Auslanco - GBP/JPY and GBP/USD (newstrade)
Ah Dmac (this is as much written to myself and others, as well as Dmac), where to start...
OK, firstly the way I see it, forex trading is based on 3 pillars.
1. Good Strategy
2. Money Management
3. Clear focus / clarity of mind.
Now, the best way to decode an equation is to identify the variables and as college professors will say, "cetaris paribus", (other things being equal), you focus on one variable at a time assuming the other variables to be held constant.
All of the above are vitally important, none of them can stand on its own, and so, in no particular order, we will dissect the forex equation.
1. GOOD STRATEGY
Most of us use the same tools, macd, qqe, fibs, trend lines, moving averages, stochastic. A few enterprising among us, may look on Elliot wave theory and advanced gann theories, but those are still supported by the basic tools previously mentioned.
So if we are essentially using the same tools that means that the application of the tools may be a bit off. I.E., timing. Now keeping in mind, other things being equal, if you were trading successfully for over a year, but are somewhat struggling now, that suggests that possibly your strategy may be off. Why, not because your strategy is not good, but simply because the market may have changed, Some days, weeks, even months, the market moves in smooth waves, very easy to fib, and pick 50% as your take profit. Other days, weeks, the market ranges, then BAM, 200-400 pip drop off, then it ranges the entire day again, then BAM, 180 pip rise, and all this rise occurring in less than 2 hours. Now if your strategy is based mainly on fibs you'll have major problems with a market like that. By the time you react the trend is essentially finished in just one hour bar.
Now, I am not saying that this is your strategy, the point is, the market can change and you may very well be using a strategy geared for a particular market condition. Therefore you have to be aware whether the market is changing and adopt your strategy to that market.
2. CLARITY OF FOCUS
There are 2 parts to this:
(a)
Truth is, as much as it may not be ideal for trading, our very emotions affirm our humanity, in other words, I believe as humans we can attempt to reduce and limit the impact of emotions on our trading style, however we will NEVER, eliminate them. Don't believe me?, I would like to meet the trader who has 20 straight losses, tell me that it doesn't matter to them. Anyone who tells you that is either lying, a candidate for the Psych ward, about to off 20 people in KFC, or is not trading for a living. If feeding your family is dependent on trading you simply cannot be so nonchalant about losses, regardless of the % of your account, it could be 0.2% for all I care, it will affect you.
Here in Jamaica, just this week, an FX trader committed suicide by jumping out a hotel room. Emotions are real and we cannot deny them. What we need to do is control them. Greed and fear are the two emotions we need to control and those are best controlled with money management and a good strategy with defined stop loss and take profit levels.
(b)
The sharing of knowledge is part of the reason that we are even on this thread, and it is useful to see other peoples ideas and strategy, but that is where it must end.
I find, that if you have a strategy that you believe in, but someone whom you highly respect as trader suggests that it may go the opposite to what your charts and strategy says, then IMMEDIATELY, you begin to question yourself and strategy. You find any number of reasons not to take the trade, then the trade occurs and had you taken it you would have been correct. But here's the clincher. You could have both been right, Its just that the traders stop loss was sufficient for you to take your profit and come out, while for him, he got a draw down, but then the trade went the way he called it. Point being, you need to trade what you charts and strategy show you.
@trader jumping out of the window. Was he margin called?
Bigup Bredgin.
ya allah
hi all
