Cause & Effect Trading and Methods of Analysis

I'm tired of losing money on Forex!



I have no savings left and I have problems in the family.

I'm tired of using technical indicators and moving averages, fundamental newa, patterns and levels of support and resistance, trend following, market profile, volume analysis, COT reports, options analysis! Everything Sucks!

Now I'm trying to understand and use cause and effect methods like Volume Spread Analysis and Locked-in Range Analysis. And I understand again that I did everything wrong before. I undestand that I was a Lucky-trader.

I like cause and effect trading and want to try it.
Do you know Cause & Effect Trading Strategies?

I always laugh when saw the picture, huahahahaha wkwkwkwkwk kikkikkikkik hihihihihi xixixixixi.
thanks for remembering the picture.
I do not now cause & effect trading strategies.

The best tool you have is your brain. Why do you have to have someone else's strategy? Make your own based on your own observations from a raw chart. If you can observe one habit the market has, you can exploit it for your benefit. That is all you need.

bego nih, malah ngeluh wkwkwkwk belajar terus lah sampe mahir.


The 5 Steps to becoming a trader

Step One: Unconscious Incompetence.

This is the first step you take when starting to look into trading. you know that its a good way of making money because you've heard so many things about it and heard of so many millionaires. Unfortunately, just like when you first desire to drive a car you think it will be easy - after all, how hard can it be? Price either moves up or down - what's the big secret to that then - lets get cracking!

Unfortunately, just as when you first take your place in front of a steering wheel you find very quickly that you haven't got the first clue about what you're trying to do. You take lots of trades and lots of risks. When you enter a trade it turns against you so you reverse and it turns again .. and again, and again.


You may have initial success, and thats even worse - cos it tells your brain that this really is simple and you start to risk more money.


You try to turn around your losses by doubling up every time you trade. Sometimes you'll get away with it but more often than not you will come away scathed and bruised You are totally oblivious to your incompetence at trading.

This step can last for a week or two of trading but the market is usually swift and you move onth the next stage.

Step Two - Conscious Incompetence

Step two is where you realise that there is more work involved in trading and that you might actually have to work a few things out. You consciously realise that you are an incompetent trader - you don't have the skills or the insight to turn a regular profit.

You now set about buying systems and e-books galore, read websites based everywhere from USA to the Ukraine. and begin your search for the holy grail. During this time you will be a system nomad - you will flick from method to method day by day and week by week never sticking with one long enough to actually see if it does work. Every time you come upon a new indicator you'll be ecstatic that this is the one that will make all the difference.

You will test out automated systems on Metatrader, you'll play with moving averages, Fibonacci lines, support & resistance, Pivots, Fractals, Divergence, DMI, ADX, and a hundred other things all in the vein hope that your 'magic system' starts today. You'll be a top and bottom picker, trying to find the exact point of reversal with your indicators and you'll find yourself chasing losing trades and even adding to them because you are so sure you are right.

You'll go into the live chat room and see other traders making pips and you want to know why it's not you - you'll ask a million questions, some of which are so dumb that looking back you feel a bit silly. You'll then reach the point where you think all the ones who are calling pips after pips are liars - they cant be making that amount because you've studied and you don't make that, you know as much as they do and they must be lying. But they're in there day after day and their account just grows whilst yours falls.

You will be like a teenager - the traders that make money will freely give you advice but you're stubborn and think that you know best - you take no notice and overtrade your account even though everyone says you are mad to - but you know better. You'll consider following the calls that others make but even then it wont work so you try paying for signals from someone else - they don't work for you either.


You might even approach a 'guru' like Rob Booker or someone on a chat board who promises to make you into a trader(usually for a fee of course). Whether the guru is good or not you wont win because there is no replacement for screen time and you still think you know best.


This step can last ages and ages - in fact in reality talking with other traders as well as personal experience confirms that it can easily last well over a year and more nearer 3 years. This is also the step when you are most likely to give up through sheer frustration.

Around 60% of new traders die out in the first 3 months - they give up and this is good - think about it - if trading was easy we would all be millionaires. another 20% keep going for a year and then in desperation take risks guaranteed to blow their account which of course it does.


What may suprise you is that of the remaining 20% all of them will last around 3 years - and they will think they are safe in the water - but even at 3 years only a further 5-10% will continue and go on to actually make money consistently.


By the way - they are real figures, not just some ive picked out of my head - so when you get to 3 years in the game dont think its plain sailing from there.


Iv had many people argue with me about these timescales - funny enough none of them have been trading for more that 3 years - if you think you know better then ask on a board for someone who's been trading 5 years and ask them how long it takes to become fully 100% proficient. Sure i guess there will be exceptions to the rle - but i havent met any yet.


Eventually you do begin to come out of this phase. You've probably committed more time and money than you ever thought you would, lost 2 or 3 loaded accounts and all but given up maybe 3 or 4 times but now its in your blood

One day - im a split second moment you will enter stage 3.

Step 3 - The Eureka Moment

Towards the end of stage two you begin to realise that it's not the system that is making the difference. You realise that its actually possible to make money with a simple moving average and nothing else IF you can get your head and money management right You start to read books on the psychology of trading and identify with the characters portrayed in those books and finally comes the eureka moment.

The eureka moment causes a new connection to be made in your brain. You suddenly realise that neither you, nor anyone else can accurately predict what the market will do in the next ten seconds, never mind the next 20 mins.


Because of this revelation you stop taking any notice of what anyone thinks - what this news item will do, and what that event will do to the markets. You become an individual with your own method of trading


You start to work just one system that you mould to your own way of trading, you're starting to get happy and you define your risk threshold.

You start to take every trade that your 'edge' shows has a good probability of winning with. When the trade turns bad you don't get angry or even because you know in your head that as you couldn't possibly predict it it isn't your fault - as soon as you realise that the trade is bad you close it . The next trade or the one after it or the one after that will have higher odds of success because you know your system works.


You stop looking at trading results from a trade-to-trade perspective and start to look at weekly figures knowing that one bad trade does not a poor system make.


You have realised in an instant that the trading game is about one thing - consistency of your 'edge' and your discipline to take all the trades no matter what as you know the probabilities stack in your favour.

You learn about proper money management and leverage - risk of account etc etc - and this time it actually soaks in and you think back to those who advised the same thing a year ago with a smile. You weren't ready then, but you are now. The eureka moment came the moment that you truly accepted that you cannot predict the market.

Step 4 - Conscious Competence

You are making trades whenever your system tells you to. You take losses just as easily as you take wins You now let your winners run to their conclusion fully accepting the risk and knowing that your system makes more money than it looses and when you're on a loser you close it swiftly with little pain to your account

You are now at a point where you break even most of the time - day in day out, you will have weeks where you make 100 pips and weeks where you lose 100 pips - generally you are breaking even and not losing money. You are now conscious of the fact that you are making calls that are generally good and you are getting respect from other traders as you chat the day away. You still have to work at it and think about your trades but as this continues you begin to make more money than you lose consistently.

You'll start the day on a 20 pip win, take a 35 pip loss and have no feelings that you've given those pips back because you know that it will come back again. You will now begin to make consistent pips week in and week out 25 pips one week, 50 the next and so on.

This lasts about 6 months

Step Five - Unconscious Competence

Now we’re cooking - just like driving a car, every day you get in your seat and trade - you do everything now on an unconscious level. You are running on autopilot. You start to pick the really big trades and getting 200 pips in a day doesnt make you any more excited that getting 1 pips.


You see the newbies in the forum shouting 'go dollar go' as if they are urging on a horse to win in the grand national and you see yourself - but many years ago now.

This is trading utopia - you have mastered your emotions and you are now a trader with a rapidly growing account.

You're a star in the trading chat room and people listen to what you say. You recognise yourself in their questions from about two years ago. You pass on your advice but you know most of it is futile because they're teenagers - some of them will get to where you are - some will do it fast and others will be slower - literally dozens and dozens will never get past stage two, but a few will.

Trading is no longer exciting - in fact it's probably boring you to bits - like everything in life when you get good at it or do it for your job - it gets boring - you're doing your job and that's that.


Finally you grow out of the chat rooms and find a few choice people who you converse with about the markets without being influenced at all.


All the time you are honing your methods to extract the maximum profit from the market without increasing risk. Your method of trading doesnt change - it just gets better - you now have what women call 'intuition'

You can now say with your head held high "I'm a currency trader" but to be honest you dont even bother telling anyone - it's a job like any other.


I hope youve enjoyed reading this journey into a traders mind and that hopefully youve identified with some points in here.


Remember that only 5% will actually make it - but the reason for that isnt ability, its staying power and the ability to change your perceptions and paradigms as new information comes available.


The losers are those who wanted to 'get rich quick' but approached the market and within 6 months put on a pair of blinkers so they couldnt see the obvious - a kind of "this is the way i see it and thats that" scenario - refusing to assimilate new information that changes that perception.


Im happy to tell you that the reason i started trading was because of the 'get rich quick' mindset. Just that now i see it as 'get rich slow'

If youre thinking about giving up i have one piece of advice for you ....

Ask yourself the question "how many years would you go to college if you knew for a fact that there was a million dollars a year job at the end of it?

Take care and good trading to you all.


this the man https://www.forexfactory.com/diallist

I'm trying many times to create profitable strategy but I'm losing every time. I curse that day when I started trading. I need help and a profitable trading strategy to win back.

Try doing the opposite of what you were doing

There's no such thing as cause and effect trading. But.....
If you are trading and have no savings then you have a problem with priorities.

aka the holy grail...

Is it real? Is it work? Do you try to do like that and earn big money in the market?

Alex -

Take a break from day-trading if that's what you're doing.

Look for uptrends. Go long when price prints a pull-back and starts to recover. Set a stop below the low of the pull-back. Get out manually when the trend starts to print another pull-back. Get long again when price starts to recover from that pull-back. Keep doing this. Do the reverse in downtrends. How can this lose money?

That Locked in Range Analysis is a lie. There're no market makers at the CME futures exchange. See my posts in that thread. The OP ignored me so that he can hide my posts from public view. The reason you still see both deliveries and receives on contract expiration day on report for HSBC and other banks is that, those big banks have both commercial and speculative trading, and within each business unit they have multiple accounts, it's like each trader trades a separate account. So on expiration day, some accounts end up with deliveries and some other accounts end up with receives. Their trading does add liquidity to the market but that does not make them a market maker. Plus, the transaction volume of currency futures is only a fraction of that of the spot forex market. It's the spot forex market that leads the futures market, not the other way around. When price of eurusd goes up at the spot market, 6E price at the futures market has to follow and go up as well. And, at the spot forex market, retail traders' transaction volume is only a fraction of that of the institutions. So basically retails traders' transactions don't move price much. It's the institutions transactions that determine the price.

Don't be afraid to start the trading way from very beginning. Trade with the small lot and use the main simple trading principles, like trend trading. Trade according to the trend with small lot you will be able to stay in market during the correction. And after you start your profitable line, try to add some new analysis in your strategy...

Wow. What a deep understanding of the market. Guess you are very rich trader. Please advise me the trading method and strategy for making stable money in the market. Can you show me your trading results? I ready to pay you for the mentoring.

I've lost enough money by trend following. Stop advising me sucks!!

I'm sorry to hear it Alex, but you are honest enough to report your bad experience. Have you any conclusions as to how it went so badly for you?

No I'm not that good a trader. I'm still far from where I want to be. And don't pay me and don't pay anybody. In this business there are no shortage of scammers. Generally the really profitable traders would rather teach you for free than teach you at a cost.

Its a kind of pic which people need to see it when they are trying to enter in forex market as a newbie so they learn from this instead of going through the whole JOURNEY of painful process which everyone else had gone through and as someone has told 'The wise man learns from someone else’s mistakes, the smart man learns from his own, and the stupid one never learns.'

Now coming to the point on how to trade profitably using the law of cause and effect principle,but the thing is most people do not understand this principle properly meaning they do not know what is the cause behind that particular effect.So they blame their losses to bad luck,trading systems,indicators or Eas.

Now just because we do not know the actual cause doesnt mean that it doesnt exist.Its just that most people are failing to identify it.

This leads down to the begining of understanding the power of unconventional technical analysis which most people are completely unaware at this point.

If you are interested in that path try searching learn before you lose From the author Wd gann.
Another one you can search is fractal market hypothesis.

Alex,

The other day I was in a hurry and there was something else I wanted to say about LRA. Sometimes price does bounce off a trading range. However, the reason is not manipulation by brokers, but the traders themselves. In a trading range that lasted a long time with big volume, a lot of transactions occurred. Some went long, some went short. Then price broke out above the trading range. So those bulls were in profit and those bears were in a loss. After price went up for a while, for whatever reason, price went down a little. As it went down, it triggered trailing stops set by those bulls. A trailing stop for a long order is a sell order. The selling from triggered trailing stops will bring price down further. The trading range was where the earlier bulls started and their break even point. As price went back into the trading range, the earlier bulls, if they had not exited the market by trailing stop, would exit the market now by break even stop (also a form of trailing stop), as they wouldn't allow their earlier profit turn into a loss. After all those earlier bulls left the market, there was no more selling from those trailing stops from earlier bulls so selling pressure was lessened. On the other hand, price at the moment was pretty much the break even point of earlier bears. The earlier bears had been under water for some time and now they were back to break even so they grabbed this golden opportunity to exit the market by closing their short trade with a buying order. The buying from the earlier bears closing their short trade would push price back up. That's why price bounced off the trading range.

Trading is very hard. Only 5% of traders make it. For those who make it, it generally takes them at least 3-5 years of hard working. I'm a VSAer too. VSA works. However, it's still not easy trading VSA. Even if all traders in the world trade VSA (or any other strategies in the world) the % of traders who make it will not be much more than 5%. I combine VSA with price action and auction market theory.

At last, anyone who offers to teach/ mentor you at a cost is a scammer. Remember, those who can, do; those who can't, teach. All educational stuff you need for success in forex is freely available on the internet.

u r analysing d wrong thing

eurusd 1 hr chart globally is identical. find what is changing n analyze it