The Trader's Academy - by Traders for Traders

The idea behind this is to have one single thread where anyone here on Forex Factory can share ideas, tips, strategies, knowledge, anechdotes and experience for the benefit of others. You can post anything you like as long as it is designed to help others master the many facets necessary to become a successful trader, whether it be market knowledge or psychological hurdles that need to be overcome. This thread therefore is meant to compliment the interactive trading threads where traders call their trades and discuss levels etc, by concentrating on the skills necessary to consistently put on winning trades. Traders here who post screenshots clearly showing why a given trade was or wasn't successful, will be especially welcome as long as their explanations are clear and easily visible.

This then will hopefully be a purely egalitarian thread, by traders for traders, with one clear goal in mind, which is to help others by sharing what you yourself have learnt, without of course, giving too much away when it comes to the finer details of your own strategy if you don't want to.

As I personally have been trading professionally for seven years, I shall of course be chipping in from time to time as I feel I have quite a lot to offer, but this thread is primarily about you, not about me, so let's click on the ' post new thread ' box and see if anyone wants to make a start

i think we also need a subject about brokers ,and it better be reviewed by brokers ,about trading cut loss fast let profit run ,use classical analysis learn it from jhon muphy books.
i will add more later
all have a nice day

We look forward to it Orabi

I'll quickly say a word or two about how I trade and what I've learnt trading this way. I have several time frames open infront of me at any one time, and I only ever concentrate on ONE market at a time - sure I miss plenty of action going on elsewhere, but in the long run, it works best for me that way. I use time frames as small as 3 seconds, yes 3 seconds, and have a selection of times frames visible up to the hourly, but also checking the H2,3,4 and daily periodically, and I have six monitors. The advantage of this is that I can capture many of the smaller moves whilst having a clear idea of where support and resistance for that particular trade and for the day. By the way, I trade mostly the Dax simply because it is the most volatile market out there and the moves are fast and numerous, you get a few duff days, but not many. The most important thing I have learnt trading a multi-time frame method like this one is not be be too influenced by what is happening on the bigger time frames - If there is a perfectly good buy signal on the 30 second chart, but the 5 or 10 minute chart is showing resistance just above, just take the trade anyhow and move your stop loss up to BE once the trade has given you some breathing space - it took me quite a while to truly master this, which probably means something like many of us tend to spend more time looking for reasons not to trade than we do for reasons to trade, especially if we're fearful of losses.

I think that'll do for starters. I'll post a few charts later on.

Over to you

Nice thread Sir...
Freedom to all ideas/strategies...freedom to all participants...
Informative,knowledgeable as well as inspirational.

Someone asked me about the trading platform I use, because they have no access to time frames any smaller than 1 minute on MT4. This was my answer -

You are right, MT4 doesn't support TFs less than 1 minute which is why I don't use it. I use those supplied by IT Finance. You can get them either by way of a monthly subscription to 'Prorealtime', or free with IG Index if you trade a minimum of two trades per month, or completely free from ' Intertrader ', but IG Index are best as they offer much more historical data for backtesting purposes.

Thanks hanuraj, hopefully it will be all of those

Heres a short story that serves as the prologue to Jack Schwager's The New Market Wizards. Enjoy:

The Jademaster

One cold winter morning a young man walks five miles through the snow. He knocks on the Jademaster's door.
The Jademaster answers with a broom in his hands.
"Yes?"
"I want to learn about Jade."
"Very well then, come in out of the cold."
They sit by the fire sipping hot green tea. The Jademaster presses a green stone deeply into the young man's hand and begins to talk about tree frogs. After a few minutes, the young man interrupts.
"Excuse me, I am here to learn about Jade, not tree frogs."
The Jademaster takes the stone and tells the young man to go home and return in a week. The following week the young man returns. The Jademaster presses another green stone into the young man's hand and continues the story. Again, the young man interrupts. Again, the Jademaster sends him home. Weeks pass. The young man interrupts less and less. The young man also learns to brew the hot green tea, clean up the kitchen and sweep the floors. Spring comes.
One day, the young man observes, "The stone I hold is not genuine Jade."
I lean back in my chair, savoring the story. My student interrupts.
"OK. OK. That's a great story. I don't see what it has to do with making money. I come to you to find out about the markets. I want to learn about the bulls and the bears, commodities, stocks, bonds, calls and options. I want to make big money. You tell me a fable about Jade. What is this? You ..."
"That's all for now. Leave those price charts on the table. Come back next week."
Months pass. My student interrupts less and less as I continue the story of The Trader's Window.

-from The Trader's Window,
Ed Seykota

If you've read ' Trading in the Zone ', you'll probably have seen this interview, but if not, then this is a really great discussion on the psychology of trading.

Psychology in trading is massive, any trader will tell you that, because no matter how good your technical method, you've got be unburdened with the usual demons that so many people have. Leaving that aside though, let's focus on the key technical indicators traders use. Personally I use moving averages to give my charts structure and to help me determine momentum, change of direction, and support and resistance. I use candlestick observation which can be really useful for entries and exits. Trend lines again to help determine mainly areas for entering a trade. MACD for divergence. Bollinger bands to help with placing my stop loss, ie, outside of the band, and Fibonacci - really important for support and resistance for main moves and for pull backs. That is really all I use, but they key is to have your indicators correlating with or supporting each other, as nothing works in isolation. I try to keep things as simple as possible - the more cluttered the charts are, the more difficult it is going to be to read them. Trading really is one of those endeavors that is as easy or as difficult as you want to make it.

There are hundreds of indicators out there, but as with most things in life - simplest is always best.

Yeah make it "All under One Roof (Thread)"

~hanuraj

One of the hardest things about learning how to trade is that no one gives a shit. If you are training to become a doctor, an engineer, a teacher or some other worthy professional, your friends and family will be proud of you and shower you with praise and encouragement, but when you are locking yourself away in some small room at home, unseen and unknown to the world for hours and hours a day, people think you are a fool, a dreamer, a gambler, someone who doesn't want to work for a living. Speak to any successful retail trader and I guarantee they will say the same thing. Trading is not seen as a profession until you become good at it, but often by that time, you have usually lost a lot of money, quite a few friends, and maybe even a wife or girlfriend.

This is one aspect of trading that very few people talk about, but I think it is really important that new aspiring traders understand it and are prepared for it. It's great when you finally make it, but there is a great deal of pain along the way, and I do speak from experience. It's all about belief, belief in yourself, and you'd better have it in bucket loads because it is not something that you will get much of from those close to you when you are new to trading. Belief, conviction, patience and perseverance will get you through it, but self-doubt, especially that instilled by others, will kill your dreams comprehensively because with the wrong attitude and mindset, there is no less forgiving place in the world than the market.

This guy has some great advice - check out his other videos as well.

Makes perfect sense.

This morning's London open for the Dax. The potentially most profitable time to trade is around the London open, because the price will usually initiate a big move around this time, and if you can learn how it moves, a day's pips can be captured within the space of a few minutes. This is the 30 sec chart. How does one know which way it is going to move? Look at the 200ema moving average? Here it is just above. Next chart up, which is my 3 min chart, the 200ema has also crossed above the price, as it has done on the 10 min chart - conclusion = the price is going to fall. Watch the candles carefully - usually you'll get a short counter move, followed by a strong negative candle, perhaps two, but most importantly, you'll be looking for bearish candles here, such as hammer and or Doji. These are the candles which give the signal for traders to pull the trigger as long as everything else is in place.

I'll welcome any comments or anything anyone wants to add to this.

With this thread, I'll give it a week or so, and if I see that no one is particularly interested in contributing to it, I'll give it up, because as I said in the into, I didn't want to start a thread where it is just me doing the posting, so if it turns out that way, I'll let it go.

I wonder if anyone has anything to say about exit strategies - very important?

Absolutely. A system/method is incomplete without one.

I would say the exit strategy is THE MOST IMPORTANT part of a trading system. Without a good exit strategy, everything you did is wasted. With a good strategy, it can salvage a bad entry and turn a potential loss into a winner.

Yes the important part of an exit strategy is knowing beforehand where, based on your own technical analysis, you think the price is going to head for, whether it be a moving average, pivot point, round number , fib level, or a combination of some of them. Using moving averages is also a good way, as you simply have one which follows the price and you exit when it is crossed, though this won't work very well if the price is chopping about all over the place. Some people use an arbitrary number of points as a ratio to their stop loss, but that will usually see you missing out on most of the big moves. Far better to determine your support and resistance on whatever time frame it is you are following, and exit when the price reaches it.

Great quote I've just heard, here it is -

" People coming into trading need to be certain that trading is what they really want to do. Trading is trans formative - you won't go out the same person that went in because in terms of who you are, you will be forced to see your failures in the mirror all the time, and you will keep seeing them until you transform yourself to elevate to the next level, and then you go through that process again..."

Francis Hunt.

This was a shot I took last Wednesday Sept 9th which I posted on the Carpe Diem Dax and Dow thread warning of a possible drop due to this very clear diversion with MACD. The shot was captured just after 10 am London time, and at 14,30 after a period of sideways movement the Dax plunged more than 350 points. So watch out for diversion, on all the time frames, because it can be a very strong signal of a change of direction, as it was here. I've also posted the historical chart after the drop had happened.