Strat's Long Term Stress Free Trading

Thank you for the appreciation

Thank you, Naws

For me, the MOST IMPORTANT feature for this pattern is that each candle MUST HOLD SUPPORT.

Young knave, thou art indeedst wisest beyond thy years - I mightest have to promotest thou to Royal candlestick maker!

Lance, if not already there, will you include a "Candlestick Pattern Recognition" section in the Index and add this. Thanks.

Amin, it looks you are being "'engulfed"' with all this information. There is no engulfing or outside bar in a Harami pattern. The first bar after the set up bar is an IB.

That is a very well placed and correctly drawn TL for MY method - good job, Amin. Also note that this TL has been in place since February 18 DIRECTING TRAFFIC.

"'Price is about to close above BOSS 20 and is testing the major resistance at 141.70 area, if it closes above this level we would place long orders on top of that candle? Stops below the low of that candle?[/quote]""

This opportunity has gone - buy stops should have been in place above the double top, resistance and TL in anticipation of a break of resistance. There was a much better opportunity earlier.

That's exactly what it is Nicola, so get out your ruler and start measuring!

http://www.ft.com/cms/s/0/7851925a-1...0779fd2ac.html

Nicola kindly sent me this link about China's request for a new reserve currency.

This could signal far more than what is written here.

My Chinese business partner is very well connected with Government Leaders (equivalent to Cabinet Ministers) and during my visits always takes me with him when he meets them.

They have been talking about replacing the US$ as a reserve currency for the last 2 years that I know about and have even entered into discussions with their European counterparts on it (don't know about US).

So, this is nothing new, except this time, they have put it in black and white which I find very interesting.

No-one should under estimate the Chinese. It is my belief that long after I've been eaten by worms, China will be the next World Power.

Don't believe me? or maybe you have your head up your aspect? Think again, watch, listen, read; it is happening now right before your very eyes while you choose to ignore it.

I have been visiting China now since 1999. In these last 10 years, China has grown faster than at any time the US ever did. Shanghai bj has lived here for 10 years so he will probably know more.

In 1999, my Chinese business partner was a poor, but well educated (degree in Electrical Engineering), mountain boy just starting out his own one man business, having left a safe, secure job in industry. Today, he is a $multi-millionaire, one of China's Nouveau Riche, owning several businesses, factories, and properties in both China and USA.

He got there with a lot of hard work, dedication and perseverance with a lot of luck thrown in but he was also supported, financed and encouraged by the Chinese Government. How many other Governments can you think of that support a "little nobody?".

Even now, as successful as he is, he has, last week, been given, yes GIVEN (and without any strings or ties), not a loan, almost $1million by the Chinese Government for future investment in his companies.

We are using this to invest in people and equipment in both China AND our US operation which, (unfortunately for me), we are going to scale up.

Does this tell you anything? China is investing heavily while the rest of the world is crying in their beer over the financial credit collapse. My wife tells me she saw on CNN that realtors in parts of the US were organising package tours for the thousands of "ordinary" Chinese coming to the US to buy property.

It is no secret either that Chinese students in all the academic institutions are ALWAYS in the top 2%.

I read 2 weeks ago that China's manufacturing Productivity was up over 2% for the first 2 months this year. Read that again: up over 2% - and this while the rest of the world (yes, even India) is on double negative figures.

China has already over taken the US as the world's largest manufacturer of cars. How long before your US GM, CHRYSLER & FORD (if they are still in business) are manufactured in China and then sold throughout the world? Not that far off.

The Chinese Government already owns $trillions of US debt and in theory could bankrupt and buy the US.

Who do you think it was that started the downfall of the Euro in July last year by buying $millions of TBonds?

The Chinese Government, both directly and indirectly, is investing heavily in US and Europe properties, businesses and stocks at super low discount prices.

I could go on....and on.....and on.......Hopefully, you get the picture and REACT to it. Ignore at your peril.

I have not raised this for points of discussion - only to make you aware.

According to the PMs I have received, common sense in trading may be far more important than I first thought. This being the case, let's look at analysis.

We look at our charts and we do our analysis. When do we know our analysis is complete? It is the same question an artist asks himself when painting a picture.

We sometimes get so wrapped up in analysis that it over rides what we use it for in the first place. I used to enjoy the analysis more than I enjoyed the trading UNTIL I realised that it didn't make me any money.

ANALYSIS IS NOT TRADING

Analysis should only be used for decision making. When you have arrived at a decision, your analysis is done. The second you go back and review your analysis, you will question your analysis and any confidence you had in putting on that trade has just flown out of the window.

If you have come from Indicator Land, you know what I mean. I still see systems and methods with indicators up the ying yang saying and wait for this to confirm, while this shows this, while at the same time this is below this, and this is pointing up, and this must have crossed before this has gone below etc., etc. By the time you have done all that, your head is so messed up, you have forgotten your kid's name!

Analysis is not trading. It only gets you to a certain place.

Trading and trade management is where the money is made.

Analysis does not allow you to forecast or predict or filter or reject. It is just statistical theory. Performing additional or extra or more or further analysis does not get you any further than your initial analysis and does NOT increase your chances of a profitable trade. Based on my earlier over analytical work, I can safely say that LESS is MORE!

Probability of profit in trading has NO RELATIONSHIP to the amount of analysis. Quality of analysis, yes, but NOT quantity. Therefore, no profit will ever increase with additional analysis. Conversely, no probability of loss will ever be decreased by performing additional layers of analysis.

Once in a trade, there are only 2 actions you can make to increase your profitability in trading. They are as old as trading itself and you will have read them many times:

CUT YOUR LOSSES

Your plan should identify your SL but just in case you decide to over ride it (are you reading, Dan?) - cut your losses as soon as possible

LET YOUR PROFITS RUN

Governing, dominating and over ruling these 2 actions are EMOTIONS.

We always ignore the training we need in trading psychology in our quest for profits.

I repeat what I posted earlier - profitable trading is 10% method, 90% psychology. Ignore the psychological side and it will tear you up. If you haven't experienced it yet, it is waiting around the corner for you - it is always there, waiting for you, no-one can hide, it WILL find you out!

I won't say anymore on it as Nicola is going to kindly share her experiences with it.

If you have read and understood my posts, you will have read that I said my flash analysis of USDCAD was more accurate than my detailed analytical over kill. You should also have read that Baba G, our Professional trader and Money Manager, makes his decisions and trades just by LOOKING - not a chance of over analysis from him!

What has this to do with common sense - EVERYTHING

Our common sense, "our gut feeling" is the best decision maker we have.

Look at Baba G, common sense told him to pull out of his CADJPY trade and he is a PROFESSIONAL TRADER & MONEY MANAGER.

If it feels right - it is RIGHT


If it feels wrong - it is WRONG

When we are choosing our lifetime partner and soul mate - do we analyse? do we over analyse? Hell NO, we see it, we like it and JUST DO IT!

Trading is no different

TRADING IS SIMPLE - IT IS TRADERS THAT MAKE IT COMPLICATED

LESS IS MORE

Fallen off my soapbox again (my coloured soapbox this time!)

Nice colors dad......up above the streets and houses rainbow climbing hi!!!!


Common sense right now is saying "wait for your bar".

The other side is saying "WHERES MY BLOODY BAR" not looking at a screen today i cant handle it..

Dont think i dont love you all its just as the days go and no bar turns up i start to hate her,then when it shows up i forgive her and love her again.

I would have been done for even and a baby win on cad had i held and ran my intended plan so noooo big one there....I want a bar!!!!! laters...g

And gpy/yen boss engaged so a bar there toooooo ahahah just want a bar.Im gonna pray to the gods of trading.....g

I didnt realise you are having hustons following your plan.

I know why.

You dont believe in it....or there are holes in it.

sort out those problems and your good to go.

And Strat is right its more like a year.i didnt want to upset you with that reality.Review your progress on a 3 month basis......g

I came back to FF for a number of reasons.The most important was that to be a profitable trader has mostly nothing to do with trading and i wanted to share that.

I wanted to share my wins and losses but above all where my head is at during the afore mentioned periods.

All i want is a good reason to enter and then when i look back know that i did all i could with the info at hand.

Ive had 14 wins 1 loss in the last 5 months and i feel like i got lead boots for water walking.....

Im not over the moon in anyway whats gone is gone.All i think about is the next bar.

Could,would,should,if only,had i only.......suollocks!!!!

Your only as good as your last trade....remember that....

Im not a good trader but im good at sticking to a plan(DAN)

Im crap at analysis but i read price.

In my system i have a cut losses early protocol,and a let profits run.Tried,tested and proven over a few years of development.I could never leave that path.

You want the truth this was another piss poor month on the whole.Im at an average of 2% up month on month over the last 5 on 14 wins 1 loss giving me an average win of 0.71% per trade.Dont sound so good then does it.
And that cable last week we ran "live" here added about 0.05% to that 5 month average.

You see it really is a marathon..........we continue

Brilliant Strat. Thank you for taking the time to pen your response. I'll respond to each of the points you made tonight when i next open my chart feed and see how my Cable is doing (i will not look at work, i will not look at work!).

I am coming to realise that trading is easy, trading psychology is hard.

Thanks again Strat (and Baba)

Trading is easy, trading psychology is hard

Damn it Dan, why didn't I say that!

Joking aside, Dan has hit the nail on the head with a huge sledge hammer!

As I have said a few times, we learn as much as we can about Price Action yet ignore the 90% that CONTROLS our success.

Lance, if you're still there, please put this somewhere prominent on the Index, thank you.

Just got back from dinner to find a couple of interesting PMs

The first is from what I call a Smart Ass Lurker. How do I know he is a Smart Ass Lurker? Because he's never posted on here before and is looking for freebies.

I was tempted to copy his handle on here but that would disclose him, but no, I will not be dragged down to his level.

Instead, I'll just post the body of his PM:

"Funny thread you got going here Why do you post stuff with questions and not give answers whats the point maybe you dont know and hopeing somebody will give you the answers"

I don't normally reply to Lurkers, let alone Smart Ass Lurkers, but this one I could not resist.

Hence my reply:

GO FORTH AND MULTIPLY

The second PM was so way out in left field, I couldn't really get my head into the way he/she was thinking. I initially deleted it and then after, thought about it and thought that I should address it as maybe somebody could explain it for me.

It went something like "why do you post links in your thread to other threads. Isn't there a chance that people might like the other threads and not come back?"

As I write this, I still can't understand it or see the relevance.

I started this thread at the request of others who wanted me to show them how I trade long term time frames. If they don't like what I teach, how I teach or the way I teach, they can piss off and go somewhere else - I don't care, I REALLY don't give a rats ass! I never did this to compete with J16, Jacko or anyone. I did it to help those who wanted my help - read the words under Buddy Holly - "Trader helping Traders".

Now, if it gets to the point that nobody wants my help, then fine, I'll just shut down and find something else to do during the day so that the trouble and strife thinks I'm busy.

I must be simple or thick or something because, as I write this, I STILL do not understand the point he/she is making?????????????

People are strange (when you're a stranger).

Never really bought the whole poetic genius thing, but perhaps JM had a point!

Morning Strat & The Team

Just caught up on the posts..a few thanks to say, too many to mention but key ones for me..for the explanation on the harami formation, spirals, reaffirming Patience waiting for the correct signal bar and not to do over analysis - great post and in colour as well..I've been guilty of too much analysis and I need to plan the trade and trust my common sense and trade the plan. After all, I will know before hand how much my potential loss will be, and I will have accepted that when I place the trade.

Sorry, I have been entertaining business associates, but I'm here and I will have the updated index posted this afternoon after I get the new gems added. In color no less.

Dan, if I may ask what exit strategy are you using to determine your Take Profit levels. We haven't started discussing ideas on that yet but they are very important.

I found I was doing the exact thing you are doing when it comes to altering my plan after the fact. I just couldn't stand to see my precious paper profits erode and every small retrace convinced me "the tides have turned", the trend has reversed, and I will loss everything I was so patient to wait for to gain.

I think it is another common problem when switching to a longer time frame and developing the patience to wait for the A trades. When we put our mouse finger in our aspect, as Strat would say, and wait days for a nice setup we really want to show a good result for our efforts.

I have gone to a style where I scale in my position and also scale out as I show a profit. I do not establish my entire position from the get go but I add to it once the market shows me my analysis was correct. I also establish multiple target levels and pull money out as they are reached, the first being relatively small. The psychological side of showing a winning trade is very powerful and having a winning trade turn into a loser, even a small loser, was very damaging to me. I like to be right and profit means I was right. When I looked back at my balance sheet at the end of each month, I would just see the negative number, I wouldn't remember I was right and gave back my profits, I would just see that damn number.

I know there are hundreds of methods to manage positions, this is just one that over time I have come comfortable with and seems to work for me.

Lance

Wow, FXPippy, brilliant summary - now, please, please, tell me you can walk the walk as good as talk the talk - I STILL have problems with all of this!

I was going to change the title to "making pips is easy, making money is hard" because that has been my experience thus far.
I know a lot of very knowledgeable people tell you to demo demo demo until you are profitable but I wanted to explain what happened to me and what I think happens to a lot of people. Demo is easy psychologically and real money trading can be very hard!

Most people know I started life as an air traffic controller. I'm pretty good at following rules and I can stare at a wiggly line on a screen all day without losing it and I am pretty good at dividing my attention between a number of trades if needed. Controllers learn in a simulator and you learn quickly mental rules, such as if this gets to this point I need to do this or re-evaluate etc. The switch to live controlling is pretty seamless. Most pilots learn in a simulator too, so that when you need to do that water landing for real you have done it so many times and it is so realistic you can pull it off.

Trading for a lot of people is NOT like that and something happens when you switch to trading real money. I was one of those people who struggled with the switch and I still am ...
I wondered if it was just me but it is something that a professional trader I really respect (who posts on J16 as Wizard) pointed out it happens a lot.

When I started I was the queen of demo, I could make loads of pips and it was not undue risk either, I cared very much about my demo account balance. After a couple of months I funded an account and I thought I would be off on the road to riches. It was a disaster ... I started out in a place of being over-confident and complacent, which is a KILLER, in trading.
Then I lost a few real money trades big and psychologically I crashed ... I could not pull the trigger, I second guessed myself, I put in crappy too-tight stops, I cut winners early and I generally traded like an idiot.
It has been a long road back to confidence for me that I am still working on but I did not go back to demo. Instead I traded real money with very small stakes and I forced myself to deal with it because I knew I would never really make it until I conquered the mind over matter with money.

Another trader I really respect who trades for a hedge fund told me that most traders do not make money the first six months of trading, and it is exceptional if someone does. He told me that if you get to the end of your first year and you break even you will probably make it. Well, that is not the road to riches so many who start think it is, is it? But I am sure it is the truth.

I would say that if you are starting and you can afford to fund a SMALL account and trade VERY SMALL size REAL MONEY then you might do better in the long run because you will have a better chance with the psychology.
The goal is to master trading without blowing all the money you have to trade with when you get there.

I did not post this to discourage newbies, more to say if you are not profitable yet, don't worry, it's normal!
But it is all about the money ... and how you deal with it.

Nicola

This is another look at the G/J and I trendline I think is important along with Amin's.

This goes back to the two trend line post Strat did last week.

Lance

We’re having problems Huston Baba G can’t find the bar J