry........ bear with us

CLOSED AND OPEN TRADES

On Thursday we were forced to close our gbp/usd buy, when it formed a shooting star formation at a resistance on 1hr chart , usd/jpy sell, usd/chf closed  40pip after the poor usd news release on Thursday, nzd/usd level braker hit our stoploss. open position eur/usd

TRIGGERED GBP/USD BUYLIMIT UPDATE

it has been tough...................

USD/CHF TRADE 15/5/2013

I entered this trade base on eur/usd...... it got to a support which is the same with our price period cycle........ it has been a waiting game since morning............

GBP/USD BUYLIMIT TRADE TRIGGERED

EUR/USD BUY POSITION

the earlier 4hr candle closed above 1.2992 which is our price period cycle point, our next target is 1.3120 with stoploss @ 1.2977

EUR/USD TRADE POSITON 12/5/2013

for this week we wil be working with those resistance and support levels for continuation of sell, or buy depending on candle formation at those levels

GBP/USD TRADE POSTION 12/5/2013

waiting for candle reversal or continuation pattern @ 1.5403 and 1.5236 (we have a buy limit here), we identified those level as price period cycle for the week, price action at those level will be our focus

EUR/USD UPDATE

waiting for  candle formations at key levels is pivotal, when using price action, it has been a wonderful week, we had some poor trade as well............... in all it was wonderful.

EUR/USD TRADE ENTRY 10/5/2013

it has been wonderful................ we exited our buy limit, when we saw there was no candle formation to support our buy position at 1.3030/45. we are observing 1.2975-90 fib support, our position target is 1.2900.

NZD/USD TRADE ENTRY

EUR/USD BUY UPDATE

it has been annoying with this pair this week

USD/CHF TRADE UPDATE

it has been tough with this pair, we have protected our entry.

USD/CHF TRADE UPDATE

there was a news release that made us remain in this trade, looking forward to the aftermath

NZD/USD BUY

EUR/NZD SELL LIMIT TRIGGERED

we posted this trade yesterday sell limit, we were triggered today.

EUR/USD TRADE UPDATE

though i alone entered a buy yesterday against  our original plan of waiting @ 1.3040 for our buy limit, never the less, all buy position will be closed when 1.3030 become a resistance. it was a bad entry i admit , and i will not be shy to post my ignorant for others to learn

USD/CHF TRADE UPDATE

when we posted this pair yesterday, we where not having stop-loss, that was because it has not touch the price we located as price, period cycle, because particular price tend to repeat it self after certain period, also we had other sell which we have closed at little pips since we are not in control of the market, since we can't force the market to obey our opinion. for now we are investing 20pips

bought eur/usd 6/5/2013

bought eur/usd due to the position of usd/chf, and price, period circle spotted @ 1.3090

USD/CHF TRADE 6/5/2013 11;25am WAT

we have entered our first sell position for the week, the pair has to close above 0.9386 today for us to close our sell position, because for this month we spotted price, period cycle at 0.9386. we are targeting 0.9300. please also note we do observe eur/usd before taking decision on this pair, our exit we also be determine by eur/usd price action on our located support and resistance for the week .

EUR/NZD ENTRY POSITION 6/5/2013

i love this set up, because price, period cycle for 4hr and daily was spotted @1.5500 and on 4hr we have a buy limit @ 1.5205. we are not in a hurry, we can only act on the price action at those levels

USD/JPY TRADE SETUP 5/5/2013

obviously usd/jpy has a resistance in mind, we had to intentions of selling it either, our strategy is to locate were to expect possible price action, because there is periodic price cycle that we have observe, the market has short memory of price which it observe at all time frame 
position- we are placing a buy limit @ 97.11 when the market opens with 100.10 in view

USD/CHF POSITION 5/5/2013

we spoted price, period cycle at resistance 0.9367 and 0.9328 support, price action at this levels couple with candle formation will determine our entry at these points

EUR/USD ENTERY AND SIGNAL 05/05/2013

looking forward to exploit the statement by markel, she said eur/usd should move between 1.3000 and 1.4000 that was weeks before the eur zone raise discussion on interest rate cut, a week before the interest rate cut, my babe ( i mean Angela markel), said German will welcome interest rate hike, which gradually took eur/usd to 1.3240. while i believe are verbal influence on eur, was after interest rate cut and still eur was unable to nullify  1.3030. i am not in favour of any direction, but looking forward to price action at 1.3253 and 1.3040,
 my trading opinion  on eur/usd is
sell limit @ 1.3251
buy limit @ 1.3040

tec

8CA9MJQBTJS8

EUR/USD SIGNAL AND UPDATE

PRICE ACTION AND PERIOD CIRCLE...............STRATEGY
this was our in- house signal today, i had network issues, i felt bad about it. And below is the update of the above trade

nest week, i will make available every signal that will add value to the account of every trader,

thanks

update of our usd/chf signal/opinion yesterday

price action and period circle.......... taking out the stress in trading

usd/chf signal/opinion 30/4/2013

 good morning fellow traders, yesterday my eur/usd was not triggered , it reverse few pips to my entry............ i took advantage of usd/chf, dew to their correlation. i will only exit my sell position if the candle formation for tomorrow 1st of may speak otherwise by the end of the day

eur/jpy entry

pending buy limit @ 123.56 ............... apply same trading principle

eur/usd entry

we entered two pending positions, buying eur/usd par-adventure we are not on sit, the key point is price reaction and candle formation @ the support  which is our entry. keeping in mind the possible interest   rate reduction or hike in the euro zone, our approach to the market will be flexible this week.

EUR/USD POSITION FOR THIS WEEK 28/04/2013

we are working with this levels on 4hr, the blue and red circle, for this week and next if the market fail to break those levels. candle formation at those level will be key in determining our entry and exit when the market opens, and our trading opinion or signal will be posted as well.
Earlier, i said this week and next, i said that because the market will still have the memory of those price level, same principle on 1hr,4hr and daily............. same price action strategy, we only observe the market  memory of price,


thank you

PRICE ACTION STRATEGY MAKE'S TRADING EASY

For some month now, i have been following price action base on post i see on forum on face book, posted by ahize chris, i thought working with pivot point was the best i will ever know. i did more research and realize that the market has memory, at time short memory when applying price action on  1hr chart and those level where we notice market reversal or price action has i have unlearn to learn.......  what the term price action, or “action price” actually means. Well, there is no true definition of these terms, but in simple English, it is a trading technique that allows you to read the market and make trading decisions based on the actual price movements or action of prices as they undulate on a chart, rather than relying on lagging indicators. Most indicators are derived from past prices on the chart, so they are in fact, giving you information on lagging price movements. Stop the madness of using indicators and learn how to trade by understanding how to read a price chart today!
Why would you want to base your trades on past information when the most important factor in trading is what prices are doing right now, and what they are most likely to do in the very near future? Using our strategies, we can help you to learn what prices are most likely going to do in the near term, rather than trying to guess using lagging and misleading indicators. There are some traders and some large institutions that actually fade the indicator movements for the sole reason that so many losing traders use them to base their trade decisions. That alone should tell you that they are a losing game in most cases.
One of the most common themes we hear in trading is that “the trend is your friend!” This is a very true statement, but the second most common theme to losing traders is that they are always looking for tops and bottoms and thus end up counter trend trading the majority of the time and this causes them to lose money. The million dollar problem to trading with the trend is knowing when the trend is in play, and when it is actually ending and a new trend is beginning.
The market can actually only do three things. It can trend up, it can trend down, or it can chop around in a trading range.

Start Thinking in $ and Not Pips! by one of my mentor (Barisiba kelvin s)

It constantly amazes me when talking to traders and they work out profit or loss in pips. A common question I get asked is “how many pips should I make trading price action” Or another example is “should I have a minimum pip profit target each month?” What the traders asking these questions fail to understand is pips don’t determine whether you are profitable or not.

Negative Pips but Positive $

The reason traders need to stop working out profit and loss in pips is because pips are deceiving. Traders can be negative pips over a few trades but can still be making money. To some reading this they will be wondering what I am talking about so stay with me as this is article is definitely for you!

Before we enter trades we should be working out the correct trade size. We should always be risking the same percentage of our trading accounts on every trade. The only thing that will change is the stop size. Depending on how big or small the stop size is will determine how big the trade is we need to put on.

By doing this we will be risking the same percent every trade, no matter how big the stop loss is in pips. This means that every trade we enter will be a different amount.

Many traders simply see a trade and enter the same size trade regardless of the stop loss or pair they are trading. This is very dangerous because placing the same size trade every trade does not mean we are risking the same amount of money every trade.

The stop size for each trade will change dramatically. We could have a 20 pip stop on the 1 hour chart but a 200 pip stop on the weekly chart. If for example we are entering both these trades with the same 2 standard contracts the amount of real money risked in both trades will vary massively. The loss the trader would take on the weekly trade is 10 times the size the loss they would take on their 1 hour chart trade.

Correctly Calculating Positions Size

Most traders work out their risk per trade using the 3% method. What this basically means is each trade no matter what the pair or stop size, they are willing to risk 3% of their trading account capital. One trade may have 30 pips for a stop size but another trade may have 150 pips stop. In both trades using the 3% method the trader will be risking 3% of their account total.

Using this method the trader will have to open a different amount for each trade, but they will still be risking the same percentage of their trading account.

To work out the trade size the trader needs to put on for each trade I recommend using a position size calculator. There are many of these that can be found on the internet. Simply Google “position size calculator”. This tool will look like this:

Start Thinking in Money Terms

Now you have learnt how to open the correct size trade it is important you start thinking in terms of money and not in pips. As I said at the start of this article you could be negative pips for the month but making money!

An example of this is you place two trades. Both these trades are risking 3% of your account. On trade 1 you lose the trade that had a 200 pips stop. You are now -3%. You then open a trade on the 1 hour chart and have a stop of 20 pips. You win this trade and make 40 pips or double your risk which would be +6%. So whilst overall you are down 180 pips you are still positive 3% in your trading account!

As you can see from the above example working trades out in pips makes no sense. Start working out each trade using a position size calculator and never over risk on any one trade. It is still important to track your pips made and lost but it does not determine whether you make or lose money.

Now you have the knowledge of how to correctly manage your trade size there is no reason to ever over risk on any one trade. There is also no excuse to not place trades because the stop loss is too large. As you have just learnt it doesn't matter how big the stop loss is because you will be simply altering your trade size depending on how large the stop is.

Thanks for your time.