What have you learned?

Golden Rules [Taken from my private discord group]
- Accept that you will be wrong. Take the loss and learn from it.
- Accept that you will lose, even if you're right. Stick to your rules.
- Be disciplined. Keep to your rules. Keep emotions away.
- Capital preservation is important. Keep your risk consistent. If you risk 1% of your capital, then keep it constant. If you risk 3% of your capital, keep it constant too.
- If you're worried about how much you're going to lose, reduce your risk. You're risking too much now.
- No should've / could've / if only. I would have been a millionaire by now.
- Overtrading doesn't mean higher return.
- Risk management is important.
- React; Do not predict where the price will go. Let the market tell you where the price will go.
- Strategies based on luck is not consistent.
- There is always another setup. If you miss this one, wait for a re-entry or just close your charts. Do not enter at a bad price.
- Treat your results in terms of % and not monetary value. My $1,000 a trade risk could be 1% of my capital, but 10% of yours.
- You will miss a lot of winning trades. Be patient.

Lessons learned the hard way

1. Safety First. You can’t rescue anyone if you’re dead; you can’t make money if you lose all of it. A close corollary to this is, is to trade defensively. Take a break-even close, and snare, using a phoenix line, rather than just letting nature take its course.
2. Stick to the plan. A whole host of trading problems can be avoided by simply following this one rule, but it’s easier written than done. This one rule encompasses all the other rules and avoids things like:
   1. Getting spooked by meltdowns, melt-ups, last-minute price spikes, news spikes. If the trade isn’t invalidated yet, stick with it.
   2. Conversely, chasing juicy looking trends that are well underway, even maturing
   3. If your plan says X should happen when Y happens and that isn’t the case, get out of the trade as soon as practical. This isn’t just about cutting losses, but about noticing things like lapsed cycles, unusually strong bullish/bearish action for the time and cycle/wave period. Or just general fuckery, like a DJT/Elon tweet. You can’t control any of it. Don’t act like you can.

   
   

3. Don’t over-trade.Neither too heavy (too much risk) or too often. Your plan has to define how often you should be trading, and how much, but you’ll know when you’re being naughty. You only need one good trade a day/week/month to get wealthy.
4. Trade with the trend. Your trading horizon(s) determines your trend, and sometimes you’ll be wrong because there’s a fundamental cause you don’t know about, but there are so many opportunities in the market that there’s never a (good) reason to trade counter-trend. Go with the flow. Having trades on the wrong side of the trend does not change what is the true trend. Don’t hope. If the trend can be defined as half of a cycle then trading the trend simply means trading the correct half of a sufficiently large cycle, in the direction of the underlying sum of all cycles.
   1. In order to justify a small trade it must be in alignment with a larger move already in progress. This is very similar to ‘don’t trade countertrend’, but the difference is on a small TF you might be blind to the real trend and see the temporary excursion going on as the real trend. Taking a smaller sip of the bigger stream should always be your main objective. Getting scuppered by a higher degree reversal will be rarer than getting trapped by a false reversal (one that is very brief, never materializes or is too late).
   2. Cue one of the many metaphors I’ve considered for describing trading: It’s like a thirsty man who extends his arm towards Niagara falls to attempt to get a refreshing draught. The goal is to fill his cup as much as possible without getting caught in the rushing water and falling to his doom. Multiple smaller sips from a teacup is preferable to holding a large barrel.

   
   

5. Trade only at extremes. Give your trades the best chance for success by only entering trades that are at unusual extremes - a deep retrace in a trending market, with no news basis, price piercing 2 or 3 bands and is now turning back. The market exists to correct mis-pricing so look for mispriced instruments that are ready to revert. And take your time doing this, see #2, better to be right and sit tight, than to trade from boredom. Wait for an outer band touch and use pending orders where you expect those touches to take place to get the best price. Using pending orders is particularly important in ranges and in reversal trading systems, as you have a good idea where price will get to but you don’t have the luxury of a long trend to make a trade profitable so you must get in at an optimal level.
6. Be alert. Don’t trade tired. Especially if adequate sleep is an issue. Wait one hour after waking - just analyzing, reading news, charts, before considering making a trade. Be aware of aggression bars and where the trend is going, what is merely a retrace and what is real impulse. This also means being aware of red news days, and not letting a fundamental cause take you by surprise. Of course, sometimes the market is erratic and there is no cause but the news will try to fabricate one - don’t take it too hard, just remember to...
7. Cut your losses when it’s appropriate. Tight stops are not the answer. You need to have targets, both time and price, and if your trade no longer can meet those you should exit as soon as you know. The criteria for determining failure should be established before the trade is placed. If you’re in the unfortunate position of being close to a margin call be sure to balance the positions that you’re closing to avoid a ‘cascade failure’ where many positions get stopped out automatically when that wasn’t your intention.
   Most importantly, take the loss.
   
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8. Don’t double down.If you were wrong, exit and figure out why; don’t trade more.
9. Don’t stare at the charts. Don’t tinker. Don’t second-guess. Don’t waste your time. Once you’ve established your expectations and limits, and made the trade, it’s time to walk away, secure in knowing your backups and notifications are in place, and that you’ll be checking back in at a predefined time. The market will do everything it can do to throw you but the only things you should care about are the time, target and whether the trade is at an undesirable extreme (no longer salvageable).
10. Let the market move first. If trading is like chess, always bet on Black. Wait for the market to tip its hand, show what it believes and then react to what’s already in motion rather than putting a line out and waiting for it to get ripped out of your hands.
11. Stay flexible, mentally, so you can react quickly. Don’t get bogged down in a trading bias you established from one analysis made quite a while ago. You need to be able to re-evaluate and accept that a trade is failing or a trading bias for the time period you’re trading is (now) wrong. Sometimes that means reversing course; sometimes it means exiting and looking for other opportunities. Don’t just stew and let a bad situation worsen. “Luckily I wasn't too committed to my target and I reversed quickly and profited from the big drop. That's probably more valuable than any forecast ever will be - the ability to remain flexible and noncommittal and to react quickly to reality. “
12. Examine the board from every angle. Just as in chess, where you can misread a position because you failed to account for some piece of information, you can misread a situation that’s developing because you only looked at one timeframe, or didn’t calibrate to a wave that makes sense. This is where a checklist can come in handy.
13. Keep it clean. Indicators are OK, just fine, maybe necessary in some cases but limit yourself. If you’re using something busy, then confine it to one terminal and use your other indicators on another chart. Trade when they’re both telling you the same thing. Lately I’ve been opening two charts for every instrument, one with indis, one ‘clean’. Having said this if you are using an indi pay attention to it, otherwise what’s the point?
14. Timing is Everything. Don’t trade at the end of the day. Don’t trade in front of red news unless you’re news trading. Mind the cycle. When price is approaching your target (price or time) be more cautious not less.
15. Go against the crowd. I used to think the crowd generated the trend. They don’t. They trade against it. Weird. Their madness is your compass rose. It’s not as simple as just doing the opposite though. There’s a ‘harmonic mix’. Oanda used to have a historical positions chart that you could use to see this in action but I think you need to pay for it now as it's actually useful.
16. Act without hesitation. He who hesitates is lost. If you spot a chance to permanently remove a bad trade from the record by cancelling it out with a good one don’t get greedy and hold out for a bit more. Make the swap. If a setup meets the requirements take it.
17. The purpose of lower time frames is to fine-tune entries and exits, not to find trades. HFTs and sophisticated EAs can possibly make this work, but you humans should look for trades at extremes on higher time frames, then feel free to scalp them. You only need one good trade a day.
18. Synchronize forecasts with big upcoming news. If a major reversal is expected around the same time as an FOMC press conference, look for price to change just before or after the statements. Don’t trust that the 40 week peak is going to happen the week before during a low-importance news cycle just because an indicator says so.
19. Knowing when to enter is less important than knowing when to exit. Knowing when to exit is less important than knowing when to re-enter. Re-entries (or add-ons) are the soul of profitability. If you can get this right you have won most of the battle. So make sure your trading plan includes clearly defined rules about all 3 actions and that your edge is in play when re-entering. Don’t re-enter on whims and unexpected movements.
20. Be strategic. Ramp up risk gradually, don’t push your luck early in a trend by holding for a higher profit rather than exiting at the first sign of trouble. Once you’ve built up some equity or have safely increased your balance (holding house money) then you can hold longer to see if a trend will recover, without going underwater. Success begets success, and by managing risk to match your ability to withstand it, you can grow safely. Trade heavier when you need to recover a position that’s beyond hope. 3x should be enough. If you’ve analyzed a situation properly you shouldn’t be wrong more than twice, although never say never.
21. Find the least ambiguous trades. Don’t trade in the middle of any move or trend or cycle, definitely don’t get in at the end. Wait for the next entry point as there will always be another one somewhere. Look ahead for the next likely entries and keep a journal or a calendar so you can be reminded. Trade larger cycles with more weight.
22. Don’t Be Casual. Trading is a profession. Be professional. The more crucial the trade, the pickier you should be about clarity and getting the best price. Especially when picking the first trade for a new account, be extra selective. Wait for a cycle junction. Wait for a calendar event. Wait for a high degree band touch. Wait for a confluence of all 3 and/or other factors and then start small and ramp up. Losing days, weeks, even months are OK but always win in the end.
23. Know your weaknesses. In my case I’m particularly susceptible to:
    1. Chasing price
       1. Don’t chase price. Place pending orders and wait for the market to tip its hand before entering. Let price hit your stops and then don’t be afraid to re-enter if it’s necessary.

       
       

    2. Listening to others - an offshoot of advice-seeking.
       1. If you consult with 3 experts you will get three different opinions. Aggregated opinions don’t represent clarity, but rather the state of the herd.system

       
       

24. Don’t put too much faith in your oracle (forecasting). Predicting is hard. Especially predictions about the future, to quote the Danish proverb. Forecasting is effortful as I’ve mentioned before and can often be just as wrong as a stochastic approach. Cycles have turned out to be not much more useful than a SMA or SMMA in practical terms, and can sometimes seem miraculous but they have yet to prove their worth in terms of the time it demands. Anything can happen within your chosen probability space - so it’s likely better to diversify and pick your lines in the sand, and then do something else of value. Note this isn’t the same thing as having a clearly defined target in mind. Also to the extent that forecasting is useful, it must be done completely or not at all. Don’t just draw some trendlines in isolation and expect them to mean anything. You need to take into account the stories on all TF and the fundamental picture.

ADVANCED

1. Don’t be too predictable. Once you achieve a certain measure of success, and it is probably less than you think, certain people will take an unkind interest in you. Much as a sniper cannot risk shooting twice in the same location lest he betray his location, a winning trader should keep his broker (and others) guessing by hopping between systems and instruments, even switching brokers partially or entirely from time to time.
2. Separate your risky income from your operating income. Don’t end up like Jesse Livermore. After you’ve gained a predetermined level of success, siphon off some risk income into your savings/long-term investments since this is a bloodsport, and even the glorious can fade into oblivion.
3. Have more than one broker. Especially when one is actively trading against you. This is a great opportunity to win in one account while you fend off a loss in the other. Make sure the brokers aren’t actually the same outfit, for example, [a large well-known broker] owns a whole bunch of smaller brokers that go by different names but they're all the same org and share their data about traders, freely, you can be sure, no matter the actual legalities.

Nice thread, btw. Good to see posts that are more than chest-thumping on the factory.

This is the best advice I've ever seen in any forum anywhere on the internet!
It's time to dive into Discord.

Remember that Bob Hope comedy cowboy movie where he gets mistaken for THE deadshot sherriff ?
Everyone gives him advice. Have the sun behind you etc. advice when he is forced into a shoot out.
He has no idea how he manages to shoot the baddies But we know his gorgeous pistol packing girl friend is really shooting them.
I forget the name of the film but the situation here is similiar to pulling the trigger in trading. Luckily the other guy is absent here.
The point is to find what works for YOU.....................

Another thing I have learned when it comes to chest thumping is that most threads are people doing the same thing and calling it different names.

Example:

Tweezers -- Candlesticks
Breakout Pullbacks--Al Brooks
Demand and Supply Zones --- a litany of authors

Are all the same formation.

Another example:

AB=CD
1-2-3

Same thing.

I think most of FF is driven by boredom and by people cannot yet see a chart.

Your post is one of the better posts I have seen on the Factory, btw.

Nice of you to share this clemmo, it's some of the soundest advice I've seen on the forums.
Newbies, take note of what's being said in this post and re-read it a few times.

Green pips to you all!

You must have that bookmarked somehow?

I read that years ago and often wanted to use it but need to search for it

What have I learned?

Price Action works, it's just really hard to see it while it happens right in front of you in real-time

1. determine the trend on the weekly chart
2. observe for a pullback on the lower timeframe
3. enter on your own favorite signals
4. hang on

Good Luck

Good to see some of the long timers chiming in. This is what I had hoped the thread would become. Sort of a Knights of the Round Table of FF.

In addition to this, hate indicators all you want but the 200 SMA is your friend. Bless

Do you like that? For more, I have posted quite a bit in the Monday Tuesday thread, and only recently found that method just about replicas what Inner Circle Trader does; nobody seems too interested in it, maybe not understood.

Refer to this post in particular -> https://www.forexfactory.com/thread/...7#post13373367

His driving force to find a method for entry, as he says in one of his videos, was when Larry Williams made a comment about how he wished he knew how people could sell what ends up being the WICK of the Weekly candle

Basically, as I listed in the previous post, what do you think the trend is on the weekly, observe price action on Monday and Tuesday, does it move away from the weekly open?

Perhaps this NZDUSD chart will help, it's real-time, so may or may not "work" I have removed as many indicators as I can

And assume we are looking for short trades in the direction of the previous week's trend reversal, use your own entry method, for instance, I like Inside 1-hour bars with price below 20 SMA below 200 SMA

Can you see it?

Erebus, we all see the markets in a different fashion. But, paradoxically, we all trade in the same fashion. I do not know what you want me to see, because you have a different set of eyes and a different belief system about trading.

If you ask me what I see in that wick, I see several shorts and longs. What I cannot see is the range within that wick. This would make a difference in whether or not I go only long, only short, or both long and short. But again, what I see is different, that is why the markets work.

I had hoped that people like you would post what you have posted. In my belief, we have a duty to deposit bread crumbs to those who are trying to turn this into a business. In that regard, if you want to build out what traders should see, you have my complete blessing. That goes for anyone else who will truly try to help traders.

Well, you won't see the total weekly wicks until Friday closed.

So far, not good, got burned on the first entry short.

Now, it could be that last week was not a trend reversal and we should assume the uptrend is intact

Therefore, let's be looking at the Monday and Tuesday LOWS below the weekly open

In which case, the weekly wick will be very short on the bottom side, probably this US session will pick the direction

1. Have a target and keep the trade until the end.
2. Think in probabilities.
3. Accept losses.
4. Change mind and act fast.

Not all forex signal providers are scammers.

Most traders think that forex signal providers are most probably scammers. Because most of the people are falling problems with this. But Do reputed forex signals providers are also cheated with their customers? I guess, it not quite right. They have a huge solid audience that hears their words. So, having a reliable signals provider is hard to find but useful it is.

I have traded fundamentally, in the long term for most of my career, (I have now moved to the medium term and intraday). This taught me that every approach makes sense in the forex market because the market is alive and variable.
Trading has taught me to perceive the world from a market perspective.

" Trade what you See.

See what you trade."

Turn my red result to green pips after understand.

I've learned to keep calm, don't try and get emotions involved. When I first started trading I panicked every time I took a loss or went into drawdown, that panic caused mistakes and they ultimately lost me money. I think of it like a football game or rugby game now. You may take some hits during the play but its the long term that matters to win.

Learn to wait for the market to come to us before playing ...

https://www.forexfactory.com/thread/...and-resistance

I already knew this, but I learned yet again that there is one born every minute and desperation is a powerful tool. It is extremely unwise to give account numbers out to strangers halfway across the world, or even next door for that matter.

Speaking of tools, if anyone should stumble across this message before that journal, you can simulate any kind of lines you want with your fib tool.